The three keys to small business success
Last weekend, I helped facilitate our first startup workshop of the year in Maricopa, Arizona for a group of eight entrepreneurs.
During our discussion of business models, one participant – a management consultant attending the class to gain a new perspective on teaching small business skills – pointed out what she saw to be the fatal flaw in many startups.
“They keep talking and talking, and planning and planning,” she said. “But they don’t ever get to the doing.”
This got me thinking. What distinguishes a successful small business from the unsuccessful ones that pop up and die out within a year?
After some brainstorming, I created a list of three keys to success for any small business. The secret is to adopt a mindset that balances planning ahead with executing effectively in the present.
1. Have a plan
Successful business owners have a defined plan of action and know their business inside and out. In order to sell your product or service, you need to have a good sense of who your customers are, what they want and why they should choose your product or service over a competitor.
Then, you need to create a plan. What will you need to do in order to satisfy your customer? What will you charge? How much will you need to sell in order to be profitable?
In our business development workshops, AMI uses the Business Model Canvas and the Value Proposition Canvas to help our clients visualize how to meet customer needs. Regardless of which model you use, creating a plan of action will help you find the best way to sell to your customers.
2. Get started fast
A plan is only as good as its execution. The next step is to immediately create a list of smart goals and action items that move you toward achieving your long-term goals. Think about the small wins: what can I do today to move my business forward? What can I do tomorrow? Next week?
One common mistake small business owners make is thinking they need to start really big and take out a big loan. This stems from the idea that you need to spend money to make money. In my opinion, nothing is more poisonous for potential start-ups.
For the majority of small businesses, it is possible to start selling your product or service without pouring a ton of money into the business during its startup phase. Start selling now, make sure that customers are willing to pay for your product or service and expand only when necessary. This eliminates some of the risk that comes with debt financing while allowing your business to grow at an organic pace.
3. Listen to the feedback
Every action you take for your business will generate feedback of some kind. Make it a priority to recognize and listen to this feedback. What did the customer think of that service? Why did I sell out of this item so quickly, while that one stayed on my shelf for a month?
Ask yourself these questions regularly and adjust your business decisions accordingly. Business models should never be static; they should be dynamic documents that grow, shrink, and change as time goes on. Avoid getting stuck in your ways by continuing to challenge the process as long as you’re in business.
When starting a business, strive to balance planning and execution. Your business is only as good as its plan, but a plan is nothing if you don’t execute it!
Check out some of the awesome businesses we worked with at our workshop:
Are you interested in seeing a workshop held near you? Email our Director of Business Development Taylor Harris at email@example.com.