Opening a small business can be an exciting time in the life of an entrepreneur. Part of that excitement no doubt stems from the financial risks associated with opening a new business. Keeping that business growing and thriving takes effort, but the results can be rewarding.
It is reasonable to feel nervous when starting a business. Information from the U.S. Bureau of Labor Statistics indicates that about 20% of small businesses fail within a year of opening. That number climbs to 50% after five years and 70% by year 10.
While it’s essential for small business owners to focus on getting their businesses off the ground, it is equally important to consider the strategies necessary to keep that business afloat for the long haul.
Find an industry with staying power
Statistics indicate that health care and social assistance businesses have longevity. The BLS indicates businesses in the construction, transportation and warehousing industries do not enjoy the same staying power. After the fifth year in business, about 35-40% of these industries will survive. Opening a business in an industry where the stats are on your side can be a savvy move.
Quite often businesses fail because of lack of access to cash to sustain their operations. Fundera, a small business lending marketplace, advises that a large percentage of small business owners who apply for bank loans from big banks get rejected. In addition to raising capital through daily operations, businesses may have to turn to alternative lenders. Alternative lenders are typically companies, but not banks, that operate primarily online to quickly approve and distribute funds. Many are comprised of peer-to-peer lenders. According to a study by Harvard Business School, most major alternative lenders offer full loan applications online on desktop or mobile that take 30 minutes to complete. Keep in mind that interests rates typically are higher with these lenders than with traditional banks.
Small businesses can grow by maximizing operational efficiency and eliminating unnecessary duties. Efficient business owners delegate tasks to employees so they can keep their own management and business-growing priorities in order.
Build a strong brand and emphasize customer service
Whether a large company or a mom-and-pop business, building a trustworthy and reputable brand can help sustain a business for years to come. It is key to keep a business fresh in the minds of consumers. This can be achieved by making small changes dictated by evolving markets and/or offering new products or services.
Forbes says employee interactions are also key to building loyalty among customers. Keeping in touch with clients and using their opinions to make a product or service better can ensure repeat business.
Small business success comes down to recognizing that it takes continued work to keep operations afloat. Knowing what supports a business is essential to its longevity.