20.6% – that’s the percentage of businesses that fail after one year, according to the latest U.S. Bureau of Labor & Statistics statistics. Nobody starts a business hoping it ends up on failure statistics. Luckily, a checklist of 5 essential do’s and don’ts of successful businesses could save you from making the same blunders other entrepreneurs have made.
Business schools, academia, and large financial institutions constantly study businesses to understand what makes them successful. We sampled ideas from thought leaders, business owners, and scholarly research to develop a guide with 5 essential do’s and don’ts of successful businesses. Let’s start with the dos.
1. Offer Unique Value
The business world is now more competitive than ever. One of the 5 essential do’s and don’ts of successful businesses is a unique value proposition (UVP). According to Harvard Business School, UVP is a customer-centric strategy that defines the value a business gives its customers. For example, Netflix’s UVP is uninterrupted and on-demand video streaming anywhere.
Now, to avoid confusion, offering a UVP doesn’t mean you have to create a new product from Mars or innovate a new technology no one has ever seen. You can have the same product as anyone else, but how you craft your messaging creates a real difference. For example, say you have a web design company, like many other businesses. Your UVP may be that you create highly responsive websites that ensure a great user experience for e-commerce shoppers.
A UVP helps you differentiate yourself in an increasingly competitive marketplace. Sometimes customers don’t even know they need your product, but your UVP can convince them they need it. Even more, your UVP can increase brand loyalty because customers want to keep coming back to get the value you promised and delivered.
2. Do Use a Customer-Centric Approach
Most entrepreneurs know that business is about the customer. Yet competing interests, such as personal goals, can make an entrepreneur lose sight of the most important aspect of your business — customers. Whether you provide services as an art consultant or sell products, it’s essential that you understand your customer’s needs, preferences, and expectations.
A customer-centric approach will increase customer loyalty, especially because they feel valued and heard. Research supports this: One study by Deloitte says customer-centric businesses make 60% more profit than those who don’t. The digital space is a great start to interact and give a personalized approach to customers.
Through forums such as social media pages, surveys, and customer interactions, your team can pick the issues that matter most to your target customers. For example, do they want a better pricing model? Are they looking for eco-friendly brands? Do they prefer talking to a real person at the end of the line over chatting with a bot? Listen to your customers and then act. property buyers may be able to assist you if you want to sell your property but have been putting off the sale because of the expense of making essential repairs or modifications. They will purchase homes regardless of the state they are in, relieving you of the responsibility and financial burden of making necessary repairs. Visit https://www.cashhomebuyersnc.com/sell-my-land-fast-clayton-nc/.
3. Do Business Within Your Means
Another of the 5 essential do’s and don’ts of successful businesses we couldn’t miss in this guide is doing business within your means. You’ve probably heard financial educators quip: ‘live within your means.’ It applies to business too. That doesn’t mean you never take debt, invest beyond or buy high-quality office supplies. It means being reasonable with borrowing, checking for things you could skip for now, and acquiring them as you scale up.
For example, you can start your business in a home office and then scale up to a commercial building when business is good. Take comfort that others have done the same. According to the U.S. Small Business Administration, about 50% of American entrepreneurs begin their businesses at home. You don’t have to invest in heavy machinery, advanced software, and multiple employees. Once you have launched, you can scale up.
Another strategy is prioritizing employee salaries, rent, and paying suppliers. You don’t have to do top-range interior office decoration unless it’s critical for your business. A budget can help you stick to only the most essential things as you scale up.
4. Do Research Your Market
One of the top reasons businesses fail is lack of market research. Through market research, you learn if the market needs your product. According to a study by CB Insights, 35% of businesses fail because the market doesn’t need a product. You need proper marketing, whether you are a small family owned business or a partnership.
Marketing shouldn’t be among the things to forego list. It’s recommendable to set a portion of your budget that may go to hiring a marketing agency, certified professional, or digital marketing efforts. In the modern world, you can also educate yourself on marketing through the plethora of resources available with a button click.
A marketing firm may help you draft a plan for your business. If you’re the one drawing a marketing strategy for your firm, here are helpful guidelines:
- Study your target market —What are their preferences? Where do they get their information?
- Build a strong brand identity using your unique value proposition
- Have a one-stop website with all relevant information about your business
- Leverage the power of digital marketing
5. Do Choose Your Business Partner Carefully
Another aspect on our checklist of 5 essential do’s and don’ts of successful businesses bringing a helpful business partner on board. Partnerships have become incredibly popular in the ever-changing marketplace. Think of all the top brands you admire; they’re likely to partner with other organizations and entrepreneurs. CB Insights found that 18% of businesses fail because they had the wrong team, so choose your team partner well.
How do you choose a business partner? Hopefully, not only by their elegant business card design. Choose someone you can trust. Ask yourself this: Can you go on vacation, put your phone off and know that your business will be okay when you arrive? If you answered no, then you need a reliable partner.
They should also be zealous about your business. A business partner is unlike an employee who can easily bail out if things don’t go as planned. Instead, they’re resilient and problem solvers. They don’t join the complaints bandwagon but get their hands on the ground looking for solutions. Do get such a partner.
Now, let’s focus on the ‘don’ts’ part of the 5 essential do’s and don’ts of successful businesses in the next section.
1. Don’t Ignore Technology
You’ve probably heard about Kodak on the list of worst business mistakes. Did you know that Kodak filed its first digital camera patent 46 years ago, in 1977? But Kodak did what you shouldn’t do with your business: ignore the power of technology. Ironically, it was their technology they ignored.
Today, you can access multiple types of technology depending on your industry, from workplace technology, robots and AI, digital platforms, and new ways to make things. We are not saying you have to jump on any new bandwagon that shows up on tech news. Instead, staying up-to-date with how technology can make your business more efficient is best.
You can survey key areas in your business and ask: how can we optimize processes? For example, could you improve delivery time for your e-commerce products using GPS tracking? Could you improve collaboration with workplace technology? Can production be faster and more efficient if you use machine learning?
2. Don’t Over Rely on One Type of Customer
Another don’t on our 5 essential do’s and don’ts of successful businesses checklist is over-relying on one type of customer with one type of offering. For example, if you own a building supply store, you only offer your products to a few construction companies. If something hits one of your customers, your business is done. Diversify your customer pool.
Diversifying your customer pool means you may need to research and know where you could get more customers. A good way to increase your customers is by diversifying your product portfolio. That way, you’d meet your customers’ needs and increase your value and relevance to them. Look at the most successful brands from Apple, Tesla, and Samsung; they all started with one product and diversified to multiple offerings.
The modern marketplace is so fast-paced that what’s popular today may be out of fashion tomorrow. Remember that a third of businesses shut down because no one wants their product. Therefore, keep relevant by innovating around your products. If you’re a manufacturer, tweak your recipe, add value to your natural products, and increase your product line.
3. Don’t Ignore Trends in Your Market
Similar to what we said about paying attention to technology, you should pay attention to trends in the market. Let’s look at three trends you shouldn’t ignore digital migration, the rise of e-commerce, and sustainable business development. Statista says social media users increased by 79.1% from 2017 to 2023. That means it is time to get the best content marketing agencies and digital marketers to put you in front of this growing population.
E-commerce is on an unprecedented rise, especially after the pandemic. Platforms like Shopify are getting more requests to help build an interactive e-commerce platform. If you have a physical store, don’t ignore how e-commerce could change the trajectory of your business. You don’t have to open one, but you may consider it if your business allows it.
Another trend you should ignore, especially if you want to sell to an increasingly eco-conscious market, is sustainability. 66% of respondents in a McKinsey & Co study said they consider sustainability before making a purchase. Are you still using single-use plastic packaging? Are you using harmful energy solutions? It’s time to rethink how your business can develop sustainably.
4. Don’t Be Afraid to Ask for Help
Another ‘don’t’ on the 5 essential do’s and don’ts of successful businesses guide is refraining from asking for help. Sometimes it’s a natural flex. You know your product or service better and are passionate about solving customer problems, so why seek help?
A CB Insights report found that 19% of businesses close because of a flawed business model and another 18% because of regulatory and legal challenges. Do you know who would help? A business attorney. A corporate attorney understands the legal and regulatory ins and outs of business learning. They can help you pick a suitable business model. In addition, they can help you keep compliant with legal requirements.
You may also benefit from a professional business coach or consultant. Don’t go for popular self-help gurus. Seek assistance from individuals with a track record of results. When suitable, accept help from family members and friends.
5. Don’t Ignore the Place of Proper Financial Management
Many businesses start on the right note with a great product offering. Then they fall off because they ignore proper financial management. The top reason businesses fail is running out of cash. Businesses can be slow at bringing profit, so you need a solid financial plan before going into business.
Of course, the most recommendable option is to hire a finance professional. They can guide you with budgets, tax compliance, and financial management. If hiring a full-time professional is impractical, you should consider hiring a virtual assistant or investing in quality finance software. For example, consider your cash inflow before taking a debt if you’re in the printing for businesses sector. While entrepreneurship involves taking risks, limit how much you can borrow at a given time.
Final Thoughts
You probably tucked a few 5 essential do’s and don’ts of successful businesses into your bookmark folder. Entrepreneurs never stop learning. However, it’s the entrepreneurs who apply what they learn who become successful. Some businesses wait too long to apply what they know to be true. Hopefully, with this insights-backed guide of 5 essential do’s and don’ts of successful businesses, you can make your business successful.
