Only 33% of small business owners make it 10 years or more, and only about half make it five years, according to data supplied by the Small Business Administration. With odds like that, we wanted to know: What’s the secret sauce for creating a successful business? After examining a bevy of small business owners that have been beating the odds, we’ve concluded that while there’s not one secret ingredient to ensure survival (although tenacity and drive certainly help), there are a mix of universal factors that can give companies a definitive, competitive edge. Read below for the six secrets to success:
Test ideas big and small.
Serial entrepreneur and inventor of the Lean LaunchPad Steve Blank will tell you to forget the business plan and test your product and service ideas in the real market as soon as possible. Now that A/B testing is easily available to the masses, you don’t even have to take a chance on messaging; you can test everything from a line of products to the tagline on your website. Essentially, you eliminate risk and make more educated decisions.
Make customer satisfaction your top priority.
In today’s digital marketplace, the customer is king more than ever. Social media platforms and review sites give customers the place to express their opinions and voice their needs. Small businesses should engage with their customers in this digital space as much as possible: responding to feedback regularly and acting swiftly if there’s a problem. This type of digital engagement ensures a high return with little marketing costs, as companies can leverage positive online reviews to generate new business and utilize social media as a customer service platform.
Be smart about finances.
This one might seem obvious. But many small businesses end up going into debt. They spend more than they have with the expectation that they’ll make it back quickly. Then, quickly never comes. The lesson is to never spend more than you have, be frugal, and save as much as you can. To help with these goals, there are several apps to help with daily finances, as well as best bookkeeping practices to keep in mind to make very dollar count.
Hire the best people.
Some top CEOs have said that the secret to success is hiring people who are better and smarter than you are. Even if you are only hiring one other person, make sure he or she is the most qualified to get the job done. Of course, also determine if you and any others on your team can work well with the potential hire. There has to be a cultural fit, too. Putting together a team that is cohesive and has chemistry can go a long way to achieving success.
Make thoughtful decisions.
Anyone who has read Disney War (Simon & Schuster, 2005), an exposé on Michael Eisner’s tenure at the Walt Disney Company by author James B. Stewart, should understand the danger of shortsighted thinking. In Eisner’s case, miscalculations, guesstimates, and emotional decisions that ignored facts may have cost the company billions. For a company as diversified as Disney, it could be chalked up to growing pains. But the same wouldn’t be true for small businesses. So, you have to do due diligence before making any changes. Feel free to listen to your gut and heart now and then, but only if your brain and the facts agree.
Having a good idea will only get you so far. You have to be willing to do the hard work – from creating a vision to making sure every cog is in place to turn that vision into reality. There are no shortcuts, after all, to making your original idea grow into a legitimate, money-making business.
What are your secrets to success? Tell us in the comments section below.Business & Finance Articles on Business 2 Community