When starting any sort of business, it is important to take time and plan out a long-term strategy for success. Only 50% of all small businesses survive 5 years or longer, and the difference between succeeding and failing ultimately comes down to a mix of strategic planning, organization, and some dumb luck.
Below we’ve compiled a list of 7 strategies for building a small business that’s around for the long term.
Our Top 7 Tips for Making it as a Small Business
Building a successful business takes time, planning, and a lot of energy. Follow our list of tips below to ensure you are well-poised for success.
Our top tips include:
- Get organized
- Build your savings account
- Become familiar with your competition
- Create a budget
- Always look for opportunities to diversify your revenue streams
- Never stop marketing
- Invest in yourself
1. Get Organized
The organization is key to building a successful business. You need to be on top of accounting, invoices, payroll, purchase orders, important documents like your business license and EIN, and so much more.
We suggest decluttering your workspace as much as possible, so it’s easier to keep track of paper documents. It can also be helpful to use an online task management tool so you can easily stay on top of due dates, to-do lists, and more.
2. Build Your Savings Account
How you manage your profits can make or break your ability to survive long-term as a small business. It is recommended that small businesses have 3-6 months’ worth of operating expenses saved up to stay afloat in the case of a recession, emergency, or natural ebbs and flows in the market.
Building wealth as a small business, especially a new one, can take a bit of time. To speed up the process, utilize strategies like invoice factoring to ensure you have enough capital to meet your short-term and long-term goals.
3. Become Familiar with Your Competition
Know exactly who your competition is and try to figure out where you can bring value your competitors can’t match. Become familiar with the products, services, and experiences your competition provides so you can better understand opportunities to grow within your local markets.
4. Create A Budget
The purpose of a business spending budget is to determine how much extra money you have every month after paying expenses. Think about fixed expenses (rent, utilities, payroll, vendors) as well as variable and surprise expenses. It is also a good rule of thumb to try and save about 10% of your monthly revenue whenever possible as you’re building your savings account.
Revisit your budget plan a couple of times a year minimum, or whenever you experience significant ebbs and flows in revenue to ensure you aren’t spending more than you have.
Here are some more tips for managing your small business finances.
5. Always Look for Opportunities to Diversify Your Revenue Streams
As a small business, don’t be afraid to try out new things. Creating multiple streams of revenue for yourself means that you won’t put all your eggs in one basket, so to speak, and if one source of revenue starts drying up, you’ll have other sources of income to rely on.
If you’re a brick-and-mortar shop, one no-brainer for diversifying your revenue stream is to have an online shop. This can help supplement sales if in-person sales take a dip. It would be best if you also thought about hosting workshops and events and maybe even adding a subscription service to your roster.
6. Never Stop Marketing
You should constantly be marketing to some degree, whether that’s a newsletter to your best customers, buying targeted ads on social media, or advertising an upcoming sale. Having a solid brand identity and marketing presence will help you build brand recognition and a base of loyal customers to match.
7. Invest Back into Your Business
After you’ve built sufficient savings, it is important to start investing in the growth of your business. Think about ways to improve and develop your processes to build a more efficient, more profitable structure.
Investing in yourself can mean hiring a new employee, paying off debt, buying technology to streamline or automate workflows, or trying out a new vendor, product, or service– anything that will serve to make your business more profitable and sustainable down the line.
The Bottom Line
While maintaining a healthy small business for the long-term can seem like a lofty goal, it is absolutely doable. Be sure to implement all the strategies listed above for your best chance at success.
Have more tips? Feel free to share your thoughts in the comments below!