Many small businesses don’t make it to five years and some struggle just to get through their first two years. Entrepreneurs need a combination of luck, savvy, understanding of their customers, quality products, first-rate service, and a lot of other factors to succeed. Their margin for error is slim and their resources limited.
What distinguishes successful small businesses from the rest? The answer to this question varies from ability to maximize resources to having and implementing a plan to maintaining team motivation. Learn more about the factors that drive small business success.
Having a Plan
A plan is your guide when you encounter challenges and opportunities to grow your small business. Your business plan outlines your short and long-term objectives, ways you implement to achieve them, and projections. This also covers tasks and projects your employees need to accomplish to reach your goals. Keep your plan flexible because you’ll never know what the future holds. Any niche is volatile and may experience various external factors that can affect its profitability. A plan also maintains the morale and motivation of your team. If they don’t have any idea about the direction of your company, they might look for greener pastures elsewhere.
Will to Persevere
Some entrepreneurs give up because of the challenges they think they can’t overcome. One of the factors that determine small business success is perseverance. Weeks or months of poor sales and low morale can affect your employees; however, as the leader, you need to set an example. Teach your team the value of perseverance. Pushing through despite failures allow your small business to grow and achieve its goals. Perseverance without a plan will lead to failure. Create a flexible plan and objectives your team can adhere to in times of poor business performance. Your employees need a vision they can follow. As the leader it’s up to you to provide them with one.
Impermanence of Success or Failure
Small business owners must be aware of the impermanence of success or failure. A business can be successful for a few months then suddenly freefall the next months. Customers’ tastes, wants, and needs can change in a negative way because of economic factors, trends in the niche, or a slow down of your company’s cash flow for product development and marketing. Celebrate success but always be ready for challenges that your company may encounter. Train your team so that they always have updated skills that can address the needs of your target market. Create policies and plans that your employees can follow in times when crisis strikes. Be flexible and be open to new ways of doing things. Adaptability allows you to change your strategies and use new technologies that improve your operations.
Team Spirit and Shared Values
A leader should be able to raise the spirit of their employees. This keeps them engaged in their work and the projects they take on. Open lines of communication to air out differences and questions about their job performance. Build a strong work relationship with your employees so that they stay focused on the short and long-term objectives you laid out for them. Outline the vision of your small business so that your team knows you share their values. It’s no longer just about getting a salary, but about core values and shared principles. Join or start your own community projects that help your city or just the neighborhood your company is in.
Small business success hinges on the motivation of your employees. Understand what drives them forward and give more of it. Motivation can come in different forms such as monetary, personal goals, and challenges. Employees want competitive compensation for their work. Provide rewards for excellent performance. Learn more about their career and life goals. Do these match with what you offer and the direction of your small business? Provide them with challenges that hone their skills and boost performance. If within your budget, allow them to participate in training seminars that broaden their knowledge and skills in their area of expertise.
Reliable Business Partnerships
You need to find reliable partners that allow your team to maximize their talent and experience. Designating tasks to employees that lack the skills to do them will lead to more mistakes and poor productivity. These will increase your operational costs because you must hire or train employees. They must undergo training that takes them away from productive work. Small businesses don’t have an abundance of resources or time to wait for some employees to be ready to do their job. One of the tasks you should consider outsourcing is bookkeeping. An outsourced bookkeeping company can update your books while you concentrate on growing your small business. An outsourced team of bookkeepers get the work done quickly without sacrificing quality.
Clear Definition of Success
Define what success is to your small business. Doing so enables you to create goals that move you closer to it. Convey this definition to each employee regardless of their position and job. This allows them to do their work to the fullest of their abilities and clarify parameters for performance rewards. Keep this definition flexible so that you can reorient your objectives once you’ve accomplished the previous ones you created. Small and precise steps allow your small business to grow while overcoming obstacles.
Ability to Maximize Resources
Small businesses have limited resources they need to allocate effectively. Prepare a budget and identify which aspects of your growing business need the most financing. Doing so allows you to maximize your resources and direct them towards profitable projects and products. Having a budget also keeps your team within spending limits. Find ways to reduce expenses and increase your small business’ capital. If your employees don’t have to work in an office all the time, implement work from home policies. Invest in software and systems that simplifies work and reduces redundancies.
Identifying these small business success factors allow you to grow your company effectively. We at Robookkeeper can be your outsourced bookkeeping partner. Our experienced team of bookkeepers can update your accounting books while you focus on the success of your small business. We offer first-rate accounting services for small business owners like you.