All The Crucial Steps For Small Business Success

small-business

Last Updated on September 9, 2022 by Ruddy Gunawan

Being an entrepreneur in 2022 is generally harder than the years before. With worldwide inflation and high-interest rates everywhere, it is not easy to start a business when everybody else tries to save money.

Just look at how far the USD has gone up and compare it to many developing countries fiat currencies. When the purchasing power of average joe is going lower, starting a new business usually becomes harder.

The Bureau of Labor Statistics in the United States released a report that 65% of new businesses in the country fail in the first 60 months. In other parts of the world, the numbers are also consistently high. And as I’ve mentioned above, in 2022, starting a business becomes even harder. 

So, what to do? Just because it’s hard doesn’t mean we should give up. Here are all the crucial steps you need to take in order to make your small business a success.

Cash Is King

Here is the problem with most businesses. They don’t have enough cash liquidity. When you start a small business, the most important factor is to have solid cash flow strategies. Many tech startups, for example, are dependent on their valuation with very minimal revenues. 

In a year like 2022, where inflation is high, and many investors stop spending, this is actually a bad strategy. In the long term, having a proper cash flow strategy and decent cash reserves are the most important things your small business can have to survive. 

Also, keep your overhead as minimum as possible, and don’t overspend on unnecessary things. Many businesses often overpay for advertisements, partnerships, influencer outreach, or even just the rent cost.

Hire The Right Employees And Treat Them With Respect

Many small businesses make the same mistakes over and over again. The most common mistakes they make are in the form of management. When you have the right employees, and they do well in their job, you must always treat them with respect. 

When I said respect, I meant a comfortable salary and benefits, as well as favorable work conditions. I know not every small business can afford high-profile employees, and I know I said that you should not pay for high costs.

But remember that employees who join your business when it’s still “small” usually have points to prove. You should try your best to keep them in your business as long as they have successfully proven themselves.

On top of hiring the right employees, you must also become your own business’ employee at times. Do all the tasks that you can do by yourself, and only start hiring employees for these specific tasks after you have generated some revenues in the business.

Provide A Service Where You Can Make Quick Revenues

Another crucial step when it comes to small businesses is to provide a service where you can make quick revenues. Unless you are properly funded, don’t bother with making a product where you need to spend 6-12 months without any revenue.

If you are running on a budget, you must make sure you can make some revenue in the next 3-4 months. This is particularly important because you always want cash flow in order to grow your business.

This is why you should not try to provide a service where you will have to wait your whole life before you can sell something. You always want to be able to sell something right from the beginning. In the hard times when everybody’s appetite for investment goes lower, you should find micro niches where you know they will still spend some of their money on.

You Need To Be Able To Make Tough Decisions

Another super important thing to keep in mind is the ability to make tough decisions. Many entrepreneurs fail to understand the importance of making tough decisions. For example, when one of your employees fails to perform, you need to be able to communicate with him or her in a straightforward manner.

The inability to make tough decisions will not be tolerated easily in small businesses since they have much fewer cash reserves, to begin with. In big companies, for comparison, you can tolerate some bad business decisions. This is not the case with small businesses.

Sometimes you must even make drastic decisions. I know a restaurant owner who even had to change his business concept to become a bar, and now suddenly, he’s successful.

You Should Know When To Innovate And When Not To

This is also another crucial step for small business success. Not everything needs to be unique or needs to be innovative. In fact, many businesses are just copy-paste from one another. Sometimes you need to know when to innovate and when not to.

For example, if you live in a location where the average person loves to eat the same meals every day, it doesn’t make sense to take too much of a risk to sell a different meal. That being said, you can try to innovate in a subtle way. You can try to put different ingredients and call it a different ‘topping’. They might appreciate the uniqueness that you provide.

Final Thoughts

At the end of the day, all the above steps are crucial for any small business’ success. If you are just starting out, you need to make sure you will have enough cash reserves to pay yourself in the next two years. Many small businesses fail miserably, and you definitely do not want to be one of them.

You can learn more tips about small business success from my colleague’s post.

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