Over half of small businesses fail within five years. An astounding 96 percent of new businesses fail within 10 years. This seems hard to believe, as there are a lot of great ideas and entrepreneurs who work long hours to turn their dreams into a reality. Business ideas are often born in coffee shops, over a few drinks, or at 2 o’clock in the morning. Business plans get jotted onto the back of a napkin or informally documented, and the business is launched.
But winging it isn’t an answer when it comes to starting a business—particularly when we’re talking about such paltry positive outcomes. The following are five things that a small business needs to check off that will help them increase the odds that they will be in the fourth percentile in 10 years.
1. Brand Strategy and Messaging.
Too many small businesses don’t realize the importance of brand strategy and messaging. It takes customers a matter of a few seconds to form an opinion about a company or product. If your brand messaging doesn’t convey what your company and/or products do in a succinct and compelling way, then you’re failing to connect with your customers. Further, a company’s business activities, products, and investments should coalesce around its brand positioning and messaging. When its brand strategy is unclear, a business can lose focus very quickly—from hiring, to corporate culture and values, to project prioritization, to products and services.
So, what can a company do to ensure that its brand strategy is on target? Employing a brand development framework is something TIRO Communications uses with its clients. Business leaders answer questions in collaborative session that constructs a brand strategy and messaging via pyramid building blocks. The approach starts with customer personas. Once these are defined, we work to identify the issues and problems those personas are seeking to solve. The remaining four building blocks to the brand pyramid are based on these two foundational elements—company mission and purpose, brand positioning, brand value and attributes, and brand vision.
2. Financials and Key Performance Indicators (KPIs)
A business plan needs to include discernible financial goals and measurements tied to those. These should be mapped out over an extended time and reported on a regular basis. Beyond revenue and profit margin outcomes, other KPIs include things such as customer loyalty, new leads generated, IBIDA revenue (viz., from existing accounts), new account revenue, and funnel advancement.
3. Marketing Plan.
Getting your customer personas down is pivotal to the success of any marketing plan. You need to understand their goals and objectives, preferences for language tone and content types, demographics, where they get information and content, how they make decisions, what is it about your product that resonates with them, among other factors. Your marketing plan must align with your financial goals and measurements—both short and long term. Assuming you have these pieces in place, you can proceed in building out other elements to your marketing plan. These include, but are not limited to:
• Website. You literally have a matter of seconds to make a digital impression with customers. If your website fails to convey your brand experience or is less than compelling, it becomes extremely difficult to overcome that first impression. As customers increasingly want real-time digital engagement to ask questions and request support, businesses will do well to consider offering multiple engagement channels such as live web chat, phone, and chatbots.
• Email Prospecting and Nurturing. The emergence of various email and campaign marketing tools such as MailChimp, Infusionsoft, ActiveCampaign, among others lowers the threshold—in terms of cost and the ease of implementation and management—so that small businesses can
• Ads. There are various options here such as Facebook, LinkedIn, Twitter, Pinterest, and others that deliver cost-effective results for businesses of all sizes. Make sure you segment your audiences correctly to get maximum value out of your campaigns. And while print publications are diminishing in prevalence, competitive compression is lowering advertising costs. In certain instances, cost-benefit ratio for print advertising can be quite compelling.
• Search Engine Optimization (SEO). Having a local business address is critical for many small businesses. This also means that you must complete and maintain digital business listing services such as Google My Business. Google AdWords is a great way for you to be found in digital searches.
• Social Media. Social media is a preferred channel for many customers. Over two-thirds use social media for customer support, and one-third indicate the prefer social channels over phone support. Small businesses need to use social media channels to engage with prospects as well as maintain engagement with customers.
• Content. Assuming your customer personas seek out digital content when researching topics and solutions, you need to create and maintain compelling content on your website. Blogs are a great way for small businesses to connect with buyers and nurture their customer relationships. But this only occurs if blog posts are published on a consistent manner and contain educational content. Blog posts also need to be written with organic SEO in mind.
4. The Right Customers.
Much has been written about the fact that not every customer is the right customer for a business. Organizations must focus on customers that deliver optimal margins and steer clear of those that deliver minimal or negative margins. The 80/20 rule typically applies here, where 80 percent of a company’s profits come from 20 percent of its customers, 80 percent of profits come from 20 percent of the time spent, and 80 percent of complaints come from 20 percent of customers. Here, small businesses need to have the right mechanisms in place to track the returns on prospect segments as well as the cost of servicing each customer.
5. Technology Tools.
Admittedly, technology can be an enabler or a detractor for a small business. Small businesses have limited time and resources, and sometimes it is better not to purchase a technology tool. The technology may incur more time and effort than the benefits it delivers. It may not talk to your other technology tools, creating process gaps and generating additional manual work. Small business owners will do well to remember that best in class is not always the best choice when it comes to technology.
Complicating matters is the fact that there are literally thousands of technology options available to small businesses. A solid understanding of business requirements dictates what technologies are used. Some of the technological tools that small businesses need to put on their list to evaluate include:
• Accounting. There is a plethora of different cloud-based accounting tools for small businesses. These integrate with your bank accounts, customer relationship management (CRM) systems, and marketing automation tools.
• Project Management. Delivering projects on time and on budget is critical—both from the perspective of the customer and the business. Finding a CRM solution that includes integrated project management capabilities might be your best option. But this obviously depends on your business requirements.
• Customer Relationship Management. Having one system of record for your customer interactions—sales, project deliver, and support—is critically important. It is a determining factor on customer satisfaction and loyalty, the effectiveness of your nurturing programs, and profitability.
• Email and Marketing Automation. Businesses have everything from entry-level email marketing solutions to more complex marketing automation systems that seamlessly integrate with your CRM systems.
• Social Media. Organizations may elect to manage their social accounts in silos. But they can also opt to use social media management tools that integrate them into a single system of management.
• Cybersecurity. The threat landscape becomes scarier and more dangerous with the day. An antivirus solution is a must. But as the attack surface has grown with cloud, social, and mobile adoption, businesses may need to look to include advanced threat management tools as well.
We could list out any number of other technological options such as blog tools, live web chat, and content personalization. Ultimately, the relevancy of a technological tool is determined by the requirements of the business.
The next time you think about winging it when it comes to your business strategy think again. There are simply too many moving parts to a business to trust your success to fate.