Whether you’re a new small business owner or a seasoned entrepreneur, it’s important to have your basics well covered if you hope to have success.
First, you need to know what that success will look like and have, not just a plan to get there, but metrics by which to measure your progress. You need to understand how your product or service fits into the marketplace and how you can clearly articulate that position to your potential customers. And finally, you have to understand both how you will get paid today and how you will get paid tomorrow.
In short, these are the key things I believe every small business owner must have in place in order to have a successful 2017:
1. Business plan
Every business needs a business plan. It doesn’t have to be formal or in a particular format (if you’re not seeking outside funding) but every business should have a plan for what you hope to achieve, and how you will achieve it in the next 12 months. It should be written out and clearly communicated to all the important players in the business.
You also need milestones and metrics to measure your success. If you don’t have a map, how will you know if you’re headed in the right direction? For example, if you want to add 1,000 new users to your product this year, what does that look like on average per month/per week/per day?
Key takeaway: Take the time to get all of your plans out of your head and on to paper. Set some concrete goals for the next 12 months and define the metrics by which you will measure your success.
2. Clear customer value proposition
It’s mind-boggling how many businesses I encounter that can’t concisely explain how they are different from or better than their competition. The cold truth is – if you can’t articulate why your customers should choose you, they won’t.
A value proposition is not just the value you intend to deliver, but also your customers’ belief about how that value will be delivered, experienced and acquired.
Key takeaway: Get exceptionally clear on your value proposition by filling out this statement:
For (target customer) who (need statement), the (product/brand name) is a (product category) that (key benefit statement/compelling reason to buy). Unlike (primary competitor alternatives), (product/brand name) (primary differentiation statement).
3. Competitor analysis
Many businesses believe they are too small to need to invest in any kind of strategic analysis, but I say you are never too small to know what your competitors are doing. This sort of analysis doesn’t have to be an expensive big data project, as you can conduct it simply with Google and a curious disposition.
You might begin by asking:
- who are my most direct competitors?
- what results do their products promise?
- what words and emotional triggers are they using to sell their products?
- how much do they cost?
- how are their products/services delivered?
- what bonuses have they thrown in to sweeten the package?
- how are they promoting themselves?
As you begin to answer these questions you will begin to see how your value proposition (see above) fits into the conversation — or, perhaps, where you need to shift your value or message.
Key Takeaway: Every business should conduct some level of competitor analysis, and the more you know about your competition, the better you can position yourself as different.
4. Positive cash flow
Cash is king in business, and for good reason. You can’t pay your bills or your employees with your orders book. It is vital that any small business has a plan for how they will get paid and in a timely manner. Even the most successful businesses can find themselves in trouble if their money is all tied up in unpaid invoices.
Don’t get caught up in what you think is common practice or industry standard; that doesn’t mean those things are right for you or your company. Can you get paid in advance or at least get a deposit? Do you have to offer Net 15 or Net 30? [invoice to be paid within 15 or 30 days]. Can you accept credit cards to help your customers with their cash flow?
Key Takeaway: Devise a strategy that will make it easy to get paid promptly, no matter who you work with. And then be careful not to extend yourself beyond your liquid cash limits.
5. Strong marketing plan
I see this happen far too often – a small business has a record-breaking month of sales, or lands one or two really big accounts and, as a result, they neglect their marketing efforts. Suddenly, the next month rolls around, or one of those big accounts disappears, and they are in dire straits, struggling to make ends meet.
The problem is that these businesses have a tendency to focus on marketing only in lean times, when they need the business. The fix is to create a marketing plan that allows you to always be marketing yourself and to cultivate a diverse customer base so that you won’t be left high and dry in lean times.
Key Takeaway: Do some research into which one or two marketing platforms will be the most beneficial for your particular business and commit to them. For example, you might try social media marketing, content marketing, in-person networking, direct mail, or paid advertising. Don’t overextend yourself trying to do everything at once.
This isn’t everything a business needs of course, and your needs may vary by your niche or industry, but this is a solid foundation on which to base a successful business.
What would you add to this list? I’d be curious to hear your thoughts and add your wisdom to the conversation in the comments below.
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