To start a business, it takes more than just a good idea
To build a successful company, it takes more than just a good – or even a very good – idea. You have to be well organised, flexible, creative and be able to pay attention to details without losing sight of the big picture. You must also be prepared to make some personal sacrifices. Regardless of the type of business you are considering, these nine basic tips, with links to more tips, can help you start and grow a business.
- get organised
To succeed as an entrepreneur, you must first be well organised. This will help you to complete tasks efficiently and keep track of the many things that need to be done. An easy way to get organised is to make a daily to-do list. When you have completed a task, cross it off the list. Also remember that some tasks are more important than others. Take care of those with the highest priority first.
There are many online resources that can help you do this. These include tools such as Slack, Asana, Zoom and Microsoft Teams. However, a simple Excel spreadsheet is sufficient for many organisational needs of a small business, especially in the early days.
- keep detailed records
Regardless of how busy they are, successful companies take the time to keep meticulous records. This way, they know how the company’s finances are going and can often anticipate potential challenges better (and earlier). Investopedia regularly reviews the best accounting software for small businesses.
Many companies today keep two types of records: one physical and one in the cloud. This way, the business owner no longer has to worry about losing important data in the event of unfortunate events such as fire, computer virus or other disasters.
- analysing the competition
To be successful, you cannot afford to ignore your competitors. Instead, take the time to study them and learn from them. Large companies spend considerable resources to obtain this kind of information about their competitors.
The way you analyse your competition depends on the nature of your business. If you own a restaurant or shop, you might simply eat or shop at a competitor, ask customers what they like or dislike and gather information that way.
If you operate in an industry where you have limited access to the inner workings of your competitors, such as manufacturing, you should try to follow the news in trade journals, talk to customers you have in common, and obtain and review any financial information published by a competitor.
- Understand the risks and rewards
Another key to success is taking calculated risks to grow your business. A good question to ask yourself, in addition to considering the potential rewards if you succeed, is: “What is the downside if it doesn’t work?” If you can answer this question, you know what the worst-case scenario is. If you can live with this scenario and are willing to take the necessary steps to minimise the risk as much as possible, you might give it a try. If not, it would be a good time to consider other options.
Understanding risks and opportunities also includes intelligent timing for starting a business or launching a new product. For example, the severe economic disruption during the COVID pandemic opened up new opportunities for some businesses (e.g. the production and sale of protective clothing), while others encountered obstacles that were difficult to overcome (e.g. running a restaurant with in-house catering restrictions).
- be creative
Always look for ways to improve your business and distinguish it from the competition. Realise that you do not know everything and be open to new ideas and different approaches.
Look for opportunities to expand your current business or to develop related activities that generate additional revenue and offer the advantage of diversification. The story of Amazon is a good example of this. The company, which started as an online book retailer, has grown into an e-commerce giant that sells practically everything. Today, it also has a growing presence in retail. Its many subsidiaries include Amazon Pharmacy, Amazon MGM Studios, Whole Foods Market and Zappos.
- stay focused on your goals
The old adage “Rome wasn’t built in a day” also applies to building a business. Just because you open a business does not mean you will make money right away. It takes time for people to know who you are and what you have to offer, so focus on achieving your goals.
Even many successful small business owners will not make a profit for a few years and will have to rely on loans (if they can get them) or their own savings to sustain the business until it becomes profitable. Fortunately, there are several ways to finance a business.
However, if the business is not making a profit after a reasonable period of time, it is worth checking the reasons for this and whether the business should take a different direction.
- provide excellent customer service
Too many companies forget the importance of good customer service. If you offer your customers better service, they will be more likely to turn to you the next time they need something than to your competitors. High-quality service is the key to competitive advantage in the marketplace.
Some companies refer to this approach as consumer- or customer-centered.
In reality, in today’s competitive business environment, service is often the key differentiator between successful and unsuccessful companies. This is where the adage “undersell and overdeliver” comes in, which smart business owners do well to follow.
- be consistent.
Consistency is a key component to success in business. You must do what is necessary for your success day in and day out. This is how you create long-term positive habits that will help you make money in the long run and have satisfied customers from day one. Customers also appreciate consistency.
- be prepared to make some sacrifices
When you start your own business, you often have to invest more time than if you worked for someone else. This can mean that you may spend less time with your family and friends than you would like. The adage that there are no weekends or vacations for entrepreneurs applies to anyone who wants to succeed in their business.
Owning a business is not for everyone. If, after an honest self-assessment, you come to the conclusion that you are not cut out for it, you will save yourself a lot of trouble and probably a lot of money by choosing another career path.
What is the fastest way to grow a business?
Businesses grow at their own pace, and in many cases this is out of the control of the owner or employees. However, there are some aspects of lean management that can help a company grow quickly, such as focusing on a small product line, scaling at a manageable pace, and creating a clear advantage over the competition.
How can sales be increased?
Increasing sales can start at several points. You can increase advertising spend where advertising has already proven effective, proactively solicit referrals from existing customers, build an e-mail list for direct customers, and more. You can also expand your product portfolio, but if new products are not successful, the impact will be negative.
What makes a startup successful?
Business success is difficult to quantify, but when it comes to generating returns for stakeholders, startups can be a great way to generate returns. The best startups have a good product or service that is scalable. A well-run startup understands the overall market and its place in it, is able to reorient itself quickly, and is ready to take advantage of opportunities when they arise.
Building a successful business is hard work and not everyone succeeds. According to the U.S. Bureau of Labor Statistics in 2022, about 20 percent of new businesses fail in the first year, 50 percent in the first five years, and 65 percent in the first 10 years. Only 25% of new businesses make it to 15 years or more.
If you want to be part of that 25 percent, following these nine tips is a good start, but certainly not exhaustive. To own and operate a successful business, you must constantly learn and adapt.