Starting a small business sounds very simple on paper, and there’s more than enough stories about daring entrepreneurs who quit their jobs to build million dollar businesses. However, what most people don’t tell you is that starting and running a small business is practically harder than working at a conventional job and drawing a salary.
As a small business owner, you technically don’t get paid until your business starts turning a profit; whereas you get a salary at the end of the month in a 9 to 5. Small business owners also don’t get to stop working for the day; overseeing managerial functions and networking with potential partners could also eat a big chunk of your evenings.
Despite all the hard work that you’ll put it, it is disheartening to know that about 50% of small businesses don’t make it past the first five years. However, the three tips below can help you tweak the odds in your favor so that your business has better chances of success.
Go grassroots local with marketing
A small business is often a local business whose primary target market are people who live or pass through the immediate locale. Hence, you can’t ever overemphasize the importance of word of mouth marketing to draw new customers to your business. Running social media ads, direct mail, and email campaigns are good, but people are more likely to show up when a family member/friend/neighbor recommends your business than when your ad shows up in their news feeds.
You may want to consider engaging with your local community by forging partnerships with stakeholders. If you run a restaurant, you can open up your doors for concerts, recitals, or a town hall meeting. Other businesses can consider supporting the local sports team, raising funds for charity. Promotions, discounts, and trial offers are also so great way to reach out to grassroots customers.
Adopt new payment methods
Cash is no longer king because the times are changing and it is in your best interest to ensure that your business evolves with the times. You can do all the grassroots marketing that you want and bring hundreds of new customers in; however, new customers won’t translate into increased sales if they can’t pay you for your goods and services.
Adopting payment methods such as credit cards, mobile payments such as Apple Pay, maybe Bitcoin could also help you record an increase in sales. Credit card processing companies offer different kinds of bundles services, terms, and options; hence, you may want to take the time to shop around for the processor that is able to offer you the best service at a fair cost.
Keep your overhead low
Many small businesses are failing today despite the fact that they have excellent products, the perfect pricing, and customers are buying their products and services. High sales volume and revenue are great, but the key number that determines the survival of your business is actually your profit margin. However, overhead costs or operational expenses can eat deeply into your profit margins to significantly reduce the odds of your business success.
To keep your overhead costs low, you can start by rethinking how much office space you need – moving to a home office or a co-working space won’t necessarily be a bad idea for a small business that provides services. You may also want to rethink your payroll to see if you can merge some tasks or outsource some activities instead of keeping in-house staff.