How can you boost the likelihood of small business success? Several attributes, including an entrepreneurial mindset, a focus on cash flow, and an emphasis on your customers, are key to positioning your business for sustained growth and success.
While an entrepreneurial approach is critical when starting out, it’s also important to sustaining a business. It also can help business owners adapt and identify changing opportunities during times of uncertainty.
The top reason businesses fail? Running out of cash, reports SCORE, a resource partner of the SBA.
“Cash flow is the essence of your business,” said Gary Minkoff, Assistant Professor of Professional Practice at Rutgers University.
Along with tracking revenue and expenses, business owners need to monitor the timing of cash receipts and payments, to ensure they have enough money to cover payroll and other upcoming bills. Also important is knowing what it costs the business to offer its products and services, and effectively managing those costs, as in leveraging inventory and identifying which products are selling and why.
Business owners often try to do everything themselves. Instead, you are better served by hiring strong employees and delegating appropriately. At the same time, businesses need to be efficient: keeping the employee roster lean, as layoffs and rehiring following busts and booms are often costlier than maintaining a stable workforce. By outsourcing some tasks to a third party, businesses can more easily trim costs when the economy is tight, while staying atop trends during expansionary times.
One key to sustained, profitable growth is sales efficiency and marketing effectiveness, yet many companies focus on revenue and fail to consider the need to grow profitably, which requires looking at sales efficiency. For instance, is the company setting and meeting sales quotas? What is the level of customer retention? How are salespeople approaching cross-sell and upsell opportunities? Few companies assess these metrics, even though this information is a critical starting point to improvement. It shows where to focus and can guide a more systematic approach to building the business.
For a business to succeed, it has to identify a group of customers that has an unmet need for the products or services it’s offering. This group also has to be large enough to sustain the company. Having identified its customer base, the business needs to satisfy them– which should start with the initial contact, and then continue during the purchase process, and through the duration of product ownership and use.
By remaining close to their customers, many small businesses can differentiate themselves, Minkoff said. This may mean, for instance, offering niche or specialty products that larger companies find difficult to replicate, or faster response times than bigger firms can provide. As a small business, use that inherent flexibility and freedom to think outside the box to your advantage.
The Emporia Area Chamber of Commerce offers many resources to help you run your business–including our annual Leadership Emporia Academy. Stop by the Trusler Business Center at 719 Commercial St., call 620-342-1600, or visit our website at www.emporiakschamber.org to learn more.
“Let’s Talk Business” is a weekly column of the Emporia Area Chamber of Commerce and Visit Emporia. The mission of the Chamber is to be proactive in creating an environment for business and community success, guided by the vision that positive attitudes promote positive actions. Contact us at 620-342-1600 or chamber@emporiakschamber.org and visit our website at www.emporiakschamber.org.