The SBA defines a small business as one that has fewer than 500 employees. According to this definition, there are 28million small businesses in America and out of this, only 6 million employ others. This means that an overwhelming 22 million small businesses are non-employers. With over half of the population working in the small businesses, it is safe to say that this is a sector of the economy that simply cannot be ignored.
What it Takes SMEs to Stay in Business
The reality is that the consumer market is filled with products, brands and businesses that sell similar products. If you are planning on entering the market as a seller, chances are that you will be selling something another person has already introduced to the market. Statistics show that every month, approximately half a million businesses are started. Surprisingly, only a quarter of these businesses will survive past the 15 year mark.
Remaining relevant for 15 years and beating the competition is not an easy fete. You have to be excellent at strategizing and critical thinking. The following are the cardinal rules that every entrepreneur should follow in order to stay competitive.
- Partnering with Like-minded Businesses
The entrepreneurs who are really focused on staying relevant know how to pinpoint the businesses that cater for the same target population and liaise with them to increase sales. For instance, if they are running a tent rental company, they could form partnerships with wedding planners, funeral services and such related businesses and work towards a common goal, meeting all the needs of the client. This way, when a client goes in for a wedding planning consultation, the planner calls the tent rental company and together they meet all the needs of the particular client.
- Creating a Stronger Brand Impression
The moment that you see a swoosh sign imprinted on any sports or related gear, your mind thinks Nike. However, this type f brand recognition does not just happen overnight. It is a process that is achieved after considering the following factors:
- Does the brand logo connect with customers?
- Is it memorable?
- Does it tell the customers what you do or sell with ease?
The advent of social media and its use in advertising has made it both easier to gain brand popularity and easy to lose credibility. To get the best results, ensure that the quality of the output you give is consistent across the platform as this will make a consistent brand that will tie your business and customers together.
- Thinking Outside the Box
This term is used a lot in business, to the extent of becoming cliché, but it is what sets apart those that succeed from the ones that shut down. Tips to be followed when investing include:
- More employee based startups fail than those that start each month. Invest in employer businesses as they have a greater chance of survival.
- Service based businesses have been proven to achieve more success than those that deal with the sale of goods. Home improvement services such as repainting, plumbing and couch cleaning services among others are very popular.
- The employee comes first. As mentioned, employer businesses have a higher chance of survival. When you treat your employees well, they will be happy and they will retain the customer or client for you.
- Good Business Practices
According to Bloomberg, 80 percent of startups fail within 18 months of establishment. Poor business practices such as failure to communicate with customers to figure out what they really need, poor accounting practices that lead to fines and legal complications with the IRS, failure to consult when the business is making losses and poor service delivery in industries such as cabinet painters companies are the biggest cause of failure in small businesses.
Long term success in small scale businesses does not come easy. The entrepreneur must be willing to step out of their comfort zone and push the limits. Adopting these cardinal rules will transform your business for the best.
By: Jennifer Livingston