It’s rumored that up to 70% of small businesses fail within the first year. But that’s not you, right? Of course not. YOUR idea is going to be the next Uber. The next Chipotle. The next company that people will refer to as “The Jiffy Lube of oil changes”.
Hopefully. Success doesn’t just happen because you’ve got a cool idea. And it doesn’t just happen if you work hard either. Success in small business requires a unique combination of factors, some of which many entrepreneurs don’t really think about. But all of which are necessary if you’re going to survive and thrive.
Define Your Niche
When every new restaurant touts its Pen-Mediterranean, farm-to-table, global fusion cuisine it’s hard to decide which one deserves your business. This is a huge reason why restaurants, specifically, have such a high failure rate: They can’t define what they’re doing differently. If you have no specialty, nothing you can point to and say “That’s what we do that nobody else does,” you’re failing before you even open your doors.
This doesn’t just apply to restaurants. If your retail store is selling the same clothes sold online or at Nordstrom, why would anyone come to you? Before you even sit down to write a business plan, think long and hard about what sets you apart.
Manage Money Wisely
Many entrepreneurs budget only for startup and beginning operating costs, completely forgetting that it takes a lot more than initial inventory and buildout to equal success.
“You need to plan to not make a penny for a year and survive both personally and the business,” says Geoff Levy, a Florida attorney who recently went out on his own to start his own firm. “Undercapitalized businesses always fail.”
But it’s more than a matter of just planning for a lack of cash flow. Success also involves investing in things that will make you succeed, and failing to budget for that means you won’t reach your full potential.
“In business, you need to invest in leads, inventory, marketing, and personnel to get returns,” says Orlando Montiel, a business coach who recently authored The Ultimate Real Estate Agent Book. “People who say I don’t have the money to hire an assistant, or PR, or a marketing team, I tell them to go back, get a job, and save until you do.”
Hire The Right Team
People who say “If you want something done right, do it yourself” are an interesting contradiction, because if they’d hired right, they’d never have to say it. Surrounding yourself with motivated people who can do your job and believe in your business is the only way you’ll have time to focus on the big picture. That begins with hiring the right people.
“Without a motivated team, no matter how great your product or marketing you’ll never be able to execute consistently,” says Nedal Ahamd, founder of Pincho Factory, a franchised chain of fast-casual restaurants.
But it’s more than just bringing on people who can do the job. It’s also a matter of hiring people with complimentary attributes to your own.
“You must have the willingness yourself with experts that have the knowledge and skills you don't,” says Allison Bolton, president of Atypical Consulting and Events in Reno. “You can have all the passion or hustle in the world but still fail if you don't know what you're doing.”
Market Your Business
Building it and believing people will come is a perfect business strategy if you happen to be running a cornfield baseball diamond for dead major leaguers. For literally every other business on the planet, you’re going to need to market yourself.
“Whatever business you’re in, you’re in the business of marketing,” says Montiel. “Marketing is what brings clients to the door, so you need the right marketing campaign both online and offline to not only make you an expert in your field, but a celebrity. That’s when the clients start coming to you.”
Once you’ve effectively marketed yourself, success is just a matter of converting those leads. And while that is an entirely different set of skills, putting together an effective sales team can ensure all your marketing efforts don’t go to waste.
Identify Your Business’ Demographic
“A common mistake I see new business owners make is not researching the market to make sure there are enough customers to sustain the idea,” say Gus Moore, who along with his wife Michelle has run The Miami Tour Company for nearly a decade. This holds especially true for tech startups or app developers, who despite having a novel idea, don’t stop to think how many people would actually want to use it. No giant company is going to buy you out if they don’t think the masses will buy your product. So if the best thing anyone says about your new app is “Wow, that’s cool,” you might want to head back to the drawing board.
What Do Small Business Owners Say?
While the five things mentioned above are crucial for success, the small business owners we spoke to mentioned a number of other attributes entrepreneurs need to be successful. The best among them:
“Discipline. It ensures you're grinding from the moment you're awake until the moment you go to sleep. DISCIPLINE ensures your staff is drinking your Kool Aid on a daily basis.” - Aneice Meinhold, co-founder, Phuc Yea Restaurant.
“Mobile friendly technology. I had to buy and adapt to all sorts of apps in order to not lose clients by waiting for me to get back to my office for quotes, product/manufacturer info etc.” – Louis Ayala, A/C Contractor
“Strong communication skills and the willingness to work harder than you've ever worked before.” – Aubrey Swanson, founder, Auboom Media
“Passion. If you don't have passion for what you're doing, the fire you think you have will eventually blow out. If you have passion, your fire is eternal and you are willing to withstand your business through change, transitions and obstacles.” - Krystal Ariel, founder, Love Life Wellness Center
“Patience. Don't freak out when something doesn't go your way or you don't like what someone said, have patience. It will all work out.” – Jessica Wade Pfeffer, President, JWI Public Relations.
“Jameson.” – Kevin Danilo, Owner, Batch Gatropub