Learning how to run a business can be daunting. According to data from 2018, about one in 12 businesses close each year in the United States. On the other hand, the U.S. Census Bureau states that over four million companies opened last year. These numbers only kept on growing through the second half of the year, reaching a 45% increase by the first months of 2021. If you're thinking of opening a new business, looking to grow your clientele base, or hoping to increase your revenue, then here's your guide to success.
Why Do Businesses Fail?
Running a company isn’t for the faint of heart. Starting a business is risky by its nature. To make sure you understand how to run a business, it’s crucial to know what can go wrong and how to avoid it.
With that said, here are some common reasons why companies fail and why others succeed.
1. Unclear Differentiation
Novice entrepreneurs — perhaps even experienced ones — sometimes overlook how their business competes in a crowded marketplace. Failing to address competition and how to offer something different in a local market can lead to getting pushed out of business altogether.
Have something unique to offer — perhaps it’s better product quality or greater service. This always sets a company apart from its alternatives in the market. Capture your share of the market by making yourself irreplaceable. Creating a strong business plan and understanding your customers with research will help create a strong strategy and make sure you know where you fit.
2. Poor Management
Business owners need strong management skills to oversee their employees. They must ensure that all aspects of the business, including hiring and culture, are priorities. If these aren’t kept in check, high employee turnover is likely.
Every member of the team should want to be a part of your work environment. Your company culture should be healthy and motivate your workforce. The immediate benefits of this kind of workplace dynamic between management and workers are reduced employee turnover and heightened productivity.
Creating core values within your business plan of who you want to be as a company will help guide your own management and other managers you hire.
3. Weak Marketing Efforts
Marketing is a vital aspect of running a business at all stages, but leaving it as an afterthought and cutting budgets when times are tough can be a slippery slope that leads to failure.
Business owners must know their target audience, how to reach potential customers, and how to get the most out of their marketing budgets. You should consider learning from guides for SEO, social media, paid advertising, and traditional marketing to get an understanding of what you want. Sometimes, hiring the right experts and technology can help ensure marketing runs smoothly when business owners have too much on their hands.
12 Pro Tips on How To Run a Business
Once you have a better understanding of why businesses fail or succeed, it's time to get down to work on making your own flourish. Here are some expert tips on how to run a business in 2021.
1. Stay on Your Customers’ Minds
Most businesses that survived last year's chaos were those that had a solid presence in their customers' minds. If you're a small business and you're still unable to operate normally because of lockdowns and occupancy restrictions, don't let that hamper your marketing efforts.
If budgets are tight, create valuable content that your potential customers will engage with. This can be a DIY blog or instructional video that you can post for free on your website or YouTube.
2. Understand Your Lead Management
Do you fully understand why leads don’t become paying customers? Diving into your leads list and investigating why they don’t convert can help you refine your process so you earn more customers.
Review your leads with your customer team at least once a month and account for all the reasons they may not be turning into customers. Make a plan on how to address any concerns or issues. Having a lead management plan will help you know what good looks like and understand where your leads are coming from. When you know where your leads are coming from you will be better able to know where to spend more money.
3. Keep Tabs on Your Competitors
Knowing who your competitors are and what they're doing is a great way to learn in business. Don’t copy what they're doing, of course — but monitoring your competition will give you a better idea of what's helping them succeed, allowing you to adapt these insights to your specific circumstances.
Create a spreadsheet of your competitors and keep tabs once a month on what they’re doing. Follow their website and social media to see what’s new, what they’re promoting, and how their social audiences are growing and engaging. Understanding your competition will help you know when to update some of your marketing, what benefits you should focus on, and when you may want to consider adding products or services.
4. Provide Great Service
Forgetting this step might be the primary cause of your company's demise, even when everything else seems to be running smoothly. Your clients will be quick to walk out the door, leave you bad reviews online, and tell their friends and family to steer clear if you don't treat them excellently.
Give yourself a weekly deadline to respond to reviews, both positive and negative. Potential customers often don’t mind an occasional bad review, but they want to know how you’re approaching it and what you’ll do to address an issue.
5. Stay Consistent
Find the strategy that works for your business and keep at it. This will ultimately create positive habits that will translate into more revenue. Remember — consistency is key to making your business work and make money.
Understand your key performance indicators that grow your business and review them regularly so you can gain insight into how your business is doing season over season and year after year. Many companies will abandon a strategy before it has a chance to even work. Search engine optimization for example can take a long time to start seeing results. Staying committed can be a key to success.
6. Focus on Your Core Customer
Understanding your core demographics — their wants, needs, and pain points — will give you a head start to establish a winning marketing strategy that's targeted directly to them.
Build ideal profiles from your best customers and understand their habits so you know how to best reach them. Younger customers may best be reached through social media and review platforms while older clients may like email newsletters more.
7. Use Social Media to Your Advantage
These days, social media is crucial to growing a business. Roughly 4.48 billion people use social media worldwide, and the numbers are only increasing. Create appealing content that will make your core audience want to share what you do online. This will put you in the eyes of their friends and family, ultimately leading to more customers for your business.
Make sure your social media profiles are set up correctly with the right address, phone, and operating hours information. Check-in at least several times a week to respond to questions and comments from customers.
8. Create Direct Connections With Your Clients
Keep the conversation running to create a bond with your target audience. Even if you decide to automate your social media posting, make sure to give it a human touch by asking questions and answering your followers' comments and inquiries.
Give your customers more ways to get in touch with you. Adding live chat and text messaging to your communication tools provides your customers with more flexibility to connect with you when they’re thinking of your services. Being accessible when you’re top of mind with a customer is worth more than gold.
9. Don't Be Afraid To Reach Out
Prompt your clients to sign up for your newsletter so that they never miss a deal. This will create another level of engagement, bringing more traffic to your site and hopefully increasing your sales. Just make sure not to spam your subscribers — you don’t want to end up in their junk folder.
Look for an email marketing platform or vendor to help you put out email communications and track them. Create a monthly calendar for what you plan to put out in newsletters, including offers, news, and educational content.
10. Invest in Proper Branding
Creating a bold brand identity is an excellent way to ensure that your clients know and remember you. This will help you to be the first thing that comes to mind when they think of the product or service you sell.
If you can’t afford to hire branding services, take time to really understand your company’s purpose beyond making money for you and your employees. How are you bettering the lives of your customers and community and how are you demonstrating that to your audience?
11. Build Lifelong Relationships
It’s much easier to keep a returning customer than it is to earn a new one. Treat your customers and potential clients as you would someone with whom you'd like to build a lasting relationship.
Make your services feel more personal and tailor-made to show your clients you care about them and that you don't merely see them as a means to money. Communicate consistently with them with offers and reminders that you remember special occasions such as birthdays.
12. Hire the Right People
Build a team of people whose values are aligned with your company's. Employees who share your mission and vision will work their hardest to help you achieve them every day because they see the businesses' success as their own.
Your employees are your business’ most valuable asset. As the customer-facing representation of your business, they should want to give your customers the best possible impression. On top of investing in hiring, make sure to give your team consistent feedback, positive reinforcement, and autonomy.
Help Your Business Thrive Today
Operating a business is no piece of cake. Hopefully, this guide will help you get started on your entrepreneurial path. Want Scorpion Marketing to help with your business plan? We provide marketing and technology solutions to help your business thrive, offering guidance and support every step of the way. Talk with us today!
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