The small percentage of entrepreneurs who succeed know this: If your business is going to succeed, you must focus on constant improvements. Small incremental changes in your business are the key to succeeding in business.
Following are three key areas every business should focus on:
1. Customer Acquisition
Getting new customers is tough for most businesses. Getting new customers profitably is even tougher.
Consider the following as you try to improve your customer acquisition:
- Is your service or product excellent quality? No amount of marketing can make up for a poor quality product.
- Is there a large enough market for your service? You might have the best service in the world, but if the marketing is too small, your business will fail.
- Can you offer your service at a competitive cost? Setting the right price is both art and science. The best way to figure out pricing is by watching your competition and experimenting with different prices.
- Have you defined your target market? Who are your current customers? Also, consider your best customers. Ask yourself, “Who are the best customers?”
- What is your referral strategy? It is important to ask for referrals. Don’t assume that happy customers will automatically refer your business. Ask for referrals, regularly.
- Are you asking for testimonials? Customers want to know that people are happy with your service, so ask for testimonials.
2. Cash Flow
Trying to run a business without cash is like driving a car without fuel. Your business can’t survive without cash.
Think of the following as you improve your cash flow:
- Understand how much cash your business needs each month to succeed.
- Seek profits, and focus less on revenue. Revenue is important but it doesn’t tell you the whole picture. Ultimately, a profitable business is a successful business.
- Save your cash. You need to have cash reserves to get through tough times.
- Get paid fast. Offer incentives to customers who pay fast. Fire slow paying customers.
- Ask for net-30 or net-60 payment terms to help you hang onto cash longer.
- Use an accounting software to help you with cash flow. Set alerts to stay on top of your cash flow.
Managing a small business is a huge challenge. Entrepreneurs often find themselves working in the business instead of working on the business.
If your business will succeed, you will have found a way to create systems. Systems will help you create processes and procedures. Systems help you hire and train people faster. Systems will also enable you to remove yourself from the daily operations. Systems will help you delegate.
You can better manage your business by the following:
- Focus on consistency. Consistent quality of product and customer service is the key to succeed.
- Run your business by systems. Don’t allow team members to change your systems without your approval.
- Don’t hire your friends. It might be the easiest to hire a friend, but most likely, your friend is not the best person for the job. Instead of gaining a new employee, you will lose a friend.
- If you have hired the wrong person, let him or her go fast. The wrong employee damages your business. A poorly performing employee also reduces the performance of the rest of your team.
To take your business to the next level, constantly improve your customer acquisition, cash flow, and management.