Small businesses are infamous for their high failure rates. However, successful small businesses provide more than enough incentives for entrepreneurs in the form of profitability and job satisfaction. Individuals interested in entrepreneurial success have long roads ahead of them, but there are things that they can do to make their journey easier.
Here are some steps that small businesses can take to boost their chances of finding financial success:
Small businesses have a hard time competing against their larger counterparts in a number of important areas. For example, small businesses cannot undercut their bigger competitors when it comes to pricing because those competitors can afford to purchase in bulk. Similarly, small businesses are less able to marshal the resources needed to take advantage of revenue opportunities both because they have fewer resources and because they do not inspire the trust needed to raise more funds from lending institutions. However, one area that small businesses can focus on is their customer service. Attentiveness to customer concerns, emphasis on face-to-face interaction, and bonuses for repeat customers are only a small sample of the things that businesses can do to improve their customer’s experiences.
Finding a Niche
Since small businesses have little hope of being able to compete against their larger counterparts one-on-one in the same market, many small businesses focus their efforts on niches within those same markets. For example, an independent grocer might not be able to compete on prices against local supermarkets, but that grocer can offer a superior selection of meats or specialize in organic foods. Combined with an emphasis on superior customer service, small businesses that specialize in niches can avoid competing against their larger counterpart’s altogether. However, small businesses that choose this path must make certain that there is profit to be found in their chosen niche.
Researching the Competition
Businesses should always be on the lookout for their competition. This is true for businesses of every size. However, what small businesses should also do is find out about the best practices of established and successful businesses competing in the same markets. After all, if those businesses have found financial success using certain methods, then there is reason to think that other businesses can do the same. Small business owners should not focus on any single competitor to the exclusion of others. Instead, they should take the time to observe the practices of all potential competitors even before they start their businesses, and then adopt the ones that are best suited to their own circumstances.
Small businesses are often limited by a scarcity of both resources and human talent. Business owners who find themselves in need of outside help should never hesitate to seek it out. For example, if a small business has problems with its accounts, then there is no one better to consult than local accounting firms.
Even having taken all of these steps, small businesses still remain more susceptible to financial ruin than their larger counterparts. However, these steps are effective in reducing the risk to small businesses and once taken, do improve their chances of finding the path to financial success.
[This post was written by Craig Daniel and supported by The Workplace Depot, helping start-up businesses. Found photo: business leaders (Photo credit: squareintheteeth)]