It’s never too early or too 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 make progress toward your goals. These run the gamut from operational to practical, and anyone can implement them.
So what makes a business successful? There’s no one ingredient, but by and large, their owners know how to do or practice the following 11 things.
1. They Get 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 finance basics.
Understanding financial principles doesn’t mean you have to become an accountant, but it doesn’t have to be hard 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. They’re Frugal
Fledgling companies tend to struggle with poor cash flow, which is why it’s essential to run your company leanly, from a financial standpoint, from the beginning 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. Expect the worse, in short.
Another way to keep your businesses finances lean is to skip the fancy stuff, at least at first. You don’t want to spend all your money on things that aren’t strictly necessary—things like extravagant offices, the latest technology, and high-end office furniture. It’s crucial to minimize overhead costs as much as possible.
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. They 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 two can be plenty—but there are some important company considerations your business plan should outline, such as:
- Product or service offerings
- Sales and marketing plans
- A financial plan, including a cash flow analysis
- Employee needs
4. They Understand Sales Drive Their 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. It doesn’t matter if your website, brochures, and product are all perfect if you can’t make the sale. What does matter is whether or not you have leads.
The bottom line: build your brand from the bottom up and not the top down.
And speaking of leads, how do you get them? How do you convert them into sales and make sure they return? With 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. They Develop a Sound Marketing Strategy
Small companies that stick around do so because they know how to build a successful business based on marketing. 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’ll also 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. They 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.
Those company owners that survive know that excellent customer service is a huge part of how to run a successful business. Your first job is to create something the customer wants, but you should give them something beyond the product. Your customer wants to feel valued.
Even if you’re not the cheapest option, excellent customer service will make customers come back, so train your staff to provide top-notch excellent service.
7. They 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 are 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. A cohesive team—people with complementary strengths that balance one another—is one part of what makes a business successful.
8. They Never Underestimate the Power of Management
As the old saying goes, people leave managers, not companies.
It’s a cliché for a reason. And high turnover stunts company growth, so if you want to know how to make your business successful, you need to learn some small business management tips.
Your team is one of your most valuable assets. Once you’ve invested time and energy in hiring them, treat them well.
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.
Good managers are one of the keys to what makes a small business successful. Don’t be afraid to seek outside help to learn to be a good one. Improving your managerial skills will pay dividends down the road.
9. They Learn From Their Competition
That’s right. Successful small business owners know that iron sharpens iron. They’re not 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. They 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. Successful Small Businesses Adapt to Change
Running a successful business means being able to adapt to all types of changes—changes in customers, technology, and those competitors we just mentioned.
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, so don’t be afraid to modify your product and pricing models.
11. They Don’t Re-invent 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.
Final Thoughts on How to Run a Successful Business
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 to grow your small business fast. But remember, when it comes to building your business, slow and steady wins the race.