Around 50% of small businesses fail within five years, which shows not everyone has what it takes to run a successful company.
Understanding what makes a business profitable is key to standing out from competitors and lasting years. But, if you dive in with no research, you could end up missing out on your dream. Maybe that’s why you’re here; you’re unsure how to run a successful business and need a nudge in the right direction.
Sounds like you? Luckily, you’ve come to the right place. Here’s what the most profitable small businesses have in common.
In this article
Successful businesses are run by someone confident. You can only thrive if you believe in your product or valuable service and your ability to sell it successfully.
With this in mind, business owners must have high self-esteem, especially when running a team, so that employees take them seriously.
The only way to create a recurring income is by being action-oriented. Business owners adapt to trends and work quickly to launch a product or campaign before their competitors do.
Small businesses must have a clear strategy on how to run their business and become an expert in their industry. If you don’t have one, write a vision statement about what your company offers clients and how it will help their lives.
You should also have a strong business development strategy that details how you’ll undermine your competitors, whether it’s with a robust marketing strategy or focusing on brand recognition. When you have this in place, figure out how to reach your target audience.
If you need help with this area of your business, find a reputable agency to help you. You can check them out here.
You Have Goals
Like with any venture, you should have long- and short-term goals.
A bonus is that this will make running a business feel less daunting. For instance, a short-term goal could be growing your Instagram following. On the flip side, a common long-term goal is to increase sales in the next quarter.
You Are Humble
Regardless of how successful your business is, you should always be humble. You must seek help when necessary and own up if you make a mistake.
If you have employees, appreciate that their input has helped your business boom.
Customers Find You
A major sign that you’re running a successful business is if customers easily find you. If you’ve noticed new e-mail subscribers or repeat clients without cold calling, you’re on the right track.
This is because a customer investing in your company shows you’re making an impact.
…And Keep Coming Back
Generally, if you can keep 20 to 30% of customers coming back, your business should succeed. Known as repeat customers, these clients stay loyal to your brands and products, which gives you a cushion. It also increases the chances of referrals.
Successful small businesses have customers who refer your company to a friend or family member. As a result, you see more footfall in your store without any extra effort.
You Focus on the Customer Experience
Businesses know that focusing on customer experience comes with huge benefits, such as increasing customer loyalty and satisfaction.
When done right, a great customer experience promises word-of-mouth marketing and positive reviews, which can result in more customers.
You Always Seek New Customers
Regardless of how many repeat customers you have, you must always look for new ones. Note, this is the most challenging aspect for businesses and it requires a huge amount of discipline.
Because of this, you should focus on your marketing strategy and generating leads.
You Are Willing to Fail
You can’t get into business unless you’re willing to fail. Accept that you’ll face difficult situations and must flex your creativity to get out of them. You should also understand that your ideas won’t always work and there’s no shame in that.
Instead, work with your team to figure out how to move forward.
You Bounce Back
Every business faces obstacles, but it’s how you bounce back that determines how successful your company is. As a business owner, you must be savvy and brainstorm creative ways to combat a slump in growth.
For instance, you could post a different style of content or invest in radio commercials instead.
Further, you’ll notice that thriving businesses never give up because it’s not in their nature. Instead, they suffer a loss and have the confidence to move forward.
Your Small Business Is Future-Proof
No one knows what the future holds, which is why businesses strive to make theirs future-proof. This means that it will survive, even when new technology emerges or the industry changes.
Although it’s nearly impossible to predict, you should constantly explore trends in technology and human behavior to get valuable insight.
You’re Always Recruiting
Businesses succeed when their team is passionate about the industry and has a deep knowledge of the product or service. Always look for new hires who can develop your business and offer a new perspective on how you’re running the company. It also means you can focus on areas of your business that need extra attention.
Leaders should find ways to cut the employee turnover rate. This refers to how often you must replace team members because it will impact your company’s productivity levels. It also shows that employees aren’t passionate or engaged with your company, which could show deeper issues.
If you’re struggling with this, there are several steps to take. For instance, celebrate small wins and put the spotlight on an employee who deserves it. This simple act shows you appreciate the team and they’ll return the favor by staying longer.
You Know How to Collaborate and Delegate
Small business owners hire leaders who understand how to collaborate and delegate.
Although it’s difficult to give up control, working with others lets you tap into a reservoir of knowledge you likely don’t have. It also increases the chances of running a successful business because you get many perspectives. Successful business owners understand when to lead and delegate tasks to the most qualified.
Delegating also lets you boost company morale and cultivate a culture where everyone helps one another to succeed.
Reputable business owners hone their organizational skills because their company depends on them. At the very least, you should track goals, inventory, and to-do lists so you don’t experience any issues. A useful tip is to use software to automate the job and reduce the risk of human error.
Or, if you have the funds, hire an employee to oversee organizational aspects of the job.
You Have Good Decision-Making Skills
You’ll notice that successful business owners have incredible decision-making skills. Acting too quickly or slowly can destroy a business’s reputation and earnings. Because of this, entrepreneurs must know when to act to avoid further complications.
If you’re struggling with your decision-making skills, there are steps to take. First, if you’re stressed, calm down and approach the problem with a clear head. It’s wise to go for a long walk or chat with a friend so that you don’t make any rash decisions that could harm the business.
Next, take a step back to understand the full picture. You may have overlooked the data or aren’t able to evaluate the entire situation. It’s also wise to ask someone on your team for their advice so that there aren’t any blind spots.
Your Professional Network Is Constantly Growing
It’s no surprise that networking is the key to running a successful business. Professional networking comes with an array of advantages, from letting you exchange ideas to finding new collaborators. Businesses should also network to increase their client base and prove that they’re an expert in the industry.
But this can feel overwhelming if you haven’t networked before.
To get started, attend trade shows in your area. They are a great opportunity to promote your business and get leads. It also lets you practice your elevator pitch and scope out your competition to see how they’re reaching clients.
Further, businesses should attend industry events. You can join an expert panel or become a keynote speaker, as it will strengthen your relationship with consumers.
You Are Disciplined
Another common trait in entrepreneurs is being disciplined. Successful business owners are experts in time management and aren’t afraid to put in the hard work, even if they don’t initially see results.
Plus, entrepreneurs aren’t afraid to tackle difficult tasks and push themselves out of their comfort zone.
Your Business Is Scalable
Fact: every successful business is scalable.
Find bottlenecks that are holding your business back. For instance, it could be not using automation or only having a single supplier that could fall through. Savvy businesspeople find ways to slash costs and create bigger profit margins so that they continue to thrive.
You Have Imitators
Literary legend Oscar Wilde said, “Imitation is the sincerest form of flattery,” and this proverb still stands.
Although it can feel frustrating, it shows that your good idea is turning heads. And, of course, no one wants to imitate a product or service that is doomed to fail, which should give you peace of mind. The key is to double down on what you’re doing and prove that you’re the expert.
You Have a Positive Cash Flow
Sure, it sounds obvious, but you’d be surprised at how many small businesses have debt.
Successful businesses focus on minimizing costs and maximizing profits wherever possible. If you’re struggling with finances, it’s wise to hire an accountant to get an overview of your funds.
You’re Fully Committed
Running a thriving business is a full-time job, which explains why entrepreneurs put in the hours. Be prepared to experience the lows and highs of owning a business so that you’re constantly growing.
You should also always be seeking inspiration and creating ways of standing out from competitors.
You Are Always Flexible
If you want your business to be profitable, you must be flexible. If you notice a particular strategy isn’t working, don’t be afraid to take a new approach.
You should also open yourself up to creative solutions to solve the problem, even if it’s a new concept.
You Invest Back into Your Business
Reputable entrepreneurs use their money wisely. This means funneling surplus cash back into their business whenever possible.
Instead, you can use the money to create a robust marketing strategy or hire professional product photographers.
You Get Out of the Office
Although focusing on your business is paramount, business owners know when to take time off. Spend at least one day of the week offline so that you’re not constantly checking e-mails or social media. Instead, use this time to seek inspiration by meeting people and trying new experiences instead.
It’s also a good idea to take care of yourself. Focus on eating a balanced diet and getting plenty of exercise to stay mentally and physically fit. And, if you haven’t already, schedule breaks during your workday so that you stay focused and maintain your productivity.
What the Most Profitable Small Businesses Have in Common
Hopefully, you’ll use these tips to land a spot on the list of the most profitable small businesses in your industry.
There are many common traits that successful businesses have, such as being action-orientated and being willing to fail. Reputable entrepreneurs also invest surplus cash into their businesses and know when to collaborate with their team members.
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