6 Small Business Tips that will help you on your entrepreneurial journey. Because we know it’s HARD! Let’s first take a look at just how hard, before delving into some solutions.
Yup – small businesses are everywhere. But that doesn’t mean that they always succeed. In fact, statistics show that the small business failure rate is quite high.
According to the Government of Canada, small and medium-sized businesses made up 98.1% of all employer businesses in 2021. Statistics recorded by Stats Canada suggests that failures of small businesses (based on provincial numbers) hovers anywhere around 20% to 50%!
And don’t forget the detrimental effects that small businesses have faced during the pandemic. The Canadian Survey on Business Conditions conducted in October to early November 2021 found some scary insights into the state of small businesses in Canada during this time:
“Small businesses were more likely to expect a decrease in profitability and sales…Small businesses were more likely to foresee challenges in repaying funding received from repayable government support programs. They were more likely to be uncertain of their future outlook.” – Stats Canada
But take heart. Not all small businesses are doomed to failure! And we’ve put together some small business tips to help you avoid some common pitfalls to better your chances of success.
1. Know Your Customers
Leading with the mother of all small business tips – Listen to your customers!
If you’re running your own small business, it can be difficult to know exactly what your customers want. But making some effort, like researching or costumer outreach, will go a long way towards ensuring your success. For example, if you’re opening a clothing store, identify who you’re specifically catering to. You’ll need to consider the gender identity, age, and lifestyle of your ideal customer to decide what styles of fashion you’re going to provide. You’ll need to understand clothing trends, and what your consumers value. Is it sustainability? Comfort?
How do you find all this out? Talk to your potential customers!
Don’t be shy, and be mindful of their time. Have a few questions prepped in advance and keep customer discovery invitations to a tight 15 minutes – unless your interviewee wants to talk more. Then, by all means do make sure you have the time to do that by not booking meetings back to back. Top tip that lets your customers (actual or potential) know that you value their time: open with thanking them for their time and saying that you will keep things to 15 minutes to not keep them too long. And keep an eye on that time.
Customer Discovery: Their words, not yours.
Start to wrap up about minute 12 or 13, whether or not you’ve ‘gone through your questions’. This is a listening and discovery exercise. Don’t over-direct. Allow your customers to share and ask questions to show you’re genuinely interested in their thoughts. Stuff like, “Oh, that sounds challenging. Could you talk a little bit more about that?” or “Hmmm, interesting that you mention difficulty in finding the time. Could you share some things you’ve tried to fix that problem?” etc.
And, if you’re looking for THE best resources on customer discovery and the benefits to you and your business, you must check out Katelyn Burgoin’s amazing offerings here – and sign up to her newsletter when you’re there. Seriously, do it! You won’t be disappointed.
No matter how good you are at creating products or services, if they don’t match up with what people actually want, they won’t sell. Make sure you know who your customer is and what they’re looking for so that you can become their preferred option.
2. Know your Competition
Before investing more time and money into your small business, it’s important to understand your competition. Conducting market research will help you identify potential competitors and give you an idea of what you’re up against—and how much space there is for innovation in your industry.
If you think you don’t have any competition – think again! Even if your offering is entirely new in your space, your ideal customers will be using something (or a combination of things) as current solutions to the problem you’re trying to help them solve. And, unless you’re providing a demonstrably better option than those solutions, they won’t be motivated to even try your offerings.
Market research will also help you better define your target customer, helping position your company as a unique and trusted alternative to the competition in their mind. And customer trust is key! In fact, a study conducted by Emplifi found that 86% of consumers were willing to leave brands they didn’t trust. That’s a huge amount – so maintaining your customers’ trust is paramount.
Although large businesses often dominate the field of competition, it’s possible to find underserved spaces where your small business could fit. Hence the adage, ‘niches build riches’. This competitive research should definitely inform how you build your company. Find out what works with your competitors and what is missing in your market. Use this inform your brand strategy. What differentiates my brand? Where should my company be located? What sets my products/services apart from other large businesses, and how can I effectively communicate this advantage?
3. Be Easily Accessible to Your Customers
If you’re running a small local business, it’s critical that you engage with your customers. Being present on social media channels is an effective and cheap way of keeping in touch with them—so use it! Every time your customers have a question or need help, respond quickly and effectively so they keep coming back.
Maybe even set up some fun events. Events are a great way to network and to engage your customers. Some may enjoy a short interview with you (providing golden customer insights into your biz), others may just want to get to know you better.
Another way of engaging with customers is through surveys: spend some time asking for feedback on how your product or service could be improved. Take note of their improvement suggestions and thank them for taking the time to share. And make sure to communicate any changes made from their feedback. They’ll feel heard and valued and it will further instil trust that you really care about their needs.
4. Optimize Customer Experience
According to a study conducted by a business outsourcing company, Sitel Group, 30% of customers that had negative experiences shared it with others. This means that small businesses must focus on their user experience by providing an excellent service or product every time.
This ties in with competition. Remember how 86% of consumers were willing to leave large businesses they were once loyal to if they weren’t able to trust those businesses? The CXO of that study theorizes that there is a gap between what consumers value, and how large companies go about treating their customers.
“Consumers have too many options to stick around after a poor customer experience. If you’re not delivering… your customers are going to turn to your competitors, no matter how loyal they were once upon a time.” – Emplifi CXO Shellie Vornhagen
Small local businesses are facing more competition than ever before as larger corporations expand their reach and digital start-ups pop up online with innovative ideas. This means that adapting, and making adjustments if you are able to, could be the one step closer to ensuring your success. Smaller companies will have an edge over larger competitors if they provide customers with an exceptional service or product. So there is still hope!
5. Spend Only what you Have – and Wisely
When it comes to small local businesses (which are our favourites) there’s no shame in spending less on overhead and staffing. Small local businesses have a reputation for taking fewer risks—but that doesn’t mean you should follow suit. In fact, if you want your business to not fail, you’ll need to be bold sometimes.
However those risks should be calculated. For example, coming up with an idea for your business and steaming ahead with it without first assessing its potential value to customers is a mistake. A BIG mistake, in fact.
When you get ideas for your business, first, find out if this is something your customers will want AND pay for. Yup – gotta keep checking in with them. Like all the time! Secondly, assess whether this is something you can execute AND make profitable in time. Don’t worry, if the answer is no for now on the execution piece of an idea you know customers will pay for – put it on the roadmap! If you can execute but aren’t sure of it being profitable, put a hold on that and do more research. A ‘great idea’ that isn’t profitable will derail you from your business focuses that are, which is a critical mistake from which many small businesses never recover.
While it’s important to not overspend, especially as a small business, spending the money that you have strategically can invite more profit. Of course, you’ll have to keep a steady handle over the books, and work harder to ensure that you don’t overspend. But, by experimenting and being scrappy, you find out what works best for your business and your customers.
6. Embrace Change
You’re likely not going to hit it big on your first try. So expect your business to evolve over time—it may go in completely different directions than what you originally imagined. This can be scary, but so many entrepreneurs have found that pivoting their businesses in new and unexpected ways has been key for long-term success.
For examples, many small businesses had to adapt to an ever-popular online situation during the pandemic. Businesses had to turn to free delivery and curbside pick-up to push sales. While you may not see immediate results, these changes can help for the long-term.
The only constant is change; embrace it, listen to your customers, adapt, and just see how far it will take you!
Got some small business tips of your own? Please do share in the comments – we’d love to hear ’em!