Business owners in small towns are usually bombarded with multiple challenges and constantly face difficulty managing their finances, bookkeeping, funding, and other aspects of the business. Leading a company of any size requires a lot of commitment, customer empathy, stakeholder management, and the mindset of a leader.
Growing your business and getting your unit economics right takes a lot of things to fall in place. Many things can go haywire and might bring your business down. That is why having a solid business plan and growth strategy are very important for your business to be profitable and successful. And for the same reasons, you should know what to do, and what you should avoid doing, to circumvent the pitfalls.
Things you should do:
1. Diligent market research
Doing diligent market research before starting your business is very important. Conduct a detailed benchmarking study. Analyse your competitors’ business model, pricing strategy, marketing strategy, and customer testimonials to get a fair idea of the market. Learn from industry best practices. Also, speak to various business advisors who can help with excellent decisions and direct you correctly. Post this exercise, make a detailed business plan on how to expand your business.
2. Respect your customers.
If you are a business owner from a small town and constantly wonder how to grow your small business, the foremost thing to take care of is the customer. Especially in small companies, customers can make or break your business. Always try to deliver the best value possible for your customers. Creating more value helps in building trust and supports the great recall value. Research states that a business with exceptional customer experience grows 10x more than an average one.
3. Don't be afraid of risks.
Despite the market, you are in and the services you provide, you might constantly fall into situations where you might need to take risks when you plan to grow your business. Many small business owners take risks getting to a place where they envision themselves to be. Taking risks usually provides a competitive advantage over the ones who sit back when the going gets tough. Business owners should look at risk as an opportunity to realise their goals and reach the customers. More often than not, businesses fail because of a lack of innovation, and innovation is impossible if you are not comfortable with the risk it brings. Learn to take calculated risks.
4. Effective & Tactful Communication.
It is incredibly crucial to communicate and negotiate effectively. It fosters good relationships with all the stakeholders you constantly deal with (your management, staff, and the customers). You have to look out to build strong relationships with your vendors, employees, and customers. Strong partnerships not only keep your business intact but also help you grow by bringing in strategic partners. Many business owners who wonder how to grow a business need to develop better communication skills to take it to great heights.
5. Be Adaptable
With globalisation and innovation being at the epicentre of our everyday lives, there are constant changes in policies and society. You must be competitive and plan to outdo other competitors in your town by being proactively adaptable to the changing times. Be flexible, optimistic, and ever curious to always learn and expand. This will set you apart and make your business a more successful one. If you constantly wonder “how to make my business grow”, being adaptable and constantly adhering to changing times can help you stay one step ahead of your competitors.
Things you should avoid doing:
1. Don’t do everything.
As a business owner, it is very natural to want to handle every aspect of your business. Studies show that it is optimal to have functions defined and resources allocated based on the skill level. It gives a fresh perspective and innovative ideas and can help in the business's growth. Understanding that running a business requires some skills outside your expertise, and needs experienced professionals is vital. If you always wonder about how to grow your business, having the right resources at the proper functions is the key.
2. Don’t ignore the importance of bookkeeping.
Don't ignore the importance of bookkeeping for your business. Bookkeeping helps in budgeting, making detailed business plans, and setting targets. It enables you to maintain records in an organised manner and eases your tax return process. With diligent bookkeeping, you need not do guesswork and can predict business outcomes more accurately.
Have resources to do your accounting, and manage your books to focus on the core business. There are many software and SaaS tools available in the market that can help you with easy and hassle-free bookkeeping, especially if you are a small business. There are many platforms that offer user-friendly digital bookkeeping, like Okcredit, which are more reliable than your traditional bahi khata. Also, you can manage your staff payments, attendance, etc. seamlessly on the Okstaff platform. This can help you set things in place and offer more structure to your processes.
3. Don’t be emotionally driven.
Emotions cloud your judgments. Do not decide when you are emotionally high. As business owners, it is constantly required for us to decide and divide responsibilities across functions. Try to be rational when you decide. Try not to mix emotions with business decisions. If needed, take time to become calm and then decide.
4. Don’t quit your day job.
When you plan to start your business, there is a high risk of failure. The essential thing in a business is finding a product-market fit, identifying the right customers, and the right service offering they will pay for. The company has a high probability of success if you figure this out. But usually, it takes time. Do not quit your day job unless you are incredibly confident about your business model or find your product-market fit.
5. Don’t trade off the quality of products.
Do not trade off on the quality of your products and sell them cheaper compared to your competitors to drive more sales and achieve your Gross Merchandise Value targets. Though it might help you in the short-term, sustaining with inferior quality of products and service in the market where customers constantly lookout for quality is extremely difficult. Do not execute such strategies at any stage of your business, since it affects customer trust and brand value.
Despite the market, service offerings, and the product, every business owner constantly faces questions like “how to grow my business” or “how to expand business”. The key to expanding or growing your business is to maximise the quality and experience for your customers while optimising costs.
In addition, have the above “small business tips and advice” handy at every stage of your business to help you get back on the right path whenever needed.
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Q. Do you need any certification or educational qualification to start a small business?
Ans. It is not necessary to have fancy degrees or master’s in business administration to start a business. All you require are some basic skills to start and run a business. Some essential skills are leadership skills, time management skills, firm commitment, negotiation skills, and stakeholder management skills. If you have these, approaching the problem statement in a structured manner will help you establish a successful company.
Q. When will you consider a business as a profitable or a successful one?
Ans. Usually, it takes two to three years for a small business to be profitable and successful. You consider your business a profitable one when you figure out your unit economics. The success of a company is subjective, depending on how you perceive it. If you have met your goals and targets defined for your business, you consider it a successful one, though not profitable.
Q. Should you take a loan to start your business?
Ans. Having enough liquidity and capital to run a business is crucial. Make a detailed financial plan for at least the next five years. Understand your capital requirements and take a loan if needed accordingly. Many financial institutions in India provide funding for small businesses. You can avail of a loan of up to INR 45 Lakhs and invest in infrastructure, marketing, or operations to boost your business. Cash Flow management is the key.