The key to small business success is simple to understand, but not always easy to do. The 4 keys to business success are:
1) Solve an annoying enough problem for customers that they’re willing to pay money to solve it, and want to solve it right NOW
The is a subtle, but arguably profound point.
Many businesses exist to solve a customer’s minor annoyances. When times get tough minor annoyances suddenly become tolerable, while spending lots of money to get rid of the annoyances is no longer tolerable.
When you solve a “must solve” and especially a “must solve now” problem, you’re in a great business.
For example, cosmetic surgeons specializing in breast implants have seen revenues plummet by 85% in the great recession.
In comparison, heart surgeons haven’t seen any drop in income. People still have heart attacks and generally those that do insist of fixing the problem NOW, and they never shop around for price.
Be the heart surgeon.
2) Be unique in what you do or for whom you do it for (specialized offering or a niche market)
When you deliver your elevator pitch, where in 30 seconds (the length of an elevator ride) you describe what you do and who you do it for, can you replace your company name with a competitor’s name and have the statement still be true?
Example:
“My company is ABC Tax Services, we do tax returns for US tax payers”
“Our company is called H&R Block, we do tax returns for US tax payers”
If customers can’t tell you apart from your competitors, then you’re fighting an uphill battle.
Try this on for size from a real company (name changed to protect the brilliant):
“We’re XYZ company, we tax loophole strategies used by billionaires, and simplify them enough to be used by millionaires.”
3) Make sure your revenues exceed your expenses, and your bank account balance gets bigger each week. (Tip #2 helps with this a lot)
You must charge enough to cover your costs. If you’re not, it means customers don’t place enough value on what you do and your business may not be viable. Or it means your overhead is way to high given the actual business opportunity in front of you.
Deal with the reality of the situation. If you need to make a change, make it – and do it quickly.
The reason checking the bank balance is important is because it’s possible to be profit rich, but cash poor. The difference comes from how quickly your bills come due vs. how quickly your customers pay you.
If you’re on the wrong end of the equation, it’s possible to grow your sales and profits right into bankruptcy. Yes, counter-intuitive and yet very true.
4) Get the word out (e.g., marketing) related to tips #1 and #2 above
If a product is released to the market, but nobody knows about it, does it really exist? Just check your bank account for the answer!
When you have something unique to offer customers and you solve a problem they really, really care about, you got the foundation for a great business.
But, until you market your business and get the word out, something terrible happens… NOTHING.
Market or die (assuming you got something worth marketing)
There you go, 4 simple rules for business success in any small business. Pretty easy to understand right?
Now comes the hard part, you actually have to go out and do it.