You have a product to sell, a long-term business plan, a viable marketing strategy, and a decent but budding customer base. You are entering phase two of the business life cycle: growth. You reflect on how to increase sales, maintain positive cash flow, and pass the break-even point. As far as you’re concerned, everything is doing well. After all, you are yet to encounter the most challenging stage of the cycle, phase three: survival.
In a perfect world, start-ups become money-making empires almost overnight after some sweat, tears, inspired ideas, and luck. In the real world, only 25 percent of new businesses manage to last 15 years or more, shows a study by the U.S. Bureau of Labor and Statistics. It means a staggering 75 percent crash and burn despite the sweat, tears, inspired ideas, and even luck.
There are several reasons new businesses fail. The most common and apparent is they did not make money. However, the underlying factors that led to the inevitable financial collapse were already present even before the breakdown. Think of inaccurate business plans, subpar research, bad location, no online presence, inflexibility, lack of buyers.
The good news is, there are plenty of practical strategies to counter failure and provide businesses with a better chance of succeeding. But even with a sound business model, a unique value proposition, and a lot of hard work, no new business will achieve long-term success without a solid operational foundation. What are these fundamentals? We put up four business basics that you need to focus on to grow your enterprise sustainably.
Table of Contents
Using the Data
Let’s say you recently opened a restaurant. In your eagerness to set up the business, you overlooked the fact that the area you selected barely has any market for your complex menu. You know that location is crucial to the success of your business; however, good places come at a high price, and you are presently unable to cover the hefty rentals. Worse, your location is already crowded with other restaurants (with better menus), making it almost impossible to break into the market. Still, you managed to get paying customers to visit the establishment, but only one or two returned. What is wrong with your business?
From the start, you can commit mistakes that will only lead to failure unless you take a sharp turn along the way. Instead of forcing your product or service on people, why not identify an unmet demand within a market and fulfill that need? But how would you find out what the people in a specific area want? How do you reach your market? The answer is research. Yet, research is useless if you don’t know how to translate the information gathered into specific measures that promote and protect your business.
Consumer data is the pillar on which many ingenious entrepreneurs grow their businesses. Lead generation, or the process of attracting prospects by identifying their interests, is crucial to any company seeking to attract and retain patrons. Once you understand your target audience, recognize your trade strengths, and know your competition, you can offer better products or services and achieve higher retention.
Whatever the nature or size of your business is, you need to record all transactions and keep accurate reports. With data analytics, you can track the progress of your business and determine if it is gaining or losing. The process also allows you to identify which marketing strategies are doing well and which ones need improvement. Moreover, the data shows trends in the industry that will guide you in making wise decisions.
Sustainable Recruitment
No matter how successful a company is, its most valuable asset remains its workforce. A business will stagnate without the right people, and it is guaranteed to fail in sustaining growth momentum without a talent pool that supports its interests and meets its clients’ needs. But as your business grows, finding the right people can become a challenge. How do you ensure that the recruits will preserve your company’s culture and values?
To address this concern, strengthen and empower the Human Resource department to collaborate with employees in identifying their needs and potentials. Eventually, HR can recruit from within the existing talent pool. The process guarantees that only the most qualified candidate gets hired. Internal hiring is practical, cost-efficient, and makes the transition smoother and quicker because the employee already knows the ins and outs of the business.
As your business expands, new roles that require new talents will come into play, and you will need to scout for external hires. Consider designating an HR recruiter to help fill senior HR jobs in London, if that’s where your company hub is or at a regional branch.
Quality Leadership
Companies must keep up with a constantly changing environment, rising competition, developing business trends, shifting customer expectations, and advancing technology. For a business to survive, it needs a leader who is not fearful of change.
Successful leaders see an opportunity for growth in every situation and never hesitate to seize it. Most are inherently good decision-makers who see hurdles as challenges and combine logic, intuition, and creativity to solve problems. They are aware that businesses undergo various phases during their lifecycle and that every stage requires a different approach. They adapt and adjust to the changes, allowing the company to evolve and mature at the right pace. Experts call this style adaptive and flexible leadership.
Quality leadership influences employees to optimize their efforts in sustaining the company’s growth. But how do you inspire your staff to work? Good leaders show employees where the company is heading. They do this by clearly articulating the business’ objectives. Workers tend to be more motivated when they have tangible goals to achieve. It does not only give a sense of purpose but also security.
Lastly, quality leadership promotes healthy relationships within the company. True, a cozy ambiance, beautiful furniture, and flexible working hours are attractive. But employees are more likely to be productive and efficient when they are rewarded for their performance and made feel valuable.
Development of Staff
For your business to sustain growth, you should have a talent pool that is happy, motivated, and committed to your business goals. Your employees are more than just workers — they are your most essential resource. The company will cease to exist without them; thus, you must keep them content and satisfied.
Career development is a major contributing factor to employee satisfaction and is crucial in reducing, if not eliminating, adverse attrition. It can also help uncover hidden skills and potentials that may be useful to the business in the future.Be sure that your employees undergo the necessary personal and professional training courses in order to grow individually but in doing so, grow the company. Think of fostering an environment that encourages employees to innovate, share ideas, and address obstacles in the workplace.
About Carson Derrow
