5 Tips to Grow Your Small Business
Over half a million Americans start new businesses each month but about one-quarter of all new businesses fail within the first four years
According to a recent Business 2 Community article by contributor Sarah Daren, one of the biggest challenges for entrepreneurs is inadequate cash flow. “Many small businesses fail to successfully maneuver the steep climb required to successfully scale their efforts,” according to Daren who offers these five tips to help new business owners improve their chances for long-term success.
Get Your Employees to Take Ownership
Regardless of the size of your new business, fostering a sense of ownership among all of your team members can go a long way toward ensuring growth. Daren recommends “holding regular debrief meetings to encourage feedback and create forums during which you can listen to your employees’ perspectives.” Adhering to strict time management and performance accountability structures and focusing on “ownership thinking” during the hiring process are also essential to success according to Daren.
Focus on Your Core Competencies
Author Sarah Daren warns that “many businesses stray from their founding model, values, or market and can accordingly experience devastating (and even fatal) loss of quality, direction, or customer base” and sites LEGO Group’s deviation from its original vision as an example.
Between 1998 and 2003, the company experienced a 26% decline in sales after deviating from its original vision. By refocusing its efforts and launching a “Back to the Core” marketing campaign, LEGO rebounded and is now a multi-billion-dollar business.
Pay Attention to Your Data
Small business owners today have access to a wealth of data but far too many never take the time to analyze it. Knowing things like which marketing tactics deliver the best ROI and which customer retention efforts yield the best results can be invaluable to your growth. According to Daren, “Your ability to utilize data can make or break your company.”
Make Customer Service a Top Priority
The cost to acquire customers (CAC) is typically far greater than the cost to retain existing customers. And social media platforms, including Facebook and Twitter, have made it far easier and less expensive to care for your customer base. Recent studies have shown that social customer care costs about $1 per interaction while phone support costs at least $6.
Daren says that “prioritizing an effective customer service and engagement plan can be a strategic way to develop better customer relationships and retention.”
Focus on Your Unique Value Proposition
In today’s highly competitive marketplace, focusing on what makes your small business better than your competitors can make the difference between continued growth and failure. This is your unique value proposition, or UVP. Unfortunately, far too many new businesses focus too heavily on price, assuming that their customers will do business with the lowest bidder regardless of other, important factors like quality, responsiveness, expertise and customer service. If lower price is indeed your UVP, by all means, promote it but be aware that some potential customers will equate it with inferior quality. So you should also tout other benefits to assuage their concerns.
Following these five tips can improve cash flow for your small business and ensure your long-term growth. To learn how our invoice factoring services can help grow your small business, give us a call at 1-800-297-6652.