Are you just playing store or are you running a successful business? Let's talk about ways to ensure a prosperous business. According to the Bureau of Labor Statistics' Business Employment Dynamics, here is what the survival rate looks like:
50% of all new businesses fail in the first 5 years
This is the most often quoted statistic, so it may not be that surprising in itself to you. However here is where it gets interesting. About 80% of businesses with employees will survive their first year in business. So, while 25% of new business don't make it past year one, only about 10% of the businesses that make it past year 5 will die off the subsequent year, and only 6% in the 10th year. The point, and the most important numbers to know is about 20% of small businesses fail in their first year, and 50% of small businesses fail in their fifth year.
Don’t Be a Statistic
So now you know the statistics, let's talk about how you can beat the odds and create a thriving successful business. It is important, if not imperative, that you choose the right business. Choose something you are passionate about and that will also utilize your skills. Make sure there is a need or a want (supply and demand) in your community. If you want to open a hair salon and there are already several in your area you may have trouble bringing in business. Be flexible, this one cannot be stressed enough. There is no cut and dry business plan, things come up, be prepared to be flexible enough to make changes and keep moving forward. It is also imperative that you have a way to manage your inventory. The last thing you want is for your business to start filling with inventory you don't need or that will never sell.
Inventory Management
There are several reasons why managing your inventory as a new or existing business is so crucial to longevity. Without a way to determine what products are selling frequently and which ones sit on the shelves endlessly, maybe to be sold once or twice a year leaves you in a dangerous spot for your business. Could you be certain that you are ordering correctly and making the best profits off of inventory? Imagine having a system that would allow you to pull reports to know which of the items you carry are most popular, you would be able to make sure you are never out of stock and always turning profits. On the other hand you if you could run a report to show what items are not selling, or selling few and far between, you would save yourself the money of reordering these products as well as save room on your shelves for the better sellers.
Create Customers That Create Customers
How well do you know your customers? How many repeat customers does your business have? Ask yourself these questions. Do you have a loyalty program in place to reward repeat shoppers? Customers love to feel appreciated and you can help ensure their repeat visits with offering discounts and exclusive promotions. Quality is far more important than speed when it comes to interacting with your customers. If you can strike up a friendly conversation during the transaction or go above and beyond to offer assistance it will be noticed. Nothing is better than customers who refer other customers after they have had a pleasant experience shopping with you. It is crucial to create customers that will create other customers so your business can grow and flourish.
Hire Employees with a Similar Vision
When doing the hiring for your business make sure the people you are bringing on board share the same passion for the business as you do. You want to make sure they will offer outstanding customer service. Proper training will allow your employees to have the knowledge needed to perform to the best of their ability. After all, as the well-known motivational speaker Simon Sinek says, customers will never love a company until the employees love it first!
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May