We all launch our small business full of optimism that it will be a raging success.
However, for over 60% of Australian start-ups, the sober reality is that their new venture will fail within the first five years of launching.
Although this is a damning statistic, it is one that also offers some hope. By definition, two in every five new businesses in Australia do go on to become profitable and sustainable.
So the question is how do they do that?
While there is no definitive answer (if there was, we’d all be successful business owners), there are some things you can do to make your company more prosperous.
With that in mind, here are some of the keys to success when starting a small business in Australia.
Follow these tips, and your company should remain well and truly in the black.
1. Write a business plan
Most successful and well-established small businesses started out with a well-thought-out plan.
The importance of a properly developed business plan can’t be over-emphasised as it outlines your predicted pathway to success.
This plan should be specific yet concise and also map out the future growth of your business over the next five years. It should also identify the goals and targets you want to achieve. As well as strategies for how you can meet them.
A well-written plan is also important, as it can help you to procure a loan from angel investors, your bank or other financial institutions. By flagging potential risks and challenges and highlighting areas of opportunity, it will also help you to make clear and informed decisions.
When devising the plan, it is a good idea to enlist the help of a seasoned expert. However, if this is not something you are able to fund, then you might want to follow this very good business plan guide.
2. Provide a great product or service
It is a no-brainer. But to stay in business, you have to offer a great product or service.
Every business relies on repeat customers. But even if you have the slickest, most successful marketing function in your niche, your business won’t be sustainable if what you offer does not surpass or at the very least, meet your customer or client’s expectations.
Pay close attention to whether the products and services you offer provide a solution to their problem or fulfil an issue they have.
At the end of the day, most successful small businesses offer something which meets the needs of their customer base.
Having achieved that, they automatically turn them into brand ambassadors who promote the business to others through word of mouth.
3. Organisation is key
When you are a business owner you will find yourself spinning a lot of plates at the same time.
Whether that be paying bills, buying new stock, managing staff, devising new marketing campaigns or trying to balance the books, you’ve got plenty to think about.
For this reason, being organised is a crucial skill as it enables you to be productive, more in control and less stressed.
It is a good idea to write a to-do list, which outlines everything you need to do over the course of a day, week and month.
It is also a good idea to outsource and automate as many processes as possible to ensure you keep up with all the aspects of managing your operation.
4. Keep detailed records
It might not be the sexiest side of running a business, but keeping detailed records is something most successful small businesses do.
Ensuring your accounting and booking are up to date will help you always understand the position your business is in. Certainly in financial terms at least.
This, in turn, can prevent you from experiencing a major decline and reduce your chances of having to fold.
Programmes like Quickbooks can help you perform your accounting duties quickly and efficiently. It is also cloud-based, so you can access the information anywhere, anytime for reference if need be.
5. Market yourself properly
We’ve previously mentioned how important having excellent products and services is. However, it is equally important to let as many people as possible know about what you offer as well.
After all, you could provide a solution to a common issue many people have. But if they are not aware of it, they will either have to keep on suffering or find the answer elsewhere.
When defining your brand and promoting your business, it is crucial to know who your customers are and how they are best marketed to. You should also use as many different promotional activities as you can. Particularly the likes of email marketing, social media and PR. All of which can be free or relatively inexpensive to run.
It should also take into account the budget you have available, as well as all elements of the promotional mix i.e. price, product, place and promotion.
When promoting your business, it is crucial to know who your customers are and how they are best marketed to. You should also use as many different promotional activities as you can. Particularly the likes of email marketing, social media and PR. All of which can be free or relatively inexpensive to run.
If you adopt paid advertising as a strategy, be prepared to constantly monitor and modify which campaigns bring in sales and which ones do not.
6. Keep reducing your overheads
It goes without saying that all businesses need to constantly reduce their overheads.
For any company, but especially a small owner-operated venture, the more you spend, the more money you will need to make to become profitable.
In the initial stages of launching a business, it is very easy to drive up your operating costs. The likes of rent, utility bills, insurance, stock, marketing function and equipment hire or loan can quickly add up. So it is always good to be on the lookout for cheaper ways of running your business.
This can include changing premises or electricity and insurance providers. It can also involve finding cheaper suppliers or renegotiating your prices with existing ones. You should always look to reduce your unsuccessful marketing spending as well.
In short, one of your key roles should be to regularly evaluate ways to cut costs.
7. Cash flow management
Along with cutting costs, it is important that your business has a very good cash flow.
Even if your new business starts off with a healthy bank balance, it will be difficult for your company to be sustainable if your cash flow is negative.
Eventually, you will find yourself struggling to pay invoices, taxes, bills and maybe even your staff. So it is important to create as positive cash flow as possible. To further assist with this, many businesses like to use the Smartpy credit card reader to help with surcharge and increase savings on transactions.
This streamlines their processes for payments and ensures they get their money much quicker than they otherwise would if they were waiting for EFT payments or cheques to clear.
It also saves many businesses the hassle of having to deposit the day’s cash sales into the bank. Which in turn can take up a significant amount of time that could be better spent elsewhere on your business.
8. Learn from your competitors
The chances of nobody else offering similar products or services as you do is minimal. So you will be competing against other companies, either within your immediate region or nationally.
While many small businesses are afraid of competition, it should be seen as a real opportunity to improve your own offering.
Your competitors will do some things well and other things not so well. So it is important to establish what these are and try and learn from and better them.
Some of the things to consider are what is their USP? How do they promote themselves and what do they say? Where do they market themselves? What are their prices? What do their customers say in terms of online reviews?
This will give you plenty of intel to work with, which can be used throughout your business operations and marketing function.
For instance, if you ascertain that one of your competitors has received bad reviews about their customer service, then make sure you become known for excellent customer service.
9. Focus on outstanding customer service
Talking of which. One of your critical success factors should be providing your clients or customers with outstanding service.
Most successful companies have realised that they need to put their customers first, above and beyond anything.
So make it a priority to look after the needs of your customers.
Be sure to answer all of their enquiries as quickly as you can and always provide them with clear and concise communication.
It is imperative as well to do what you say you will do within any timeframes mentioned. And, of course, you should be professional, friendly and respectful in all your dealings with them.
At the end of the day, it is cheaper to keep a client than to procure a new one. So treat every customer you have like royalty.
10. Hire the right people
While many small businesses are run by solopreneurs, there comes a time when you need to enlist help.
When this time comes, it is important for you to hire the right people. Put simply, good people can bring new creative vision, enthusiasm, expertise and skills to your business.
Bad people can ruin your brand name and let the standards you have worked so hard to put in place decline.
It is important to hire wisely, and once you have, give your employees every chance of being a success. Train them properly and invest in their talents. Be sure to empower them to make decisions for the good of your business too.
At the end of the day, the more you create a culture of engaged and committed staff, the more your business will grow and the better reputation it will have.
