It is not easy starting a new business. Many new businesses do not last more than a few years. In fact, the U.S. Small Business Administration reports that 1 out of every five new businesses fails within the first two years. In a 5-year period, this number rises to nearly 50%. The good news is that there are proven methods to grow your small business. Read on to learn about growing a small business.
Explore four effective tips for business growth and ensuring your company’s survival.
1. Sufficient Cash Reserves
Cash flow is the number one reported issue for struggling small businesses. Yet, successful companies are sitting on enough cash reserves to withstand trials and tribulations.
Having enough cash in reserves depends on good cost estimating. For starters, you need an accurate estimate of how much the upfront investment is for your new business.
In addition to the cost of opening, you also need cash reserves. How much cash will you need to pay expenses for 3-6 months without revenue coming in? This type of risk planning is critical to help new businesses weather the storm.
As you experience business growth, your company may require a new home. More sales ultimately lead to more significant resourcing requirements. For example, you may require more employees or warehouse space.
The good news is that corporate relocation is a sign of growth. However, relocating a business requires careful planning. First, you need to select a strategic location that allows for continued growth.
3. Digital Marketing
You have to get the word out regarding your new business. Drive-bys and word-of-mouth are not going to cut it.
Instead, you should use the power of social media and the internet. Start off by creating accounts on all the most popular social media platforms. You should have Facebook, Instagram, and Snapchat at a minimum.
Next, start joining local community groups and offering specials to new customers. Finally, you can tailor low-cost advertising campaigns on social media to target your most likely customers. As you establish a customer base, these social media accounts will help you grow the business even further.
4. Keep Expenses Low
Keeping corporate expenses low is one of the most effective ways to maximize your profit. Reducing expenses is especially important given the reported cash flow issues that many new businesses have.
You should carefully track all monthly, quarterly, and annual expenses. Then, look for areas to reduce costs and try to eliminate unnecessary spending where possible. Everything should be on the table, including human resources, utilities, and any other business expenses.
Your Guide to Growing a Small Business
You are now ready to start growing your small business. It all starts with meticulous planning and estimating how much upfront cash you need. Also important is a reasonable forecast for revenue and profit.
Other tips like keeping expenses low and ramping up your digital marketing campaign are also critical. When you have an established customer base, moving a business becomes key to continued growth. If you enjoyed this article about tips for growing a small business, check out our blog for more great content.