It’s never too early or late to learn how to run a successful business.
Whether your business is in its inception or you’ve been around for a while, there are several things you can do to progress toward your goals. These run the gamut from operational to practical, and anyone can implement them.
So, what traits do successful small businesses have in common? There’s no one ingredient, but by and large, their owners understand and implement the following 11 best practices.
1. Understand Finance
That’s right, owners of profitable businesses take the time to learn about finance. They understand that how to have a successful business depends on their ability to understand basic financial principles.
That doesn’t mean you have to become an accountant, but it doesn’t have to be difficult, either. It’s all about learning how finance affects your business, how to keep your debt in check and what to do when you start turning a profit.
2. Practice Frugality
Fledgling companies tend to struggle with poor cash flow. That’s why, from the beginning, it’s essential to run your company leanly from a financial standpoint, and reduce costs wherever possible.
One way to run a lean business is to overestimate expenses and underestimate revenue. Thinking in this manner is not to say that you hope for less income, but it allows you to plan for all possible scenarios.
Another way to keep your business finances lean is to skip the fancy stuff, at least at first. It’s crucial to minimize overhead costs as much as possible. You don’t want to spend all your money on things that aren’t necessary, such as extravagant offices, the latest technology and high-end office furniture.
As your cash flow increases, you can start to spend a bit more on these things, but it’s important to remember that money saved is money you keep in your pocket for other more pressing business expenses.
3. Create a Business Plan
Another thing that makes a small business successful is a thorough business plan. Without one, your business is a plane with no pilot. You’re never going to get anywhere if you don’t know where you’re going.
Aside from being the company blueprint, many banks require small businesses to provide a business plan when applying for loans, so this is a need-to-have document.
A business plan doesn’t have to be long or complicated — a page or 2 can be plenty — but there are some important company considerations your business plan should outline:
- Product or service offerings
- Sales and marketing plans
- A financial plan, including a cash flow analysis
- Employee needs
4. Understand Sales Drive Business
You’ve started a company with the intent of attracting a customer, and customers are your reason for existing. The business owners that know how to succeed in small business know the importance of prioritizing sales from the very beginning.
Even if your brand is not entirely developed, start selling. Without sales, it doesn’t matter if your website, brochures and product are all perfect. What does matter is whether you have leads.
Speaking of leads, how do you get them? How do you convert them into sales and make sure they return? You need a marketing and sales funnel system that anyone that works for you can use. It doesn’t have to be extravagant, but it needs to exist.
5. Develop a Sound Marketing Strategy
Successful small businesses stick around because they know how to build a productive marketing strategy. They also know that you can effectively advertise your business on any budget.
Since marketing is essential, set up a marketing strategy that will be part of your business plan as soon as possible. How you will attract and retain customers is a question you can start to ask even before going into business.
To market effectively, you’ll need to define your target market and its purchasing habits. You also will need to understand where your product or service fits into the market.
Successful small businesses embrace digital marketing, so take their lead and make sure to create a website and email list, and start working on your social media presence.
6. Provide Excellent Customer Service
Getting customers to stay can be just as hard as getting the sale, so care for the sale you worked so hard for. Negative reviews, especially on the internet, can be extremely damaging to companies.
Owners who survive know that excellent customer service is a huge part of how to run a successful business. Your first job is to create something customers want, but you should give them something beyond the product. Your customers want to feel valued too.
Even if you aren’t the lowest-cost option, excellent customer service will make customers come back, so train your staff to provide top-notch service.
7. Hire the Right People
How would it be possible to run a successful small business without the right people? If your business plan is the pilot, your employees are the flight crew. Much like the plane couldn’t fly without the flight crew, your business can’t flourish without the right employees.
Small business success depends on assembling a team that will help you achieve your operational goals. First, make sure that you’re hiring to cover all of your operational needs.
Aside from making sure to cover every position, it’s critical that your new hires are a good fit for the company culture and that they can form part of a cohesive team. People with complementary strengths who balance one another is one part of what makes a business successful.
8. Never Underestimate the Power of Management
As the old saying goes, people leave managers, not companies.
Remember, your team is one of your most valuable assets. Once you’ve invested time and energy in hiring them, treat them well. Keep in mind, high turnover isn’t good for workforce morale, and it stunts company growth.
Good managers are first and foremost an example of the company culture. They communicate clearly, provide constructive criticism when needed and make their employees feel valued. They’re one of the keys to what makes a small business successful.
Don’t be afraid to seek outside help to learn how to be a better manager, including following management best practices. Improving your managerial skills will pay dividends down the road.
9. Learn From the Competition
That’s right. Successful small business owners know that iron sharpens iron. They aren’t intimidated by the competition because they know that having competition shows there’s a market for their product or the problem they’re trying to solve.
Small businesses that are successful use competition to their advantage. They study their competitors and find out what their competitors are doing right and what they’re doing wrong. Successful small business owners pay attention to their competitors’ marketing strategies, pricing and customer satisfaction.
Simply studying your competition is not enough, however. Once you see what’s working (or not working), adjust your business strategy accordingly.
10. Adapt to Change
Running a successful business means being able to adapt to all types of changes — changes in customers, technology and competition.
Don’t shy away from new technology. It’s easier to adapt little by little as technology becomes mainstream rather than implementing a huge change several years down the road.
Success often depends on not being married to one’s product. Monitor your customer’s needs. If they change, so should you. Don’t be afraid to modify your product and pricing models.
11. Don’t Reinvent the Wheel
Another way we can learn how to make a small business successful is by learning from those who have come before us. Read small business success stories, find similarities between you and them and look for a mentor who can guide you in your journey.
Examples of Successful Small Businesses
So, what does a successful small business look like? Here are a few examples of companies that have gotten it right.
3 Men Movers
This small business has been operating as a family-owned Texas moving and packing company for more than 30 years. It’s expanded with offices in Houston, San Antonio, Austin and Dallas and serves more than 30,000 clients each year.
Recently, it earned spot No. 35 on Fortune’s 50 Best Small Workplaces list in 2019. What’s more, 3 Men Movers has been accredited by the Better Business Bureau (BBB) since 1997 and maintains an A+ business rating and an overall 5-star customer rating. It also has been certified by GreatPlacetoWork.com, with 97% of employees agreeing the employer can’t be beat.
What began as an idea in a college dorm in 2003 has turned into a successful cross-continent business with a staff of more than 1,100. Today, it’s a go-to for many business owners looking to create a website or ecommerce store with ease, with millions using the company’s online platform.
From a company-culture perspective, you can tell Squarespace has invested in its people. So much so that over the years, it has earned numerous awards, including Fortune’s 50 Best Workplaces for Parents (2017) and Hired’s Top 10 New York-Based Employer Brands (2017-2019). Squarespace also has earned an A+ rating from the BBB.
Fast Capital 360
We know, we know: We’re tooting our own horn here. But we’re seriously proud of our company culture and the success we’ve achieved helping small business owners just like you. Since our start in 2013, we’ve assisted more than 9,000 entrepreneurs get the funding they need to grow their business or weather slow times.
After years of dedication establishing ourselves in the industry, we’ve earned an A+ rating with the BBB. Additionally, more than 800 reviews from satisfied business owners have granted us an “excellent” rating on Trustpilot. And our employees are pretty happy too, awarding us a 4.6-star rating on Glassdoor.com.
Running a Successful Small Business Takes Effort
As you can see, there’s no one recipe for success. Small business success is dependent upon your ability to manage many elements and look for ways to continually improve. It’s all about staying ahead of the curve.
Fortunately, there are many resources out there and things you can do to grow your small business fast. But remember, when it comes to building your company, slow and steady wins the race.