Tips for Small Business Success
Small business success truly is the backbone of the American economy. Half of the U.S. labor force either owns a small business or works for one. Small business has created 64 percent of all the new jobs in the past 15 years, and two out of every three new job openings are created by small businesses.
Subsequently, it is important for small businesses to have all the information necessary to thrive, especially in this difficult economy. Here are nine top tips for keeping your business solvent and prosperous in the years to come, and to achieve incredible small business success.
1. Offer a Great Product
Your product is the number one reason customers do business with you, and the primary reason they come back for more. While there are many ways to cut back on expenses, such as streamlining processes or automating certain parts of the process, the value of the product you offer should never suffer from cost cutting. If customers feel like they get a good value for the money they spend on your products or services, they’ll come back for more. Never issue a product you aren’t completely proud of as it is a key to small business success.
Also, don’t sacrifice product quality for a quick launch. If you rush the release of a product because you want the revenue, you’re almost guaranteed to end up with a half-baked product. Remember Windows Vista? Microsoft pushed it too soon, and Apple profited off of this mistake.
2. Provide Stellar Customer Service
Big business has killed the concept of good customer service. Customers become frustrated when they need answers or assistance and can’t get anyone from the company to listen to them or help them. Good customer service means that customers have a positive experience with your company from the moment they respond to your ad efforts until they have their product and it’s working properly. Whether you’re a one-person shop or a team of 50, always demand that your business treats its customers right.
Take a page out of Tony Hsieh, founder of Zappo’s, book and blow your customers away with customer service that lets them know they are special to your business. Try to follow Zappo’s example of customer service, even if it means accepting returns 365 days a year and sending your customers flowers.
3. Stay Financially Sound
Bloomberg recently reported that 80 percent of businesses fail in the first 18 months. The number one contributor behind this startling statistic is not having enough capital to sustain the business. With a lack of good money management, running out of capital is inevitable. Taking out loans to fund expansion projects, hiring too many employees too soon, or investing in property that isn’t worth what you paid for it are all potential pitfalls that can cause your business to suffer financially.
Unfortunately, the stress of financial problems on a small business tends to trickle down into poor product quality and bad customer service, which tanks a business fast. Learn to make good investments and manage the money wisely to avoid these problems.
4. Know What Your Brand Is, and Protect It
Your brand identity is more than just your logo. Brand identity is the sum of the public’s perceptions of you as a company. It includes your logo, your advertising messages, your products or services, and all the experiences customers or the public have about your company.
Protect your brand identity by assuring that these aspects tell the public a consistent message. Define why you’re different from your competitors, and make this clear in all your messaging efforts, from advertising to sales to customer service. Outreach services, such as sponsoring community events, is another great way to build and nurture a good brand identity.
5. Make Good Decisions about Protecting Your Business and Assets
When you operate as a sole proprietorship, all of your personal assets are tied into the business. If the business goes under or you get sued, your personal assets are open to judgments against the business. Investing in business insurance helps, but doesn’t prevent all possible problems associated with litigation. Consider converting the business to an LLC (Limited Liability Company) to protect your personal property from legal issues related to the business.
6. Review and Revise Your Business Plan Regularly
Before you started the business, you should have developed a business plan. It’s usually necessary for financing and certain regulatory compliance issues. Don’t stash your business plan in a back drawer and forget about it once the business is operational. Review this plan every six months to one year, and revise it as necessary. This plan helps keep you focused on the goals and priorities you had when starting the business.
7. Get Everything in Writing
In this age of litigation, handshake deals aren’t the way people do business anymore. You’ll need to write up a signed contract anytime you do business with any other person or business. This includes issuing receipts for purchases, no matter how small, and getting contracts signed with suppliers and vendors. When it’s in writing, both parties know what’s expected of them. Plus, you’ll have legal recourse and protection if someone tries to change the scope of the agreement.
8. Learn How to Hire and Train Workers Properly
Most small businesses eventually grow to the point of needing more workers. This means navigating the murky waters of hiring and training employees. Begin by determining if the position should be for a full-time employee or a contract worker. Second, get the necessary paperwork from the IRS to issue the workers W-2 forms or 1099 forms as necessary.
After the legalities of hiring are in order, it’s time to make sure the employees are able to keep up your quality level in terms of products or services, as well as customer service. Good training is essential for employees to maintain the brand identity you’ve established.
This is another area where you can follow the advice of Tony Hsieh by developing a set of core values and a company culture, ensuring employees are happy to go to work and will stand behind your business. It’s important to hire carefully and provide good training, but fostering a positive work environment will increase employee happiness and reduce turnover.
9. Stay on Top of Your Taxes
In 2013, the IRS began actively targeting small businesses across the country. Although they described it as a “second look” and not auditing, many business owners felt singled out and threatened. This might be the beginning of a trend with the IRS, so it’s important to make sure all of your tax information is accurate.
One of the greatest pitfalls for small business owners is falling behind on their taxes. You’ll have to save enough of your income to cover self-employment taxes as well as federal income taxes and the taxes you owe for employees. The easiest way to assure that these tax obligations don’t get the best of you is to file quarterly estimated tax payments.
As a general rule, save about 20 percent of your income for self-employment tax. Also, keep up with any sales taxes or other regulatory obligations according to the industry you’re in. A certified CPA can help you determine how much to save and pay quarterly.
Business Success Wrap Up
By making wise decisions, small business owners can continue to boost the economy with more jobs and revenue. Avoid common pitfalls and stay ahead of problems before they become an obstacle for your business to overcome and achieve business success. With an estimated $5.5 billion in annual revenue generated in the U.S. economy from small business, there’s a lot riding on your shoulders.