Building a successful business can be challenging, regardless of whether you’re starting from scratch or striving to grow your existing business.
As a small business owner, you may find yourself being pulled in multiple directions at the same time, and needing to wear different hats each day.
Some days you’ll be delivering your product or service. Then on others, you’ll be managing cash flow, following outstanding payments, ordering materials, hiring staff and building customer relationships.
There are so many different areas that you need to master!
But, don’t worry – as a small business ourselves, we get it! And, we understand that at times it’s not easy and can be overwhelming.
To ensure that you’re on the right path, here are 10 things we believe you should focus your attention on as you grow your business.
1. Have a Plan
“If you fail to plan, you plan to fail.”
Yes, you’ve probably heard this one-liner several times before, but the reason we’re repeating it now is because it is 100% true.
Having a solid business plan from the start can help you to:
- Examine your business idea in depth to confirm that it’s a worthwhile investment,
- Set realistic business goals,
- Track your progress against your goals,
- Know what to prioritise in your business at a certain point in time,
- Prepare for future obstacles,
- Develop answers to questions you may not have considered, and
- Sell your business idea to others (e.g. potential investors).
Being as prepared as possible during your first year can be the difference between a business that fails and one that succeeds. AND, your plan can also become useful if you’re planning to seek finance somewhere down the line.
2. Have Sufficient Capital
Keeping control of your finances and managing your money carefully is essential to a business’ success.
This is because having sufficient capital determines the financial health of your business and its ability to operate effectively. You should be able to cover reoccurring payments and general expenses, with enough left on the side to cover any unexpected events or payments.
We definitely don’t want you to run out of money! Doing so can result in:
- Financial Insolvency,
- Legal Troubles,
- Liquidation of Assets,
- Bankruptcy, and
- Stress, Stress & Stress!
If you’ve been a bit tight lately with cash or are struggling to manage your finances, our team of accountants will be able to help you regain control.
3. What’s Your Budget?
Becoming reactive or living day-by-day can become a common habit when running a business. However, at times it is critical to take a step back and look at the bigger picture.
This is where a budget comes in.
Having a budget can help you to plan out what you can and cannot spend over a certain period of time, based on your available capital, anticipated revenue, resources and upcoming expenses.
By reviewing your budget each week, you will be able to:
- Confirm that you’re on track towards your financial goals
- Monitor the finances of the business
- Track your business’ performance against expenditure
- Ensure that resources are available to promote business growth and development
- Concentrate on cash flow – Reducing costs and improving profits
- Determine whether your business can afford existing commitments
- Make confident financial decisions
Without a budget, you’ll most likely find yourself running around in circles, confused and stressed because you don’t have the foresight as to whether you’re meeting your long-term goals.
4. Focus on Quality NOT Quantity
Whether you’re just getting started or have been growing your business for some time, there’s never an excuse to provide poor quality products or services to your customers.
In the beginning it may feel like a numbers game, but in the long run you need to focus your attention on quality.
A customer who is happy with your service/product and believes that they have received value for money, will:
- Happily refer your brand to friends and family
- Re-purchase from you in the future
- Give you free marketing (Client referrals through word of mouth)
- Help to boost sales and revenue
On the other hand, a customer who is unhappy and feels that they’ve been ripped off, will:
- Develop negative opinions of your business
- Not purchase from you again – A lost sale opportunity
- Spread negative word of mouth (Telling their friends and family about their negative experience)
The problem with negative word of mouth is that it can spread like a disease and has the power to kill your reputation.
This can cost you multiple customers and you’ll end up spending a lot more money on marketing, as you try to re-create a brand that people can trust again.
So remember, quality is fundamental for developing a sustainable and successful business in the long term.
5. Build Customer Relationships
In addition to attracting new clients, devising a customer strategy that aims to foster and nurture existing customer relationships is one of the most important things you can do in any business.
Data has revealed that it is more cost effective to sell to existing customers and retain them over time compared to constantly acquiring new customers that don’t repurchase.
Remember that your customers have bought from you for a reason, most likely because they trust you.
You can improve your customer relationships by:
- Providing all customers with great customer service and exceeding expectations where you can,
- Communicating clearly, simply and transparently with terminology they understand,
- Solving their pain-points and problems quickly and effectively,
- Providing your customers with an experience they WANT to share with their friends and family, and
- Not betraying their trust.
You can also encourage and reward existing customers who refer new business through a rewards program. For example, we give clients who refer new clients to us a thank you letter and a branded pen.
6. Hire & Retain Good Staff
One of the most valuable assets for your business is your staff.
For those who work on their own (Ie. Sole Traders) then this includes you.
Your staff are the ones who interact with your customers on a daily basis and are also fundamental to keeping your business machine moving. This is why you must leverage their strengths.
Investing in your people not only helps with improving team motivation and productivity, but also benefits the business by improving staff retention, efficiency, customer service and the overall vibe within the business.
To promote a productive and happy work environment it is important to:
- Hire the right people
- Make an effort to get to know your employees and their life outside of work
- Make employees feel valued
- Understand what motivates them, including their goals and aspirations
- Help them develop a plan or pathway to achieve those goals
- Recognise them for their achievements
Treat your staff as your greatest asset whilst you grow your business and we promise you, it will make a significant difference to your bottom line.
7. Market Research
As you grow your business, researching the market is a critical step in the process.
In order to provide quality products and services, you need to first know and understand your:
- Industry trends,
- Product and what makes it unique,
- Competitors, and
- Target customer and what they want / need.
What are their pain points? How does your product or service sole their problem?
Knowing the answers to these questions will help to give your business direction and will help you develop and refine products to meet your customers’ needs.
8. Good Record Keeping & Reporting
If you want to build a successful business you’re going to need to get your head around good record keeping.
Yes, I can feel you sighing from here, but this is essential for running a business.
When your records are accurate and organised (including invoices, receipts and internal documents), you can more effectively:
- Prepare your accounts and tax returns for end of financial year (EOFY)
- Ensure compliance with tax laws
- Manage and monitor your cash flow
- Calculate your revenue and profit
- Keep track of your business health, so you’re able to make sound business decisions
Having organised records will also help us (your accountant) out too 🙂
9. Succession Planning
The final stage in the business life-cycle is closing or selling your business. This could be due to retirement, an illness, death or a various range of other factors.
Before you reach this point however, you want to ensure that you have a proper succession plan in place.
This way you will know exactly what to do when the time comes; encouraging a smooth transition.
Before developing your plan, we recommended that you seek advice of a professional to ensure that your plan is solid and you haven’t missed anything out.
10. Seek Professional Advice
One of the most common reasons for business failure is not seeking the right advice throughout all stages of the business life cycle.
When it comes to Tax and Finance, we have seen many clients make bad decisions and mistakes due to not seeking professional advice.
- Didn’t invest enough capital into the business to start with
- Have drawn too much capital out of the business for personal use
- Lack knowledge of or insight into their cash flow and finances
- Have disorganised and incomplete records
- Do not plan effectively for tax payments
- Avoid book keeping or accounting services because they think they can do it themselves
Wrong! Wrong! Wrong!
At Knox Taxation and Business Advisory, we’re true experts in our field and are passionate about helping you to build a successful business.
We take great pride and interest in mentoring you throughout all stages of the business life cycle.
Rather than trying to do everything yourself, we can help you to:
- Stay in control of your finances,
- Help you understand ways to streamline your operations,
- Discover ways you can prosper and a grow,
- Avoid paying too much tax,
- Gain insight into your business performance,
- Understand the implications of financial decisions before you make them,
- Thrive and boost your efficiency,
- Overcome challenges and hurdles, and
- Push through your losses
Before making any business decisions, it truly is worthwhile seeking the advice of business professionals.
Although seeking advisory services may cost you a penny here and there, the advice you receive could save you thousands of dollars in the long run, due to preventing you from making poor business decisions that cost you and your business money.
So, there you have it – 10 Tips to Help You Build a Successful Business
We hope that you have found this article to be insightful and encouraging.
If you’d like to ask any questions or come in for an appointment to chat about your business, give us a call on (03) 9762 7344. Alternatively, click the blue “Book an Appointment” button at the top of this page.
All the best,