For most entrepreneurs, their small business is their baby. That’s why it can be surprising when it grows up and starts to resemble an unruly toddler — one that seems slightly out of your control.
Since almost half of businesses fail within the first five years, according to the Small Business Administration, many business owners might look back and realize that year one was actually the honeymoon period. Here are some tips for keeping your business strong during the “terrible twos and threes.”
1. Realize your idea might need to evolve
“When your first business model isn’t working (and this happens more often than not), the CEO and team pivot to plan B,” says Alan Spoon, general partner of Polaris Venture Partners.
“[This] can be a tool to discover additional growth you might otherwise have overlooked,” he says. Continue doing market research and working with customers and trusted advisors to determine if there’s another angle that would make your business more successful.
Sometimes it entails scaling up — for example, adding lunch to a burgeoning breakfast catering business. Or you might do the opposite and adopt a more singular focus, such as sticking with your breakfast offering if that’s where you find the most success.
2. Reach out for customer feedback
If you’re planning to expand your offerings or further refine your niche, look to your core customers as both a sounding board and a built-in launch pad for your new products or services.
Ask them what you could provide that would offer more value, or where they see a gap in the marketplace. When you seek their counsel, you also win their buy-in.
3. Explore new marketing plans and options
You might find that local advertising is bringing you a steady stream of customers in the first year. Keep it up, but analyze whether you should also add fresh options to reach new potential customers.
Laura Stack, “The Productivity Pro,” advocates earmarking 20% of your income for marketing activities, such as advertising, promotions, social media and public relations, in order to stay top-of-mind among current customers and reach new target markets.
4. Don’t neglect your business plan
It’s easy to become complacent after a successful first year, but you need to continue to focus on thinking ahead.
Make it a priority to frequently assess your competition, your capital requirements and your staffing needs to see where you should make adjustments for current market conditions.
5. Become a more visible advocate of your business
“Year two is also the time to work ON your business, as opposed to working IN it,” says Caron Beesley, small business owner and blogger for the SBA.
She cites Steve Jobs and Richard Branson as two entrepreneurs who built their brand by actively marketing their company’s products and core values. You may need to delegate selected internal tasks so you can spend more time with your customers and prospects.
Consider further raising your profile by becoming active in your industry trade group, community philanthropic endeavors, or local business groups such as the Chamber of Commerce.
6. Know you’re in good company
Countless successful businesses look completely different today than when they first started.
Two noteworthy examples are Starbucks, which originally sold just beans and espresso makers, and Instagram, the photo-based social media site formerly known as Burbn. It combined check-ins, gaming elements and photos until the creators honed its focus to just photos.
Sometimes success comes from redefining who you are to meet unanticipated market needs or opportunities.
7. Don’t be lulled into thinking the path will be smooth
“No matter how you frame it, it takes years of hard work to become an ‘overnight success,’” says serial entrepreneur Darrah Brustein. Be prepared to continue to devote time and energy to your business.
About the Author
Cathie Ericson is a freelance writer covering business and consumer topics. She creates branded content for Fortune 500 companies, and her work has appeared on LearnVest, Costco Magazine, Forbes, TheGlassHammer.com and IDEA Fitness. Follow her @cathieericson.
Source: Office Depot