Are you ready for long-term business success?
Your business ideas are hot -- and fire in your belly is going to keep them that way. That’s the attitude that launches promising start-ups and sustains industry icons. It can’t be learned, faked, or manufactured. So hold onto it. It’s gold.
But if long-term business success is your goal, you’ll need just a bit more. According to the Bureau of Labor Statistics, about 20 percent of small businesses do not survive the first two years, and only about 30 percent make it to the 10-year mark. Hiscox is committed to making your business dream more than this - or any other - statistic. Here are 10 tips that will help you do the same.
1. Make sure your great idea is greatly needed
Don’t let enthusiasm for your new business blind you to the wisdom of market research. If no one wants your product, no amount of marketing will change your business outlook. A 2019 study conducted by CB Insights found that 42% of first-year failures were attributable to “no market need.”
Entrepreneurs who ask themselves some hard questions upfront can quickly realign their business goals for the long haul. So ask yourself:
- How robust is the demand for your product or service? Can you issue a survey, poll, or other tool that will allow you to assess demand?
- Have you researched the historical demand? Can you anticipate its fluctuation?
- Does it fill a niche today that may be on the decline tomorrow? How can you adapt?
- How does it stack up against the competition? Do you have a product attribute that outperforms the competition?
2. Develop a business plan
Before you launch, make sure you write up a business plan. Not sure what it entails? It’s simply a document that outlines the operational and financial systems that will enable your business to run without your constant cheerleading and vigilance. The Small Business Administration has developed a business plan template that can help you develop your own. Minimally, make sure your plan includes:
- A financial plan that prioritizes fiscal stability and maps a clear path to profitability.
- A realistic business model. This will evolve over time - from sole proprietorship to LLC and beyond. What decision-making structures, personnel policies, staffing patterns, marketing practices, and product investments are needed to move your business?
- Regular updates. Have a process in place to evaluate your plan. Are things working the way your plan predicted? If not, avoid making changes that address short-term goals or anomalous blips. Keep your business plan focused on your big picture.
Related: 8 Tips for creating a business plan
3. Anticipate change – and work with it
One of the most lasting business lessons of the pandemic economy has been the importance of adaptability. Restaurants that embraced online ordering apps, food delivery services, and curbside pick-up fared far better than their brick-and-mortar-only counterparts. Ask yourself:
- Is your product or service adaptable to changes in the market, product innovations, and new technology?
- How can your start-up scale up to meet new demands?
- Does your business’s financial plan include a sufficient cushion to adapt to changing conditions?
4. Don’t overlook the paperwork
Starting a new business is as much a bureaucratic challenge as it is a creative one. Don’t get bogged down in the paperwork. Instead, consider contracting experienced professionals to handle some of the more painstaking business processes:
- Business licensing: Let professionals research all required licenses and registrations new license filing procedures and ongoing license renewals. The experts at LicenseLogix can help you get started.
- Incorporation: Do you want to go from a sole proprietorship to an LLC? Think your business should file taxes as an S Corp or a C Corp? Ask the experts at Incorporate.com to help you rise above the jargon to realize success.
- Bookkeeping. If you’re not ready to staff a business office, there are many freelancers whose expertise you could use on an as-needed basis through contracting agencies like Upwork.com. You can also find some very robust software programs like the ones from QuickBooks.
5. Establish solid financial foundation
Before your business can turn a profit, it needs a financial foundation that includes the right mixture of investment, equity, cash-flow, and working capital. Ask yourself:
- How much equity do I need? How much debt can I afford?
- How can I find the right business loan? The SBA offers a number of business-friendly options, and Fundera can also help match you with a loan that suits your needs
- What roles do costs, revenue, and profit play in my company’s financial health? Find out more from smallbusinesschron.com.
6. Make sure it’s all Insured
As you evolve from sole proprietor to CEO, your role will always include the protection of the investment you’ve made. For most entrepreneurs, insurance is that protection.
Some kinds of insurance – like workers comp – are mandatory. Others, like professional liability, general liability, and cyber security are just good business moves. The most important step you can take is to find an insurer who understands what small businesses are up against and what they’re after.
7. Hire great employees
This starts with you, of course. Your ideas. Your vision. Your work ethic. But in the long run, it won’t end with just you. Healthy business growth will inevitably lead to additional workers. Ask yourself:
- Will your long-term goals be more efficiently attained by increasing your permanent payroll?
Related: How to hire the best employees
- Would it make more sense to bring in contract workers for a limited time and project or permanent employees who can file for unemployment if laid off?
- Is your company’s business office ready to handle the tax, insurance, and financial responsibilities that come with permanent employees?
8. Develop a savvy marketing strategy
If you are just starting out, you may not have the resources to hire a full-time marketing team, but don’t overlook the importance of this function. Minimally, be prepared to:
- Use digital analytics to track your customers website behavior and product preferences.
- Employ search engine optimization (SEO) strategies to optimize your company’s ranking in routine searches.
- Consider using a chatbot on your website to more effectively gather feedback from, and direct the activities of, your target customers.
- Create a feedback loop of some kind whereby you can monitor your customer satisfaction.
9. Establish a strong social media presence
Social media presence is no longer an optional business tool. Business owners who post relevant and engaging content on the right social media channels can expect to cultivate a larger and more loyal customer base. Minimally, you should:
- Know which social media channels are most relevant for your audience and your business. Focus on them rather than trying to hit every platform available.
- Designate an employee, intern or collaborative team that will consistently produce quality content, follow up on feedback, and track metrics.
- Develop a plan that allows you to target different consumer behavior. Do you want your followers to view a promotional video, listen to a podcast, or re-tweet your news release?
- Avail yourself of the many business-friendly social media resource guides, including Bit Rebels’ Social Media Tips For Small Businesses and Salesforce’s Social Customer Experience Playbook.
10. Rely on your competencies and build your leadership
The enthusiasm and grit that launched your business are non-negotiable. Equally important are the competencies and skills that allowed you to produce something worth selling. Along the way you’ve learned to delegate lesser responsibilities to trusted members of your team.
There’s one more thing: don’t let the day-to-day pressure of running your business distract you from the art of leading it. Continue to execute on your strengths, but remember that long-term business success will demand a more sophisticated management style. Burnish your leadership skills and you will elevate your output immeasurably.
You won’t have a hard time finding resources on leadership, but you might start with Forbes’ Learning Leadership: Eight Key Skills That Make An Effective Manager