According to the U.S. Small Business Administration (SBA), there were more than 32 million small to medium-sized businesses in America in 2021. The SBA further reports that one in five small to medium-sized enterprises closes shop within the first year of operation, and 50% fail by the fifth year. The high rate of failure among these businesses can be explained by a number of factors. These include limited access to capital, information constraints, poor management, technological limitations, and external shocks. However, studies on the causes of business failure have tended to identify stagnation as a major culprit.
So, as an entrepreneur, you have successfully launched your business. Business is off to a good start, and your customer base is growing by the day. You’re not anticipating to break even any time soon. So you give yourself 2 to 3 years before you can start entertaining the idea. Your revenue is about enough to meet your basic expenditure concerns, and you can’t wait to start making a return on your investment. But then you get to your second year in business, and you notice that your sales are stalling. You understand that if you don’t do something quickly enough, you’ll find yourself out of business sooner rather than later. And so you ask yourself what it is that you can do to improve your business’ bottom line.
Well, it turns out there are a number of tactics you can deploy to get your small or medium-sized business pulling its weight again. For sustainable success, however, these tactics demand of you to be proactive, persistent and dedicated. In the discussion that follows, we explore six of the most important stratagems you could embrace.
1. Monitor your finances
Well, you won’t be able to tell how your business is doing if you don’t know your finances, will you? As an entrepreneur anticipating success, you want to make sure you know your regular expenditures and revenues like you know the back of your hand. Whenever these important parameters change, for example as a result of a capital injection into the business, you’re going to want to know that too. You’re also want to keep tabs on the value of your business because you understand how much of an influence it can be on your credit score.
The more stable your financials, the higher the probability that your business will live to see its fifth birthday. Automation has made it possible for entrepreneurs to conveniently maintain up-to-date records of their business financials. All you have to do is identify an automation program that works for you. Even better, you don’t have to be a computer wizard to do it!
2. Stay social and engaged with your community
Your business will stagnate the moment you cut back on or ignore deliberate attempts at maintaining and growing customer loyalty. You want to be deliberate about making existing and new customers want to be associated with your brand. And you understand that loyal customers are your brand’s biggest ambassadors out there. Well, there’s lots of things you can do to ensure you stay engaged with the community around you. For starters, you could attend or host physical and virtual meetups with loyal customers. Plus, rewarding loyalty, or encouraging customer feedback via email or using suggestion boxes is always a good idea. The beauty with sustained engagement is that it can also be a minefield of novel and feasible business ideas.
3. Cultivate good relationships with your employees
As an entrepreneur, you want your employees to stay motivated and enthusiastic about the idea of working for and with you. You know there exists a positive correlation between motivation and productivity. That is why you’re going to want to create an environment in which your employees feel recognized, valued, appreciated, and empathized with. Offering your employees flexibility in their work schedules, for instance, could work wonders for your business’ productivity and bottom line. You could also consider rewarding regularly for important achievements. In an age where remote working and work-life balance are all the rage, you want to listen to your employees a lot more. After all, playing to their preferences only works in the best interest of your business!
4. Keep your workspace and business processes organized and efficient
Just like organization often speaks to personal efficiency, order can have significant positive implications for business performance. As your business grows, your workplace is bound to get more and more vulnerable to inefficiency’s second nature – clutter. If you fail to be proactive, paperwork, communication backlog, and information deluges will inevitably overwhelm you. But because you want to see your business operate optimally, you’re going to want to consider digitizing many of your business operations in an effective manner.
5. Seek help whenever you need it
Sure, you rightly understand that entrepreneurship is all about sacrifice, and that few, if any, could possibly understand and appreciate your dreams the way you do. But a life of sacrifice and little appreciation of the need for repose will only invite burnout and unhealthy stress. That is why you need to step back from time to time and appreciate your wins, both big and small. And whenever you feel like you could be reaching, it is okay to reach out to a mentor, fellow entrepreneur, reliable employee, family member, or friend. You simply can’t do it all on your own.
7. Seize opportunities for acquisition, diversification, and new development
As an entrepreneur, on major reason you should nurture good relationships with your employees and customers is to show that you appreciate their capacity for exposing you to new, practical, and viable ideas. As you shop around for ways to expand your business, your customers and employees are always there to provide you with the platform you need to test your theories and ideas. You spot a struggling business that promises to be a good investment, you buy it out. You see an opportunity to break into a new market niche, you seize it. And when the opportunity to diversify your product lines presents itself, you do not hesitate to cushion your business against the treacherous nature of the business cycle.
The Bottom Line
Growing a small or medium-sized business can be difficult. There’s so much a proactive entrepreneur can do to try and stay a step ahead of the perfidious business cycle. Staying abreast of one’s finances, embracing organization, nurturing good relationships with employees and customers, asking for support whenever in need, and seizing opportunities for expansion are but some of the more important strategies for business improvement.
