Congratulations! Now that you’ve prepared and filed both your personal and business taxes (and if you haven’t, get a move on!), it’s time to get back down to your real job: running your business. Because by the end of April you’re done with the major holidays and the task of tax preparation, this time of the year is perfect for working on new ideas or confronting problems you may have with your business. One of the major problems newer, but not brand new, businesses often run into is continuing the growth that kept your doors open in the first place.
According to the Small Business Administration, almost 70% of businesses survive for the first two years but then only 50% of new businesses survive past five years. This indicates that many businesses can make it through an initial phase but once the “newness” wears off, only 50% of businesses continue to survive. It’s a fair bet that the reason so many businesses fail after two years is that they didn’t continue to grow. Here are some tips for avoiding the two year problem that almost all business owners run into.
Define and Redefine. Unless you’ve created a product or service that needs semi-frequent updating, a big problem for you is how do you bring old customers back? Once they’ve purchased what you have to offer, they may not need you for another five or 10 years.
One of the best ways to bring your old customers back to your store is to focus on updating and revamping your products or services. Offering add-ons is a way to do this or redoing your old product so that people will want the new version is another (think any computer brand). Adding products and/or services should be a constant theme when you are a business owner because it will keep your old customers interested in what you have to offer and it will also drive-in new customers either by word of mouth or by advertisement of your newest and latest products. The key here though is to stick to your general business definition without letting it totally define you. You want to brand yourself so that people think of you when they think of certain products or services and getting too far away from your brand can hinder that.
On the other hand, it is similarly important to not shy away from business ideas that are slightly out of the box compared with your previous products. Your business definition should be broad enough to encompass a wide variety of avenues for growth and product or service development.
Identify Your Customer Base. Playing to your customer base is essential to getting and keeping customers. In many ways, who your customers are should characterise how you run your business in terms of marketing, product design, and even store policies.
Take a clothing store geared toward young pre-teen girls for example, the marketing of that store is to the pre-teens and the parents who purchase those items, stores are placed where parents can easily find what their daughters want, and the clothing isn’t necessarily made to last forever since the girls may only be able to fit into it for a year or two. The store knows better than to make super high quality (and expensive) clothing when the girls won’t get the wear out of it adult women would. Instead, the store can focus on changing items frequently to keep up with the most current trends and fashions.
Big department stores, on the other hand, focus on quality and consistency, only devoting a small portion of the store to the latest fashions with the idea that older women need the quality and the basics in addition to the trends. Knowing who your customer base is and addressing their needs will bring customers in and keep them coming back.
analyse Your Successes (and Failures). It is obvious that failures should be delved into and analysed for what went wrong and how the idea didn’t work, but you must remember that successes should be analysed as well. What worked is just as important as what didn’t work when putting together future business ideas and identifying the factors in the ideas that did and did not impress consumers is the first step in creating those future ideas. Consumer surveys can be a useful tool in discovering what’s good and what’s not or even calling random customers to ask. Keeping track of items that get returned is also a good way to spot problems. So long as you try to ascertain the good and bad of your business, you can avoid future missteps and guarantee better success.
Once you’ve created your business and it’s running successfully, the natural choice seems to be to keep it running just the same way. After all, we’ve all heard the phrase “if it ain’t broke, don’t fix it.” No business operates in a vacuum, however, and with the fast pace changes of the business world, you must make sure your business is keeping up in order to stay successful. Fight the temptation to keep everything exactly the same and use these tips to take a chance on something new!