Small businesses face many challenges, from the lack of capital to the struggles of finding and retaining their employees. Navigating a whole business on your own is not easy.
However, it’s important to remember that you are not alone. It is a struggle everyone faces, especially in the beginning. Even that web development company in Chicago you might be looking up to had its share of troubles when starting, but they saw it through.
To support our claim, we give you 5 steps you should follow to maintain your small business.
Develop a business plan.
The first step to keep your business going is to determine what your goal is. After that, you should set a timeline and calculate what resources you need to reach it, and finally, come up with a business plan.
What is a business plan and why is it important to have one?
A business plan is a document that specifies the business goals and the ways to achieve them. Now, there is no right or wrong way to write it as long as it serves the purpose. Most business plans contain the following sections:
- Executive summary – which explains what the company does and highlights key information from the rest of the plan;
- Products and services – which includes the information about the products and services the company offers such as the description, pricing, product lifespan, or information about any proprietary technology;
- Market analysis – which contains the industry overview, an assessment and a description of your target market, information about the competition, as well as the pricing and forecast;
- Marketing strategy – this section describes how the company will attract and keep its customers through different marketing channels;
- Financial planning – this area contains estimates for the following years, as well as the financial How to maintain your small business in 5 easy steps
- statements and other similar documents;
- Budget – related to manufacturing, development, staffing and other business expenses.
Creating a business plan is important because:
- it helps you define ideas and strategies beyond the financial matter, such as management, human resources and customer relations which all affect your business;
- it gets you to spot any potential weaknesses much quicker and fix them before it gets out of hand;
- it can assist you in closing a deal – investors will much rather give you money if they see you’ve taken the time to calculate the potential risks and the likelihood of success.
If you’re feeling unsure of your business plan, you can always ask the experts for their advice or discuss it with other small business owners. They can point out something that you may have missed and help you improve it.
Hire others to work for you.
Since one of the key struggles small businesses face is the lack of financial means, most try to save their expenses by hiring workers that cost less. However, it’s important to think ahead. You are not exactly saving up if they are less efficient, are you?
Sometimes you have to pay more to get more. But, if you’re thinking of ways to save up, sometimes it’s better to hire a contractor as opposed to an employee.
Employees vs. Contractors.
Before you decide to hire a contractor, let’s go over the most important differences between contractors and employees.
Full-time employees are typically invested in the company and its culture and offer continuity of service, while contractors come and go and are often seen as outsiders by the employees. But contractors typically cost less and are great for job positions needed on a flexible basis, while employees must get paid even during a crisis and usually must receive benefits.
Of course, there is no universal answer to the question of when should you choose contractors over employees. It mostly depends on what your business is about, though there are positions that are typically reserved for contractors, such as a bookkeeper.
Learn to delegate.
As an entrepreneur, you probably want to do it all on your own. In the beginning that may be possible but as your business grows it will get harder to meet the deadlines and deliver the same quality. After all, professionals spend years in college and practice learning how to do their job and you don’t have the time for that.
Surrounding yourself with the people you can trust will make it easier to delegate. If your employees show initiative and genuinely care about their work, you won’t doubt their intentions and motivation.
That being said, it’s important to recognize when you have a candidate that shares your values and is willing to help out, even though they may not have the relevant work experience or the necessary set of skills. Though training them might take some time, it can prove to be more useful long-term, since it’ll be easier to establish trust with someone that shares your point of view.
In conclusion, don’t be afraid to delegate. You will save up energy for when you really need it.
Know how to manage sales cycles and be prepared for a crisis.
Depending on the product and the service, some might be seasonal while others might be timeless. So, sometimes you will have a drop or a rise in demand. For example, if you make gelato, it’s only natural more people will buy it in the summer.
Also, if some of the raw materials you use to manufacture your product come from afar, you should be prepared to meet the demand if you don’t want to have a drop in sales.
To successfully manage sales cycles you have to analyze your data and note the fluctuations in the demand. That is the only way to ensure you have more exactly when you need it. A good way to do this is to buy more raw material in advance and store it, but it’s also important to have a backup plan with alternate suppliers.
When in a crisis, try to look at the bigger picture and ensure access to cash.
As opposed to the regular sales cycles, a crisis is not the usual part of the business cycle. Though we all try to minimize the chances of the crisis emergence, you can still find yourself in the middle of one.
The first best advice we can give you is to try to look at the bigger picture.
Sometimes it may seem as solving the problem might be simple and you’ll want to attack the most obvious source immediately. However, there might be an underlying issue there that you fail to see. That’s why you should take a step back and look at other factors contributing to the problem.
For example, suppose you have three employees that seem to be making basic errors quite often, even though they’ve been working that job for quite a while. Your first thought might be to fire them. But, before you do that, ask yourself if there could be any other reason for such behaviour. The manager might be the one to blame for that or the overly long hours they have been working lately.
Either way, before you make any radical decisions, stop and think. There might be a better way to solve that, such as reducing their hours or asking them in which way you can make their job easier on them.
Don’t forget – a crisis is a great chance to determine your strengths and weaknesses and work on resolving them.
We also recommend that you pay special attention to ensuring you have access to money. Now, there are ways to obtain cash during a crisis, such as a loan, but it’s important to think ahead.
For example, you can open a line of credit in advance. A line of credit gives you access to a certain amount of money that you can take out when you need it, but you don’t pay interest until you actually borrow. Or, you can borrow money from your family.
At last, saving up money is always a good idea – since it provides more financial independence than any other option.
Develop and nurture a good customer relationship.
A customer relationship revolves around how your customers feel about your company and the company’s product and services. Even the biggest companies such as Amazon and Disney pay attention to maintaining a good customer relationship and it is no coincidence.
Customer’s opinion now matters more than ever and the social media platforms are to blame. One bad review from an influential person can ruin your business. However, don’t forget that it can also help you gain new customers.
The benefits of fostering good customer relationships are numerous:
- Customer Loyalty – if you consistently deliver products and services of the same quality, your customers will become loyal to you. This is important both to you and your customer since you’ll be able to count on each other – they’ll know where to turn to for quality and will purchase your product repeatedly which is something you definitely want.
- Customer Acquisition – customers that are satisfied with products and services tend to share the experience with their friends and family and may even promote your business on social media. All that helps you gain new customers organically, without investing any additional money into marketing.
- Lifetime Customer Value – a happy customer will spend more than an unhappy one, which is confirmed by the Harvard Business Review. To be exact, customers with the best experiences spend 140% more than the ones with the poorest experience.
- Decreased Costs – the operational costs of having dissatisfied customers increase because your employees and you will spend more time responding to the customer complaints and resolving other similar issues. So, pay more attention to satisfying your customer and you’ll actually save up on your operational costs.
Now, you can do many things to build and nurture customer relationships. We advise you to:
- Listen to What Your Customers Say – any feedback is good feedback. Show your customers that you care about them and that you value their opinion. They will help you learn from your mistakes and become better.
- Authorize Your Employees – your employees should be empowered to make a decision reflecting on the customer’s satisfaction on the spot. If your customers must wait to have their problems resolved, it may cause dissatisfaction on their part. Trust your employees and rely on them to give their best.
- Add a Human Element – for instance, you could provide customer support in person or give a token of appreciation by attaching a personal message to the product your customer ordered. In return, your customers will perceive you as more friendly and approachable.
- Boost Your Social Media Presence – social media allows users to interact with you. So try to be prompt when answering the messages you receive and use polls and text boxes on Instagram to see how customers feel about your ideas. This will bring you and your customers closer together.
Don’t Sacrifice Quality
As time goes, some small business owners tend to change product components to increase their profit margin. It’s only natural for business owners to seek ways to achieve the same results by investing less. However, don’t do it at the expense of lowering the product quality because it tends to backfire.
For instance, if a restaurant owner decides to buy cheaper cheese for pasta, it may not taste the same and the customers will notice it. You could end up losing your customers over something that could have been avoided.
Instead, opt for changes that don’t compromise the quality of the product. In our example, a restaurant owner should think of a different way to lower his costs, such as finding more affordable take-out boxes.
Maintain a positive attitude.
Owning a small business is wonderful and rewarding, but you’ll sometimes forget that. Focus on all the good stuff about your business instead of micromanaging and worrying all the time.
Celebrate small victories with a nice glass of wine and remember what you started this in the first place.
Don’t take it from, take it from Winston Churchill – “Success is not final; failure is not fatal: it is the courage to continue that counts.”
Sophie Douglas is a digital marketing specialist and a journalist based in Columbus, state of Ohio.
Her characters are passionate, innovative, and ambitious. Before becoming a writer for DigitalStrategyOne, she was writing short stories, screenplays, and directing short films.