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With recent economic turmoil, some entrepreneurs worry it will be hard to keep small businesses from receding, too. But failing to capitalize on opportunities to grow your company into a successful business might be a greater threat than economic hard times.
This is what Joel Splosky, founder of Fog Creek, learned the hard way. Splosky told Inc. magazine that, more than the receding economy, his failure to grow his business is what kept Fog Creek from joining the ranks of small business success stories.
While Splosky was thinking about staying afloat in trying times a competing company was expanding, and taking many Fog Creek customers with it. Splosky quoted small business consultant Geoffrey Moore's Crossing the Chasm to explain what he realized about small business success:
"Once the apparent leader-to-be emerges, pragmatists will support that company."
When all consumers are forced to be pragmatic, or practical, because of economic turmoil, small businesses might be wise to consider growth... or risk losing the limited consumers they have.
Luckily for Splosky, he got his company back on track. Here's what you can do to help keep your small business on the growth path during hard times.
1. Fix Cash Flow Problems, And Spend Your Money On Growth
Cash flow is the lifeblood of a company, and positive cash flow - more money made than spent - is the definition of a profitable business. In order to finance a growing business, entrepreneurs should start with successful cash flow management.
There are plenty of small business tools that can help entrepreneurs keep track of their funds. Accounting software can help you predict how much money you can feasibly reinvest in your company at a given period of time. Software also offers insights into consumer needs with a quick view of purchase history. Such tools can help you determine the best way to spend money on the customers & tactics that will help you grow.
2. Expand Your Services For Success
Once you have an overview of how much you can spend - and a list of the products your existing customers spend the most on - you can think about how to expand your niche. Combining what current consumers value about your services with ever-evolving technological innovations can be the best way to grow a successful business today.
Digital platforms can offer endless opportunities for small business owners to expand their products and services. If customers can't stop buying your small business's handcrafted greeting cards, think about how you might create online cards subscribers can send via email or through mobile phone applications.
ReadWriteWeb suggests small business owners re-imagine their market to include application downloads - so customers can get their services with the press of a smartphone button. Are you willing to invest in an interesting iPhone application that no one else in your market has created?
3. Invest In Staff For A Profitable Business
If you're thinking about expanding your niche, you might think you need to expand your staff. But before you start hiring a new team, think about treating your employees like investments.
- Hire new people who bring more to the table - like retail sales or copywriting - than just a specific set of skills
- Help existing employees expand their abilities by sending them to courses - but avoid conferences, which rarely offer actionable ideas
- Place your most promising & outgoing employees in networking groups... so they can learn the skills to help you attract new clients & partners
Employee skill sets might help you capitalize on market growth, and paying for classes is more cost-effective than paying for external consultants. Don't be afraid to spend some corporate cash on courses to help employees acquire skills that can attract new business, like software lessons or social media marketing classes.
With these three tips, you might find yourself paving the way for your own small business success story.
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