Six Things Most Small Businesses Miss

Small business is the back bone of the American economy. Yet there are so many failures every year and equally, many that would be considered a hobby status by the IRS. By their definition, a business has a reasonable expectation of turning a profit.

Now, most don’t start out attempting to avoid profits, but for many, that outcome is the driving force behind a shutdown. Here are six things a business can do to avoid the expected.

1.      Understand your market

Probably the single most overlooked area for a small business, and one very near to me since I do research for businesses.  Without these fundamentals, you’re firing at a target using a blindfold (and that’s not an exaggeration!). You need to define your customer types (commonly called personas), identify their demographics or firmographics and build your initial budget around locating and attracting the right customers.

Since you likely don’t have a high end budget, you want to be assured that the people or businesses you target are available to you at a relatively inexpensive cost to acquire. Where do they look when they shop for your products or services? Do they need to be educated about features or benefits? Are there differences between your solutions and those of others?

The three tenants of this research—define, define, and define some more. The more pre-work you do, the more likely your success.

The good news is that you can do this after you open to get a better handle on your targets. The bad news is that the research should be refreshed every two to three years, depending on your business model, market shifts, etc.

2.      Kiss the ground

I’ve said this more times than I care to admit, and rarely have seen I it in action; kiss the ground upon which any customer walks. That goes for virtual businesses as well as brick and mortar.

I once witnessed a former home improvement contractor build a small restaurant/ice cream stand on a busy local road. He put a labor of love into the build-out, even including an outdoor water feature and benches for families to gather and watch the Koi. The problem was that from their opening, everyone behind the counter was miserable. Not a smile or acknowledgement throughout the whole process. And worse yet, it was his family that worked along with him (maybe that’s why they were so miserable). They were gone in less than a year.

Get this: No one has to spend money with you! They are giving you a gift by walking through your door. Be present with every individual. Acknowledge them with your full face and a smile. Be friendly to new customers as well as your regulars. (I’ve seen great failures in this as well; if you over-favor regulars, newbies feel as though you’re running an impenetrable clique.)

If you’re an introvert, become a converted extrovert, or higher someone to run your customer facing services.

3.      Invite criticism

Rule number 1-Be nice. If someone takes the time to give you their opinion, no matter how nasty, accept it and thank them. That’s right, be nice.

I’ve personally diffused a number of nasty tirades simply by letting the individual vent and then thanking them for their criticism. Because, believe it or not, it’s often the things that we don’t want to hear that offer the biggest transformational possibilities.

4.      Follow-up

In a seminar I used to teach years ago I asked how many individuals followed up with their customer after the sale. While some will say, this isn’t applicable to my business, I say rubbish. You can devise a follow-up plan to consistently monitor your model and benchmark your continuous improvement.

By the way, rarely did anyone raise their hand concerning follow-up. And even those that did admitted to be inconsistent (as in let’s follow-up since that was a great experience for both of us!). And what, you may ask, was the most popular reason for not following up?

“We are afraid of what they might say!” Honestly folks, you can’t make this stuff up.

5.      Once you get them, hold them

This is one of my favorites. It reminds me of the Seinfeld episode where Jerry rents a car and they don’t have one when he gets to the airport. His line…“You know how to take the reservation, but you don’t know how to hold it. And holding it is the most important part.”

Do you know how to get customers, but not hold them? Because holding really is the most important part. After all, there is a cost to acquiring a customer, but generally little or no cost to keep them. Most of the items we mention here contribute to holding. There are also programmatic features that contribute to loyalty such as special pricing, events, loyalty programs and the like.

Bottom line, you have to find out why they don’t come back and fix it!

6.      KPI’s and you

KPI’s, or Key Process Indicators, are the engine fluids of your business. If you’re doing all of the above correctly, you should have a way of measuring your progress. Otherwise, evidence comes from hearsay and you end up selling yourself tickets to your own little show. My, how great we are when we don’t measure what got us here and how we’re progressing!

You can Google “best KPI for small business” and read about all kinds of measurements that are important to your engine. Since most will be on the financial side, which is important, make sure you don’t neglect the soft side of the business. Make sure customer satisfaction, customer return/retention rates, revenue per customer and the like are part of your measurement goals.  Polling and surveying can help drive KPI’s as well. Consider the simple “how did you find out about us” question to make sure you’re desperately seeking customers in all of the right places.

KPI’s are your measurement tool to gauge performance and continually evaluate your strategy.  They foster continuous improvement. If you get nothing else from this piece, please jot that one down and tape it to your office wall.