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Actionable Tips for Running a Successful Business

05/06/2020

Starting a company isn’t all that hard. Running one and actually turning a profit is extremely difficult. In fact, an incredibly large portion of startups fail — research shows that roughly 90% of small businesses fail. 20% of businesses fail within their first year. But why do so many businesses struggle to even make it past their first 12 months of operation? These common factors are to blame:

Lack of Need

A company is only as good as its product or service. Before you go all-in on your idea, conduct some market research. If no one needs what you’re offering, it won’t sell.

Saturated Market

Take the time to find out what you’d be up against if you decided to market your product. If there is too much competition, you might get lost in the mix. If you decide to go through with your startup regardless, you’d better be sure that what you have to offer stands out.

No Capital

Building a company is costly. Unless you have thousands — and in some cases, millions— of dollars at your disposal, you’re going to need to find startup money. That’s where finding investors and heading to your York business banking solution comes in. When you’re up and running, you’ll need to maintain your revenue stream and build enough capital to keep you through tough times.

The Wrong Team

All of today’s best startup owners understand the importance of surrounding themselves with smart people focused on the needs of the company. Focus on developing a dedicated team of coworkers.

Pricing

Setting a price point can be difficult for a new startup owner. If your offerings are too pricey, you’ll alienate your less affluent buyers. If they’re too low, you won’t pull in enough cash to keep your operation running.

At this point, you’re probably wondering, “how can my startup succeed?” don’t worry, there are answers for you here. Here are a few ways you can keep your operation successful.

The Right Funding

The first step to success is finding money to jumpstart your company. There are plenty of places in York for loan accounts — but there are many different kinds of loans and you need to figure out which one is right for you. There are lump sum funding options like SBA loans and business term loans, both of which can come as microloans or large funds. Already operational businesses might benefit from a working capital line of credit. Like typical credit cards, you can easily apply, and access your funds via your York online banking solution. If you plan on buying commercial property, mortgage loans in York are a great option that offers businesses a steady payment plan with a lower interest rate for mortgages.

Understand Your Market

As previously mentioned, you can never conduct too much research. Build up actionable data on your target audience, competitors, and find a strategy for how you intend to grow. The marketplace is tricky, and no strategy works forever. You should be constantly using your key performance indicators (KPIs) to reassess your operations and think about how you’re going to evolve to keep up with the needs of your customers.

Set Goals

For your startup to last, you’ll need to make enough revenue to keep your operation running and re-invest in your company for further growth. It’s not enough to aim for just enough revenue to get through the month. On top of supplies, utilities, production and salaries, you’ll need to factor in how much you need to make on top of that to contribute toward savings, investments, updating equipment, and expanding. With this in mind, you’ll need to optimize your pricing, maximize your traffic and keep your transaction rates as high as possible. Set monthly and quarterly goals and plan with your team on how to accomplish them.

Don’t Overlook HR

Never underestimate the power of a great human resources team. Good HR can help instill a positive company culture and boost employee engagement. Happy employees produce better work, and better work leads to happy customers, and… you get the point. Small businesses don’t necessarily need an entire HR department — many owners team up with freelance HR consultants to achieve the same effect at a lower cost.

Hire Great Employees

This might seem like an obvious point, but many managers opt to work with as small a team possible in order to keep salaries to a minimum. Unfortunately, this isn’t a good strategy for anyone involved. When employees are forced to wear multiple hats instead of focusing on the tasks they’re truly skilled at, tensions get high. Furthermore, the job doesn’t get done half as well as it does when there are more people who can help out. Hire skilled employees who specialize in the tasks you aren’t experienced in. If you aren’t currently able to take anyone on full-time, try working with consultants and freelancers.

Treat Your Employees Well

Your employees need to feel motivated and incentivized to do their job well. That’s why it’s important to invest in keeping them with you. Competitive wages and great benefits are crucial — any lacking in either will guarantee high turnover, which is both time-consuming and costly. Factor these expenses into your annual budget. Consider the following:

  • Unemployment Insurance
  • Paid leave (sick, maternity, voting, jury duty, etc.)
  • Worker’s compensation
  • Health insurance
  • Retirement plans
  • Paid vacation
  • Life insurance
  • Disability insurance

Keep these points in mind, and you’re sure to find long-term success. Stay organized, treat your team right, and market your product wisely — it’s all smooth sailing from there! Remember, everything starts with the proper funding. Whether you need a company credit card or advice on mortgages, First Capital has the answers.

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