Many people dream of owning their own businesses. Still, only a few will take the initiative to begin a business. Of those few who take the initiative, even fewer will remain in business over the long term. Running a business successfully requires a good business idea, but it also requires effective processes and practices to keep your business successful.
In this article, we’ll look at some traits that make businesses successful, what causes many companies to fail, and what steps you can take as a business owner to ensure your business succeeds.
What makes businesses successful?
There are several aspects involved in running a business successfully. Whether you’re just considering starting a business or have already taken the leap, here are some practices that will make your business successful.
Choosing the right people for the job
Numerous businesses begin with just one person at the helm, but thriving entrepreneurs understand that they cannot manage every aspect alone. This realization may lead to selecting a partner who shares the business’s investment and participates in high-level decision-making. Another option could be employing staff members to take care of daily operations. The key to a successful business lies in identifying the right individuals to fill various roles within the organization
Marketing their business
Even the best business can’t sell its products or services if no one knows about them, and that makes marketing an incredibly important aspect of successful businesses. Marketing needs will vary based on the type of business, but successful businesses leverage email marketing, social media, ads, and other types of content to get the word out about their business. Marketing typically takes up a lot of capital, but it’s worth the investment.
Managing their customers
Good businesses recognize that they don’t have a business if they don’t have customers. They focus on keeping a good relationship with present and past customers to ensure their customers keep coming back, referring their friends, and leaving positive reviews online or through word of mouth.
Staying flexible
Every business starts with a good idea, but successful companies don’t get bogged down and hyper-focused in one area. Instead, they stay flexible and look for alternative ways to expand and grow their business.
Staying flexible doesn’t just involve products and services. It could include marketing methods, how employees work, what tools employees use to do their jobs, and more. Having flexibility allows successful businesses to pivot if something isn’t working instead of getting bogged down trying to force success.
Watching the budget
Many small businesses need help with cash flow, especially in their early years when overhead costs may be high, and sales may be low. Cash flow issues can quickly run even the best business into the ground. Successful businesses monitor their income and sales, don’t take on more debt than they can handle, and are conservative with their spending when they can.
Keeping a growth mindset
Every business will face setbacks, but how you handle those setbacks can either lead you to bigger and better things or send your business into a tailspin. Businesses with a growth mindset keep an open mind for improvements, listen to feedback, and look for ways to keep learning and growing.
Why businesses fail
Many businesses fail in their first few years. In fact, according to the Bureau of Labor Statistics, 18% of businesses fail in their first year. Only about half of businesses make it to the five-year mark, and about one-third make it to their tenth year. While those statistics might seem discouraging, you can learn from these common mistakes.
No business plan
Before you even begin a business, you must learn how to write a business plan. Your business plan is a guideline for how your business should operate, who your target customers are, how you’ll reach them, and what steps you need to take to ensure you meet your goals. As you write it, you’ll also think about your budget and where your money will come from. Some business owners fail simply because they failed to plan by spending the time to write and think through what a successful plan for their business would be.
Not enough market for the product or service
You need to sell your products or services, but you might not be able to find customers if you’re in a highly competitive market.
Before you start your business, make sure you can reach your customers and that there aren’t already too many businesses in that niche in your location. If your business operates online, you need a solid marketing plan before you even launch.
Not hiring enough talent or retaining talent
Your employees are almost as important as your customers. Not appreciating your employees, not promoting from within, or simply not hiring enough employees in the first place can all lead to employee burnout and turnover. Without good employees, you won’t be able to serve your customers well – a vicious cycle for any business.
Not enough capital
Cash flow can be a problem for any startup. It’s not just important to have a budget; it’s important to keep a close eye on your finances, pivot when necessary, cut frivolous spending, avoid unnecessary debt, and work towards the point where your business can become a profitable venture.
Lack of infrastructure to support growth
Growth isn’t always a good thing, especially if your business is ill-equipped to deal with an uptick in sales. Keep a close eye on how you’re handling your current volume. Adding project management software to keep your business organized, hiring new employees, or using other business software can help make sure your company stays organized and poised for growth.
Lack of customer focus
You will fail if your business doesn’t keep your customers at the front of all you do. As we mentioned above, listen to your customers if they say something isn’t working for them. Ignoring your customers’ needs is a sure way to drive them away and have a failed business.
Guide to running a business successfully
Now that you know what not to do, let’s look at what you can do to ensure you run a successful business for years.
Make a business plan
In case you didn’t catch it earlier – your business plan is critical. Ideally, you would create this plan before you launch. But if your business is already up and running, don’t worry. It’s not too late to develop a plan for your business going forward.
Don’t be afraid to make changes when things are going differently than planned. In fact, successful business owners often revisit their business plans, ensuring they are up to date. Sometimes you discover you need to change the business plan to ensure it continues to align with the goals and objectives of the business. Just be sure you’re being realistic and as accurate as possible with the changes you make.
Set goals
Just as it’s essential to have goals for individual growth, your business needs goals, too. Your goals should be specific, actionable, and measurable. For example, instead of “Gain more customers this year,” your goal could be “Increase sales by 10% from Q1 to Q2.” You’ll easily be able to measure if you hit that goal, and then you can adjust your goal for Q3.
It’s great to have a 10-year plan for your business, but what steps will you take this year to reach those goals? Get input from your team before setting the goals. Don’t forget about making both short-term goals and long-term goals.
Manage your cash flow
We already discussed how many businesses fail simply because of cash flow problems. Don’t let your business be one of them. It’s easy to overspend if you feel like your company has a windfall, whether that’s cash from initial investors or money received from a small business loan.
It’s better to be conservative with your spending at first. You can always move to bigger office space, buy nicer equipment, and upgrade other purchases as your cash flow improves. But if you spend too much money and can’t pay it back when it’s due, your business can collapse under the weight of your debt.
Your accountant can help you ensure you have enough cash in the bank to cover your future needs. You can also use accounting software to keep track of your income on a day-to-day basis on your own, so you can make your budget and stick to it when it matters most.
Manage your customer experience
You want your customers to come back and refer other customers to you, so managing your customer experience is one of the most important things you can do to run a successful business.
Make sure you’re exceeding expectations with each customer interaction. Listen to your customers, and don’t get defensive if they make a complaint. Instead, listen to what they have to say with an open mind. Maybe you need to change a process to serve your customers better or change something else about your business. Embrace the change to create a more positive experience for your customers.
Using CRM software can make this process even easier. Your CRM software can help you track each interaction with your customer and help your employees customize each interaction with them.
Manage your employees
Your employees represent your company, and having the right individuals in their respective roles is crucial. It’s essential to hire skilled professionals for your team and ensure you complete the proper paperwork. Additionally, setting goals for your employees encourages their growth while nurturing your relationship with them and fosters loyalty and long-term commitment
Human Resources and Recruiting software can help you find new employees, test their skills, and even help interview and categorize candidates. It can manage tasks like payroll, time off requests, and goal setting, taking paperwork off your desk while keeping your employees engaged and doing what they do best. Then, once you find the perfect person for the job, the software can get them onboarded quickly so they can begin work as soon as possible.
Never stop marketing
Even if you can comfortably handle the business you have now, always continue marketing. Whether you keep your marketing in-house or outsource, marketing isn’t just for prospective customers. It also keeps current and past customers engaged with your brand, ensures your pipeline stays full, and your business continues growing and making sales.
Marketing doesn’t always mean creating ads. It can also mean creating content like podcasts or case studies, sponsoring youth sports teams, attending trade shows, and regularly updating the business blog on your website. There are different marketing types, so don’t be afraid to branch out.
CRM software, email software, and email marketing software can also help you reach your target audience with a message created just for them.
Don’t be afraid of change
Staying flexible is a trait of successful businesses, but how can you implement this in your own business? One way is by watching your competition. You may need to update your pricing strategy to stay competitive or to start using different techniques to reach customers.
Doing things the way they’ve always been done, simply for the sake of doing them, is a sure recipe for failure. Keep your eye out for ways to improve all the parts of your business, and don’t be afraid to try new things.
Final thoughts
Having a successful business takes skill, planning, and resources. But even if you have all of these, your business can still fail if managed properly. Creating a business plan, setting goals, and pivoting when needed can help you manage your business well and keep you up for long-term success.
If you haven’t created a marketing plan for your business, check out our article on How to create a marketing plan to learn all you need to know to run a business successfully.