If you own a small business, the odds are stacked heavily against you. According to Karen Klein of "Bloomberg Businessweek," only 39 percent of small businesses are profitable, with 30 percent breaking even and 30 percent taking losses. Every entrepreneur dreams of falling into the profitable category; and though the challenges are numerous, practicing sound business strategies will significantly increase your chances of success.
Quality Customer Base
Any successful business, be it big or small, has a steady foundation of quality customers. Steve Reyna of Power Home Biz writes about the 80/20 rule of business, which states that as much as 80 percent of your business profits comes from just 20 percent of your customers. While the majority of your customers provide you with only occasional business, the most valuable ones single-handedly keep you afloat. The ability to attract and retain these high-value customers is a factor that all successful businesses focus on.
Failing to dictate rules and procedures regarding the operation of your business will result in an inconsistent business experience. This negatively affects not just the customer base but the employees as well, completely undermining the entire business process. Companies that set clear expectations and policies develop a repeatable practice of doing business and are able to refine it over time to best meet the needs of workers and customers.
A business is doomed to failure if it's not run by dedicated management with a passion and gift for leading others. Nick Vitalari, an author, consultant and business educator, writes that all successful business platforms begin with leadership, vision and a clear persistent purpose. Even if a business provides quality products or services to the customers and hires the most skilled workers, it will not succeed in the long term without strong management at the top of the organization.
The most successful companies are managed by entrepreneurs who are unafraid of taking a chance on an idea or vision. Following the established methods of other successful businesses may not always work for your own purposes, so it's necessary to develop your own best practices. Smart business owners know when a risk is appropriate based on past experiences with failure, whether that failure is personal or observed in others. To truly thrive in the business world, a certain amount of innovation is required.
High-performing Customer Service
Since customers make or break a business, it's vital to treat them right. A company that does not create a pleasant environment for its customers is unlikely to stay in business at all, let alone succeed. Satisfied customers keep coming back, helping to support the business over the long term. Successful businesses must also ensure employees receive necessary customer service training in addition to keeping workers happy and motivated as a constantly shifting work force or one that is at risk of burn out may lead to an inconsistent experience for the consumer.
- Power Home Biz: "Key Success Factors of Your Small Business"; Steve Reyna; 2011
- Moxie Insight: "12 Critical Success Factors for Business Platforms"; Nick Vitalari; November 2009
- The Netsetter: 3 Key Success Factors for Entrepreneurs
- Bloomberg Businessweek: What's Behind High Small-Biz Failure Rates?
- Photo Credit Jupiterimages/Brand X Pictures/Getty Images
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