As more and more people join the ranks of entrepreneurship, more and more information comes available about the right way to drive the success of your startup. The SBA offers a list of factors common among successful startups, such as “has employees” and “knowledge of the business.” The Inc. 5000 fastest-growing companies article offers other interesting statistics about the various factors that drive the success of these ventures. At the end of the day, any and all business success can be boiled down to three keys – Planning, Marketing, and Financial Management.
Planning does not mean simply filling in the blanks of a ready-made business plan template or worse, buying a completed business plan for your type of business. Good planning should result in a virtual roadmap of your business idea and include every detail of how, when, where, and to whom you will sell your product. In order to create this depth of planning, you need a thorough understanding of your product and industry, your area’s legal requirements, your target market, and the available avenues for marketing to your most likely customers. You need to develop an accurate assessment of your sales and expenses and how they will be affected by changes in other factors. You need a general idea of where you want your business to be in the long-term, and plans that are flexible enough to respond to the rapid changes in today’s marketplace.
Planning doesn’t end once your business is up and running, but is a continuous process that keeps your business on track and alert to opportunities as they arise. All planning should include clear objectives – goals that are specific, measurable, and achievable – with set deadlines for completion. As objectives are met (or not), the results should be evaluated and lessons learned from these efforts should be incorporated into future objectives. Consider using a 90-day planning strategy, where objectives are set and completed within a 90-day timeframe. The shorter time encourages more realistic goal-setting while providing for the flexibility needed for small businesses to grow and thrive in an ever-changing marketplace.
Marketing your business efficiently is absolutely critical for all new businesses, but is often neglected by first-time entrepreneurs. It is not enough to place an ad in the Yellow Pages and post a simple website. Search-engine optimization is a critical marketing tool, but one that tends to intimidate non-tech-savvy business owners. In reality, SEO is not difficult and much can be done for free with just a few hours of computer work per week. In addition to online marketing, a combination of the five classic marketing elements (advertising, sales promotions, public relations, personal sales, and direct marketing) also must be incorporated into a successful marketing plan.
Your marketing efforts must be carefully researched and evaluated to ensure you are getting the best return for your marketing dollar. Marketing is how you drive customers to your product and keep them coming back – it is not a business factor to be taken lightly. Take the time to learn and understand all you can and use the right tools to ensure your marketing plan is complete, workable, and gives the business its best chance to succeed.
Financial management is a key to success for obvious reasons – the primary purpose of going into business is to turn a profit! It is critical for the business owner to set up an accurate accounting system and to understand how to evaluate the numbers. You need to understand your business’s financial reports and profitability ratios in order to track and manage all areas of your business. For many first-time entrepreneurs, dealing with the numbers seems overwhelming. In reality, a good small business accounting software does the hard work for you by producing the needed financial reports. Learning to read these reports and understanding how to use them (comparing ratios to past performance or to industry averages, for example) is not that difficult, and is a huge factor in whether a business succeeds or fails. The trick is to stop telling yourself that you are not a numbers person – if you are a business owner, you are a numbers person!
About the Author
K. MacKillop, a serial entrepreneur with a J.D. from Duke, is co-founder of LaunchX LLC and authors a small business startup blog. The LaunchX System, a five Unit series of step-by-step business startup procedures, software and more, assists entrepreneurs in developing a business idea into a successful company. Get on the road to business startup today.