Your objective as a small business owner is to set yourself up for long-term success. Achieving this goal is easier said than done. Every day there’s news of new events disrupting the market and lists of things you “must” do to succeed immediately.
While the top small business trends to follow will bring you success, these short-term trends don’t always align well with your long-term vision. The trick is to blend the trends with your long-term success pillars to create a business that stands the test of time.
Here are x long-term success pillars that all small business owners must adhere to if they wish to leverage short-term trends and create a successful company.
Businesses are measured using net income. However, as a small business owner, you know that cash is the true measure of success. The cash you have on hand determines the line between success and bankruptcy. Many novice owners forget this key point and prioritize other tasks such as reducing expenses and boosting sales.
While these aims are great, they don’t address issues such as covering cash flow holes or working capital needs. For instance, you can increase sales, but if you spend that money on more marketing, your working capital needs are left unaddressed.
Prioritize cash flow at all times. More importantly, leave some cash lying in the bank when tough times hit. The only constant in a small business is change, and you never know where the next crisis will come from.
For example, the COVID pandemic exposed many small businesses to conditions they could not overcome. How many small business owners would have given up the prior year’s profits in exchange for some cash to address expenses?
It’s good practice to leave cash in the bank equivalent to at least 6 months to a year’s worth of expenses. This will give you leverage when you seek financing in tough times. More importantly, this cash gives you the freedom to take risks in your business investments.
You’ll know that even if the new investment does not pay off, you can lean on cash in the bank to maintain smooth operations.
Employee turnover costs are expensive. They’re also a hidden charge that is tough to quantify. Recruiting is time-consuming, and you must vet prospective hires for their long-term commitment to your business. If you find someone who is talented, but non-committal, bring them on board as a contractor to reduce your turnover costs.
When hiring, make your process as seamless as possible. Thanks to remote work and technology, you can hire people from any part of the globe. Leverage this to your advantage. Need someone to maintain your books? Hire someone online who can do the job for low costs.
Need someone to design your website? Hire an agency online that can do a great job and deliver your designs on time. There are many ways to structure your workforce, so conduct research into what works best. Hiring a staff full of contractors might not be the best way forward since you’ll face possible disruptions when they move on.
Decide which roles are critical and hire full-time employees for those roles. Pay them what they’re worth, and you’ll ensure they remain loyal to you. Use technology to create work environments that suit their needs, and they’ll deliver outstanding work all the time.
Many small business owners view their employees as cost centers, and this is a huge mistake. Instead, view salaries and hiring costs as capital expenditures. Your workforce is your biggest asset, and you must leverage it to attract customers.
So invest in your people, and you’ll reap the rewards.
No matter how old-school your product is, technology has a role to play in your sales and marketing processes. Customers prefer shopping online these days, and you must design sales channels that adapt to their needs. For instance, you must own a website and have a customer service team, at a minimum.
The great thing about technology is that you can sell to customers worldwide. You can run a 24/7 business that addresses customer needs and earns money while you sleep. The trick is to design systems and processes that address these needs while you’re away.
To install these processes, you must trust your workforce and automate as much as possible. For instance, you can install a chatbot on your website to gather customer queries and answer basic product questions. Any complex questions can be redirected to a human and answered once you’re online.
This way, you’ll communicate effectively with your customers and keep them coming back. Automation in the back office helps immensely too. You can connect your website’s CRM to an accounting platform that will pull sales data and classify them into journal entries.
All you’ll have to do is hire a CPA during tax season to vet your accounts. You’ll save on the costs associated with hiring an accountant full-time, leading to a lean and focused workforce.
Challenging but Rewarding
Running a small business is not for the faint of heart. The key to success is blending the pursuit of short term trends from a stable base that prioritizes long-term success.