As a small business owner, it can be difficult to know what to prioritize amidst all the advice directed your way. Where should you begin? How do you know what to focus on? These and many more questions threaten to overwhelm any entrepreneur who does not have decades of experience and training.
Even then, operating a business is a complex and multifaceted process. Knowing how to organize your time and labor is a necessary step to greater success. In the post-COVID economy, even more questions will occupy your mind as you attempt to elevate and grow your small business. Fortunately, you can maximize your potential by starting with a strong foundation.
Explore the foundational elements of any successful business strategy, from finances to employee retention strategies. These are the six important things all small business owners should do as they develop a competitive and thriving business model.
#1 Get your finances in order
First comes finances. It should go without saying that monetary considerations are the most essential points to consider when building and operating a business. However, many entrepreneurs hold onto false expectations about money. From initial startup financing to retirement, you need a plan in place for not only surviving but thriving no matter how the economy performs.
Start with business financing. Your outlook for loans and investor funding depends on your business plan, collateral, and business credit score. If you can build up these elements of your financial situation, you’ll have much more room to navigate market swings.
With small businesses, the credit of the owner is frequently checked as well. This makes it even more important to make payments on time and avoid high debt ratios. From here, establish a retirement savings account like a traditional or Roth IRA. By paying into one of these accounts over time, you can plan a lucrative exit strategy down the line.
Whether you decide to sell or liquidate at the end of your career, your retirement account will ensure your finances are in order.
#2 Study your competition
Next, conduct a thorough examination of your competition. This starts with a set of competitive analysis questions that help you define who the competition is and what their unique value proposition might be. A complete study nets you a better picture of the industry.
However, many small business owners make the mistake of failing to keep up this research. Markets are constantly evolving, as are the players within them. To best hone your competitive edge, you’ll need a pulse on the market through consistent study of similar businesses in your industry or niche.
By analyzing the competition thoroughly and consistently, you also set your business up for greater success and a host of benefits. Among these are the innovation potential and productivity gains that come with pitting yourself against another business. That’s because competition forces you to think outside the box and develop new business strategies. Ideally, these strategies will yield high returns.
#3 Invest in marketing that gives you ROI
A return on investment (ROI) is a key indicator of worthwhile business processes. Just about everything you can improve upon costs money. Whether you’re investing in employee satisfaction or a digital marketing campaign, it’s your ROI you want to pay attention to.
The choices we make in business research, development, growth, and innovation all have a measurable dollar impact. Sometimes you won’t see returns for a long time. However, evaluating all your investment options for maximum returns can help you make ideal business decisions.
For example, investing in content marketing can be costly and hard to gauge in terms of ROI. By evaluating successful marketing blogs for small business owners and learning from the insights they provide, you can better position your campaigns with measurable success metrics. From here, you can make data-driven decisions that support your business’s growth.
#4 Regularly talk and listen to your customers
Then, focus on what the customer is saying. In the digital age, we have all the tools we need to measure customer satisfaction and gather feedback. From social media polls to Google reviews, the platforms for customer engagement are widespread and highly accessible. Use them to learn what your customers have to say.
This information is essential to gather since other customers will be swayed by what people are saying about you online. For instance, 89% of customers check out a local business’s online reviews before investing further and 85% of consumers trust online reviews as much as the recommendations of friends and family.
By focusing on this feedback, you can build a better business. Not every review will be reasonable or even honest, but patterns reveal weak points you can address as well as growth potential. Engage, listen, and interact authentically to take the most value out of customer discourse.
#5 Collect and analyze key performance indicators
Similarly, key performance indicators (KPIs) are measurable aspects of your internal operations that can lead to all kinds of innovation potential. That’s because KPIs reveal exactly how your important operations are working according to the metrics you define.
To begin, align these metrics with business goals. Product sold is always a useful one for commerce-based operations. Webpage engagement, new leads, and productivity are several others that can be used to measure success. If your goal is to enhance any of these features, you’ll need methods for collecting and analyzing the data.
Fortunately, we live in a high-tech world. The Internet of Things (IoT) offers a host of smart sensors and monitors that can help you collect KPI data. Then, AI and deep learning algorithms in analytic software help you form a narrative from your collected insights. Use these tools and performance indicators to evaluate methods of improvement across your operations.
#6 Implement a strategy for recruiting and retaining quality employees
Last but certainly not least, implement a strategy for recruiting and retaining top-quality employees. Your workers are one of your most valuable assets, and in the Great Resignation era, it will take a thorough strategy to keep them satisfied and productive.
Toxic company cultures of any kind will not fly. Yours needs to be based on empathy and inclusivity as well as productivity. This means developing people-focused policies like flexible schedules, work-from-home accommodations, paid leave, and competitive wages.
Without a competitive approach to treating your workers (which means treating them like humans), you’ll fail to retain them. Turnover expenses cost between 16%-213% of an employee’s pay, meaning sharp financial consequences for an inconsiderate approach. Instead, build a healthy company culture and you’ll better ensure the survival of your business.
Over to you
Small business owners have to juggle many moving parts and complex considerations in the course of running a company. Narrowing down these considerations to these six important items helps cement a successful business plan. That’s because these elements—from finances to company culture—are uniquely impactful to your outcomes and ROIs.
If you were building a house, you’d want to start with a strong foundation. The same is true when building a business. These six important things all small business owners should do are your ticket to a strong operational foundation. Consider and implement them, then watch your business scale to meet your goals.