Entrepreneurial streak among the population is at an all-time high. Owing to the digital revolution and booming startup culture, each day, more and more entrepreneurs continue to bud in different parts of the world. However, it is a grounded fact that half of these businesses wind up in the first five years.
In case of small businesses and startups, the percentage is phenomenally higher. With the competitive business environment and dynamic consumer preferences, a small business owner, before starting operations must take a note of the following vital pointers before starting a small business to rest assured about the sustainability of a business model:
1. Define the target audience beforehand
All successful business empires have one thing in common: they are focused on their product offerings and know what runs inside the minds of their consumers. They achieve this by defining their target audience, beforehand. For succeeding in a business right from startup, it is really important to identify your target audience and conduct a beta-test. When an entrepreneur has the right insights about how consumers feel, he is destined to succeed in his/her entrepreneurial venture.
A growing cosmetics brand, Lush Cosmetics with its proposition of environmentally friendly products, identified its target audience beforehand and refined the same for better sales. They found out that women will buy their products more than men. Additionally, they discovered that among women, the ones who are vegans will resonate with the brand in a better way due to its proposition. These findings helped them refine their marketing efforts and streamline product proposition.
2. Conduct Solid Market Research & Get Useful Insights
A small business is always short on resources, therefore, the margin of error is quite small. In order to succeed in the venture, it is really essential to conduct detailed market research in order to obtain important insights. A business owner must focus on involving target audience in product development through preliminary surveys. This will help him/her in delivering according to consumer expectations and minimizing chances of failure due to experimentation.
There are a number of ways for a small business to conduct market research. They can either resort to primary research methods that involve surveying potential customers digitally or physically or they can make use of already published data to allow them to understand competition or create benchmarks. Also, a business must analyze the data and act using digital analytics tools to analyze the data collected from various mediums.
3. Have a solid documented
Planning is the foremost and most important aspect of the success of a business. Failing to plan is, bluntly put, planning to fail. A small business owner must realize this fact early in the game. A business must have a solid strategy for managing various aspects of a business and everything must be documented clearly to ensure minimal errors during execution. As a plan offers a clear direction to efforts, it offers a better chance at success rather than haphazard experimentation that can potentially cost a business dearly.
To create a solid documented business plan, an entrepreneur must: write down his business’ mission statement, standards of performance, perform situation analysis; write down strengths, weaknesses, opportunities and threats; write down buyer persona, target market, and other aspects related to budgeting and marketing to create a document that serves as a guiding stone for future endeavours.
4. Identify innovative technologies for sustained business growth
Technology is the biggest growth facilitator for every small business. Owing to disruptions and innovations in the digital sphere and technological advancement, every day, new tool are being introduced to improve efficiency. A small business owner must take out the time to identify innovative technologies that save time, money; improves control over key decisions, service delivery and customer support for better customer engagement. After analyzing the latest innovations, he/she must audit the actual business plan from time to time to include the innovations for improving business efficiency and sales revenues.
A small business can make use of multiple techniques like live chat to improve customer delight such as utilizing automated chat bots to help handle queries, customer grievances and getting qualified leads. Also, cloud computing makes it possible for small businesses to improve their processes and provide real-time support to the end-consumer while helping businesses save money on standalone systems.
5. Arrange for business loans to fund growth ambitions
Funding is an important aspect of any business enterprise and when it comes to small business, it is very important to have sufficient funds to manage operations as well as fund growth ambitions in the long run. In order to succeed in a business venture, an entrepreneur must focus on arranging a business loan at a favorable interest rate. When it comes to getting a business loan, it is really important for a business to understand the loan qualification process and prepare to increase the prospects of approval of the small business loan.
A small business might require a short-term loan to take care of merchant cash advances, receivable financing etc. Also, there are several methods to take care of a business’ long-term funding requirements through business loans for small businesses.
6. Develop a clear marketing strategy & web presence
Small businesses are short on marketing budgets. So, a small business owner must be focused on developing a clear strategy for marketing to enable them avoids excessive expenditure. Also, a small business must focus on developing relationships with local journalists, industry experts, business organizations and other stakeholders. A small business must also make use of digital and social media channels for marketing and build a strong web presence that ensures better discovery and improved sales leads to a nominal cost.
According to a study conducted on the ‘benefits and barriers of bringing small businesses online’, using online mediums help small businesses in effectively competing with big names in the industry and also capture market share at a nominal cost when compared to the budgets of big organizations. Also, social media is the preferred mode among small businesses to engage customers online and they are much comfortable to interact with customers on social media than hosting a full-fledged website.
Starting a business is an upheaval task and an entrepreneur has to wear multiple hats while planning for a business. Planning beforehand for a small business makes an entrepreneur better equipped to face challenging hurdles and tackle them easily. By planning and analyzing various aspects optimally, an entrepreneur can avoid downswings and take a business towards the path for sustainable growth.
Sawaram Suthar is head of marketing at Acquire, and also a founder of Jagat Media, a digital marketing agency. A digital marketing consultant, he has experience in things including branding, promotions and page optimization, along with research and strategy. He has an MBA from the University of Pune. Anyone can find him on @sawarams.