In our experience, starting a business is not that difficult; it just takes doing. Growing a business is not that difficult; it just requires discipline. Whether you are based in the Caribbean, North America, Africa, Asia or elsewhere, doing, commitment to development and discipline are entrepreneurial traits that boil down to the person starting the business (the founder(s)). Notwithstanding the slew of variables outside of the founder(s) sphere of control, such as unfortunate economic changes, poor timing and bad luck, the majority of businesses succeed or fail because of factors that can be controlled. Here we will consider the top five business milestones in the first five years, to help your business get ahead:
1. Profitable Business Model – how do you develop one?
- Understand your niche (target market) and the problem you are solving
- Use the right channels to reach your niche (engage and nurture)
- Deliver the solution at a price your target market is willing to pay, and at a value that covers all your costs (direct, indirect, fixed and variable).
2. First Repeat Customer – why does this matter?
- Customer Acquisition Costs (CAC) are high. Most entrepreneurs ignore this metric, because it is often not as exciting to measure, as the exhilaration of landing sales (and counting revenue). To calculate CAC, divide Sales + Marketing expense by the number of new (acquired) customers, over the measurement period.
- Ignoring CAC is a fatal business flaw, as CAC tallies the resources and costs incurred to acquire an additional customer (e.g. marketing campaigns / spend, commission, salaries, bonuses, events, overheads). How much is a customer worth to you? Remember, what gets measured, can be improved.
- There are three ways to increase the profitability of a business – increase the number of customers, increase the value of each sale, or increase the frequency of sales. Research shows that increasing customer retention rates by 5% increases profits by 25-95%. The good news is: You can increase the number of buyers without acquiring any new customers. Customer retention can completely change a business’ profit margin.
- Loyalty has its rewards. Keeping a customer on for an extra year or more can grow income exponentially. This goes back to Milestone #1: understanding your niche will make a key difference between paid traffic for a new customer and an earned repeat customer through a positive experience / relationship.
3. Scalable Marketing Strategy – why do you need to know the tools?
- If sales is the lifeblood of your business, then marketing is the precursor to sales. As the founder(s), even if you can afford to hire a marketing agency, it will be highly advantageous for you to take an active role (and learn if you have to) the tools that make the system possible and profitable. Many successful business owners in reviewing their beginnings, often bemoan the tremendous losses incurred by engaging a marketing agency too soon.
- There is no easy way around tough work. Invest the time to learn how to market your business, then you can create a system that automates repetitive process activities. Key internet marketing techniques and working with the right people, can help you craft a scalable marketing strategy to amplify the effect without increasing costs by the same degree.
- Push vs Pull – Marketing is when they come to you (pull), sales is when you go to them (push). Integrating your sales and marketing strategies (and teams) will enable your business to reach cold, warm and hot prospects. However, if your business lacks an effective marketing plan, you will not have anyone to sell to.
4. Team Development – David vs Goliath was one single battle
- David had a divine anointing, and the skillful use of his tools as a shepherd prepared him to win a battle against Goliath. To wage subsequent battles successfully, he needed the counsel and resources of a team. This launches us to the next key milestone. One person cannot know everything. Your business needs a team to grow.
- Your first additional human resource may be a virtual assistant or contractor to deliver on specific tasks. However, you do need to invest the time to hire and train a team. The right choices will ensure you do not waste time or energy with expensive mistakes.
- Working with the right people as you develop your team will boost your business by leaps and bounds, and allow your business to better serve your target market, innovate and improve your reach and social proof.
5. Authority in Your Industry – Build Relationships and Trust
- Market awareness of your (industry) knowledge is a powerful combination. If you learn to leverage the digital landscape (and SEO) to amplify reach, it is the fastest platform to become recognized as an authority. As you develop content that is relevant in your industry and valuable to your niche (blogs, video, podcasts, books, articles, webinars and resources), your business will attract a mix of users and consumers. Have a strategy to support giving away your content for free.
- Marketing matters more than ever. Getting involved in local events, conventions, speaking events, guest podcasting or hosting relevant training / networking events will allow you to share expertise and develop relationships that transcend digital connections. Your niche will grow as it perceives your business to be a knowledgeable go-to-resource in the sector.
- Speaking engagements, stellar content and consistency will convert your business into a sought-after authority. We often remind our clients (and for some clients it is tough to hear), whether you are B2B or B2C, people do business with people they know, like and trust. No business, no matter how global, big, successful or recognized can cater for everyone. You have to generously develop market awareness about what your business does (lead generation), so that your niche can connect with your offering, engage with your brand, convert to sales (paid and repeat customers), and recommend your services.
Each entrepreneur’s experience is different; each business journey is unique. If we provided you with a pathway to start and grow your business, would you implement it? Starting a business is not that difficult; it just takes doing. Growing a business is not that difficult; it just requires discipline. Contact us for a discovery session.