How to Crush the Barriers to Growth

The truth is, majority of small businesses fail within the first three years of starting.

According to the Australian Bureau of Statistics, more than 60 per cent of small businesses close their doors within their first three years. The Australian Securities and investments Commission reported that 44 per cent of businesses suffered poor strategic management, 40 per cent had inadequate cash flow, and 33 per cent suffered from trading losses.

What are they doing differently to others that succeed and continue to grow and flourish?

The one thing successful companies seem to do really well is – understanding their customers really well, know how to increase their profits, know how to monitor their cash flow and budget well, and train their people really well.

Understanding your customers (and your competition) well

One thing I’ve observed is that many business simply do not understand their customers well. They have all this data, but simply do not know how to read the data or apply the data to benefiting their customers (and the business).

Understanding your customers can help your business to improve your service and/or product, help your business improve its bottom line and increase its profits, and can really help your business plan strategically.

When trying to understand your customers, it is important that you put yourself in their shoes. Think what your customer’s biggest problems are, think about why your customer needs you, and think about what your customers find as value, and what they think is simply a waste. You need to really tune in to their psychology. Only then will you know whether a particular product you are selling will be a hit, or a miss.

You must also extensively research your competition. Find out what their marketing angles are, what their sales funnels are like, what their price points are, what their offering is, and whether they are successful. Understand how they work and what their customers think about them (the world wide web has made so much possible!). Learn from their mistakes and their successes so that you can build a better offering for your customers.

Increasing your profits

Every single business wants to improve their bottom lines and increase their profits. There is not one single business owner out there who says, yeah …. we could probably make do with making less this year. Even not-for-profits want to make sure that their business is viable and will be around for a long, long time to be able to help those they are working for!

But just how do you increase your profits? This goes back to understanding your customer-base well. When you know your customers, you know what products they will buy and what products they will be staying away from. If you are marketing a skateboard to those who are 60 and above, you’ll be fortunate to be making any profits at all!

Don’t just sell products and services. Show your customer-base how you can solve a problem they have. How can you make their lives easier?

You also have to be sure to build a sale funnel. If you do not have a sales funnel in place, you are making a colossal mistake. And once again, to know what needs to be part of your sales funnel, you really need to know your customers intimately!

Cash flow and budgets

Monitor your cash flow on a daily basis and make sure you have a very detailed budget created for at least the next 12 months. It is important for small businesses to understand what to spend their money on and if that expenditure will be generating income for the business, or whether it is not an income generating expense. This can help a business understand its spending habits and understand whether it is wisely spending its money, or whether it is headed for closure by spending its money mindlessly.

Successful businesses know where every dollar is going and how it benefits the business – whether it is for activities that boosts staff morale, to team building and bonding exercises, to specific marketing activities, to equipment for the business. They know exactly what the return is on each dollar spent, prioritse the expenses according to their business’ values and goals, and never simply approve of expenses which do not benefit the business in any way.

Train your people well enough

Richard Branson famously said, "train people well enough so they can leave, treat them well enough so they don’t want to." It has been found that many small businesses are not training their staff adequately to ensure they are equipped with not only the tools and knowledge to service their customer-base, but also to retain and keep them coming back.

The main reasons we have found is that they simply don’t have the budget for training and they do not have the time allocation to train their staff. This can be a deadly mistake for a business.

When employees are not equipped with the right skills and knowledge to fulfil their role to the best of their ability, there is the tendency to get frustrated. This frustration can then build up and it will show in their interactions with the customers.

These days, with training programs becoming more affordable and easily accessible with plenty of online options available (learn more here), there is really no excuse to not train up your team well. After all, if you train and take care of your team well, they will in turn take care of your customers well and keep them coming back!

Hi, I am Terrel Watkins. I love reading and writing. I would like to read and share Business tips with others. Best regards.