According to statistics from the Small Business Association (SBA), 30% of start-ups fail within the first two years and 50% after five years. Only about 25% manage to make it past 15 years. These statistics are very grim for any entrepreneur, but there might be something to learn from those failed businesses. If you want your own business to make it past the 15-year mark, you will have to look at what others did wrong and avoid a repeat. Using these three tips to grow your business, you should be able to run a successful business that could potentially become a behemoth.
Find ways of increasing your customer base
Obviously, the most successful businesses are those with plenty of customers. Most entrepreneurs whose businesses fail soon after getting started do so because they did not get enough customers to keep the business running. To avoid such failure, it is important to do adequate market research and determine these tips to grow your business.
Know what customers want
Imagine a town or location with plenty of car dealerships but no car repair workshops. An inexperienced entrepreneur may open another dealership hoping to become as successful as the existing ones. What such a person has overlooked is that the market may already be filled, and they may not get enough customers. However, by starting a complementary business, they can fill a need within the community that will provide plenty of customers. Therefore, you can only increase your customer base by offering something really needed but not yet satisfied.
Of course, the only way to make people aware of your business is through advertisement, but all forms of advertisement are not equal. In fact, you could end up losing money if spent on an inappropriate form of advertisement. Once again, this is determined by your market research in order to know your customers. Imagine paying huge money for newspaper ads for, say, a restaurant. That would only work if your target clients are seniors as young people rely on social media.
Keep your clients
You have to keep your clients rather than operating a door-in-door-out system. To achieve this, listen to customer feedback and respond actively whether it is given by mouth or online. Just because something works do not mean it can’t be improved, and you need to be flexible enough to change and improve.
Get your clients to buy more stuff per transaction
An effective way to think about customers is that each of them is an investment. Indeed, every customer walking through your doors is a result of your investment in marketing, products, etc. As any stock investor will tell you, the key to success is in maximizing your current investments. Thus, you have to make each of your customers more valuable to your business over time. Think of it this way, if you have 100 customers and each of them spends $100 per transaction, you earn $10,000. By raising the average transaction value to $200, your revenue suddenly rises to $20,000 just from the same customers.
The problem is that raising prices won’t work as your customers will only get frustrated and go to your competitor(s). Instead, try some passive strategies as diversifying your services with additional services/products or special offers/discounts. For instance, holding special events could get customers to spend more on a visit. Consider why bars offer special happy hour offers; because they know that customers will drink more at the reduced prices. As long as the margins have been calculated properly, you will end up getting a lot more. And not only do customers pay more, but you also create loyalty and regular income.
Raise the frequency of transactions
Among the many tips to grow your business, none is as important as this. Basically, it means that customers are opting for your services over your competitors, which requires customer loyalty. This loyalty is generated by exemplifying your services above the ordinary. One of the ways has to do with how you receive and respond to customer feedback. For example, if your business is more responsive to calls, emails and other forms of correspondence, customers will be more likely to prefer your services. Responding to feedback and making the appropriate changes also makes customers feel valued and keep them coming back.
Consistency is also key to retaining customers as they can never get their hopes up or disappointed. Remember that you could lose a customer to the competition if they lack what they expected to find. This means keeping extra stock for those business hiccups, varieties of products, etc. All these measures should keep customers coming and accommodate new customers as they will never lack what they are looking for.
These are just some tips to grow your business, but you can also simply think about your own experience. Why did you switch from one restaurant, shop or bar to another? If you can remember what put you off and inspired the change, then you can avoid making the same mistakes.