Five out of 10 small businesses (companies with less than 500 employees) will survive to see their fifth birthday, according to the Small Business Administration. Successful entrepreneurs that make it to that milestone will have most likely done so because of their ability to apply the following key strategies to their businesses.
No matter what the industry, these traits are typically found in small businesses that survive and thrive beyond their fifth anniversary. As you review these, think about how you are applying them in your world.
1. Adapt & Innovate
As time goes on, the world changes. Technology improves. Laws are amended or new ones created. New productivity improvements, such as widespread prevalence of smart phones, affect not only the communications of a business but can also affect how its product is consumed.
“Uncertainty” is the new buzzword that you hear repeatedly amidst our tumultuous political and economic climate.
With constant fluctuation, the only way a business can survive is by adapting to the new world and consistently tweaking their products and services.
Just take a look at the evolution of cell phones throughout the previous three decades for a visual. As technology improved, lifestyles changed and business operations transformed, so did the products that cell phone manufacturers produced.
What happens when a company doesn’t change? Ask Kodak, once a market share leader of photographic film sales and now not even a blimp on the digital camera scene. If you aren’t adapting to your customers, your competitors will – just ask Kodak.
While successful entrepreneurs adapt their companies’ product/service offerings, some do so without a dedicated research and development department. These business owners don’t do it alone, though. Often, these bosses empower their employees across all departments, which can result in suggestions to improve efficiency or boost results.
After all, who is better qualified to identify everyday problems than those that are on the ground every day?
2. Stay Connected With the Customer
Successful entrepreneurs know that they cannot invent the next big thing or improve their products or services by living only in their world – they must stay attuned to customer feedback and needs, continuously looking for opportunities to improve their services.
This point goes hand in hand with innovating because solving problems for customers is never complete. There will always be room for improvement or the development of new products or services entirely, since change is constant.
Staying connected with customers involves not only listening to client feedback but also applying critical thinking skills that can help businesses anticipate future needs.
“You can’t just ask customers what they want and then try to give that to them. By the time you get it built, they’ll want something new,” Apple co-founder Steve Jobs is reported as saying.
While there is some truth in Jobs’ statement – customers don’t always know what products they’ll use and how they’ll use them – successful entrepreneurs have a good grasp on the problems that their clients face and develop solutions to meet their needs.
3. Understand and Articulate Why Their Product/Service Is Better
A company could have the best product or service, but it won’t do anyone any good if the company is unable to persuade anyone to try it. Communicating product benefits can break down at two main points.
The first point is a lack of understanding why people like the product or service. If the majority of customers buy a product for X but the company believes that Y is what gets the product off the shelf and promotes it, then the business is focused on communicating the wrong benefit.
Management guru Peter Drucker once said, “The buyer rarely buys what the seller thinks he is selling.” Know “why” your clients are buying.
The next aspect of this is communication itself, which can’t be overvalued. Think about a recent conflict at work. The source of a problem with a colleague can often be traced back to poor communication or a simple misunderstanding. The same thing can happen when companies attempt to communicate with customers – things can get lost in translation.
Communicating how and why a product will benefit a prospect is key to running a thriving business.
4. Strive To Improve
Since successful entrepreneurs know that their companies must constantly improve their offerings, they also know that they can always better themselves, as can their employees.
These CEOs value education in every form – articles, podcasts, Google hangouts, conferences, etc. They help their employees elevate their skillsets and also focus on improving their weaknesses.
The thing about successful entrepreneurs is that they’re never content – they’ve always got an eye on tomorrow and how they need to improve to continue to be prosperous. Encourage your employees to grow and learn on a daily basis. You will reap the rewards in the long term.
5. Create A Profitable Business
Earning more money that you spend is a simple concept, but it’s one that needs to be addressed. Some business owners can have a solid grasp on the first four concepts, but struggle to make their idea work financially.
If you can’t figure out a way to take in more money than you spend, then a fabulous product and superior customer service skills won’t matter. Because there won’t be a business.
Of course, a new venture may lose money initially. Experts suggest that a new company should budget to lose money for the first 2-3 years. However, if you are spending more than you make in Year 4, you need to reassess your business model.
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