Running a small business is not easy. Nor is it safe. More than half of startups go out of business within four years.
Part of the key to staying in business is making sure the business solves an issue that someone actually needs solving. It also is important to start a business where you have relevant experience, and to watch the monthly cashflow, according to Small business speaker Barry Moltz.
Recently Moltz outlined some other challenges small businesses face in a wonderful blog post on the Nextiva blog—and how to solve them.
One issue is a lack of employees.
Roughly 78 percent of all small businesses have no employees, and this keeps a business from growing and having enough resiliency to stay competitive in many cases. Small business owners must think in terms of building a company and not just making a job for themselves, noted Moltz. This helps them move in the right direction to get beyond this single-employee mindset that ultimately can kill a business over time.
Useless meetings is another business killer. The average executive spends roughly 7.8 hours in meetings each week. Small business owners can’t afford this time drain. The trick is never going into a meeting without an agendy, time limit and action items. Standing also helps, advised Moltz.
Customer communication matters a lot, too.
For every month that a business does not communicate with its customers, according ot Moltz, they lose 10 percent of their influence. Typically a business will only reach out to their customers when they are looking to sell something, but the smart small business will develop a marketing plan that automatically sends valuable information to customers even when a sale is not involved. This priming the pump reinforces the brand and helps improve sales in the long run.
Staying in contact with customers also helps with retention, and that’s important because replacing customers costs an average of 6 to 7 times as much as keeping existing customers happy.
The average business loses half of its customers every five years, so firms that want to last should make sure they deliver wonderful customer service so their existing clientele stays.
And when it does come to getting new business, companies would be wise to talk with their existing customers for a referral. Moltz wrote that roughly 91 percent of customers say they would give a referral. The problem is that most businesses do not ask. Businesses that want to succeed need to include an appeal for referrals in this regular communications plan they already should have in place to stay on the customer’s radar.
While odds are against the average small business, there is a lot that business owners can do to tip the odds in their favor.
Edited by Rachel Ramsey