Now, everyone dreams of running a successful business someday, but just how hard is it? Here, you will learn helpful tips that will teach you how to run a profitable business.
According to statistics, 20% of startups will fail within the first year. By the 10th year mark, only 30% of these businesses will be left standing. Given the thousands of businesses trying to make their mark every year, the numbers can be very discouraging.
For business owners all over the world, there’s nothing more invigorating than actually making a profit. All those sleepless nights that you spent learning how to run a business is all worth it when you finally see it being profitable and all the hard work paying off.
While a few business owners find success quickly, most are not so lucky. For many startups especially, success comes with its unfair share of challenges and failure.
In this brief article, you won’t just learn how to run a profitable business, you’ll also find out how you can beat the odds.
6 Things That Are Stopping Your Business From Succeeding
In order to give your business a fighting chance, the first thing you need to do is understand why these businesses are failing.
While this approach may seem pessimistic, being well-informed is what’s going to save you from filing for bankruptcy someday. After all, preparation is key to any business leaders’ success. Here are the six things that are stopping you from increasing profit:
1. Having Too Many Things On Your Plate
One of the biggest mistakes that many business owners make is that they focus on many things at the same time. While multitasking might help get the ball rolling, it might actually stop you from doing productive work.
When you try to do multiple tasks at the same time, you reduce your efforts on each task. Eventually, you might end up sacrificing quality for quantity.
Instead of trying to be the Superman that does it all, why not start delegating your tasks to a few people that you trust? Remember, scaling to profitability isn’t a one-man job. You will most likely need a team to bring your idea to greater heights.
2. Failing To Communicate With Your Team
Speaking of having a team, did you know that poor teamwork doesn’t just make for a toxic work environment, it also stops the business you are running from being profitable?
In businesses with poor communication and teamwork, morale isn’t the only thing that suffers. It also leads to lowered productivity and significantly reduced work quality.
The problem with many business owners is that they’re quick to blame employees for poor productivity when they’re the ones who fail to communicate.
If you want your team to succeed, you need to open the lines of communication between you and your staff. Start by speaking less and listening more. See how that improves not just team spirit, but your operations as well.
3. Targeting The Wrong Audience
As a business owner, it’s crucial that you understand what exactly it is that your target audience wants.
When you fail to understand who you’re selling to, or worse, miss the mark altogether and target the wrong audience, you’re pretty much setting yourself up for failure.
Think about it this way: There’s no way Apple would’ve become the trillion dollar company that it is today if it marketed its innovative tech products to senior citizens.
Unless you fully understand the people who will make use of the products and services that you offer, it’s going to be very difficult for you to turn the business you are running into a profitable one.
Selling to the general public doesn’t work anymore. You need to choose your target market, get into their minds, and make your company about them.
4. Peddling An Inefficient Product Or Service
Even if you know who your target market is, you can’t expect them to stick around if you’re selling a product or service that doesn’t work. Learning how to make a profit isn’t just about promos and freebies.
Those won’t be enough for your target market to stay. You need to offer them a product or service that solves their problems.
If you’re still unclear of what you’re selling at this point, here are a few questions that you can start asking yourself:
- What are your customers’ pain points?
- How do you plan to address their pain with your products and/or services on offer?
- How capable are you in meeting your target market’s expectations?
- What improvements can you make internally to create a change externally?
- How do you visualize your business growing in the next 10 years?
5. Ignoring Or Not Collecting Enough Data
Most businesses fail not knowing what exact areas they failed in. It often starts with small things that go unnoticed like going slightly over on a marketing campaign or forgetting to take note of office expenses.
When you fail to keep track of even the most basic of business operations, you’re basically killing off your business slowly.
As hard as it is, collecting data is one of the most important things that you can do for your business. Why? Because you need to know everything that’s going around you.
How much did your Facebook page grow with the last campaign? What is the effectiveness of your new landing page in generating new leads for your email subscription list? How did a bad review affect sales on your eCommerce site?
These are all important factors in running a profitable business.
6. Being Too Lazy To Work On A Business Plan
Part of building a business empire is creating a solid business plan. Any business mogul will swear by this advice. Remember when you were still learning how to run a business?
You’ve probably read the importance of having a business plan in all the business articles and books you’ve read. That’s because creating a business plan is not just a suggestion—it’s a must!
It’s a strategic tool that all entrepreneurs need to have to fully understand how they can achieve their business goals.
It’s one of the main pillars that will hold your business up when challenges come your way. Without a plan, you’ll run the risk of running your business to the ground.
One more thing to know is that before you can start dreaming of scaling to profitability, you need to understand that no business will ever be perfect.
All businesses will have their highs and lows, and the best that you can do at this point is to prepare for both of those moments. Many people often just prepare for the worst, when preparing for the best is also just as important.
10 Rules On Running A Successful Business
You only have a small window to make more profit so when the opportunity comes, you need to know when and how to grab it!
However, that doesn’t mean you’re free to do whatever you want. When it comes to the most important steps in establishing a business, rules are definitely crucial.
Since we want to keep things easy for you, we’ve narrowed down our list to 10 must-follow rules for running a business and taking it to the next level.
1. Believe In Your Brand
There are countless tips for running a business especially for it to be profitable, but none can create as much impact as this first rule: Always believe in your brand.
Your business is only as good as your confidence in it. It’s what’s going to keep you going when you’re all alone, working late hours in your office, trying to figure out why your business ideas don’t seem to be working.
Quick tips: The only way that you’ll get people to believe in your brand is by believing in it yourself. On a piece of paper, write down your purpose and goals and share it with your team.
When you pass down your brand’s purpose, you’re not just engaging your team, you’re also building yourself a support system.
2. Differentiate Your Brand From The Competition
There’s no point wanting to know how to run a profitable business if you’re not interested in improving your brand as you go along. The competition is tight wherever you look.
Even if you think you’re working with a very specific and unique idea, you’ll be surprised that you’ll come across some form of competition along the way.
Quick tips: Make it your goal to THOROUGHLY differentiate your brand, products, and services from the competition. Look for ways to stay ahead by trying out new techniques and building essentially better products.
If there’s not much you can do to improve your branding or your product lineup, you can make up for it by offering excellent customer service.
3. Prepare To Be Imitated
They say that the best form of flattery is imitation. When the competition starts copying you, that’s when you’ll know that you’re on your way to success.
But let’s face it. Seeing the competition copying can be intimidating. It can even mess with your mind. This is why, before you start operations, you’ve already made a plan for when copycats come around.
Quick tips: Develop a continuous innovation mindset. Instead of packing your products with all its features, have a plan to introduce the innovation one at a time.
If your business is involved in developing prototypes, make sure to protect your intellectual property by registering patents.
4. Set Aside An Emergency Fund
Setting aside an emergency fund is basic when learning how to run a profitable business. While it can be a challenge for startups especially, stashing cash away for a rainy day will help you stay afloat when clients fail to make their payments on time.
Having an emergency fund will also keep your mind off the stress of not making any money in the first few months.
Quick tips: Set aside a chunk of your funds in an emergency bank account and work as hard as you can to keep it there. Write down exactly what situations are considered an emergency and stick to that list.
5. Manage Your Capital Wisely
Capital is the lifeblood of any business. Without it, it will be hard for you to get your business idea off the ground.
You need to know how to manage your capital wisely because you’re not just working with YOUR money, you’re also working with your investors’ money.
Quick tips: Figure out how to trim costs where you can afford it. Work on being lean from day one and take those principles with you even when you earn your first million.
You don’t need big fancy offices or big colorful brochures when you’re still starting out. Blowing your budget on things that won’t help you in the long term will only result in your business’ quick death.
6. Don’t Compromise On The Important Things
Do you know what will define your business and make it profitable in the long run? It’s not just the products or services that you offer, but your core values, passion, and sense of purpose.
Once you have these three things down, it will be much easier for you to build a company that will stand the test of time.
While your unique value proposition, corporate structure, and choice of managers are all important in your day to day operations, you can be flexible with these. However, your core values will go a long way in helping your business stand the test of time.
Quick tips: Write your company’s mission and vision and read it before you start your day. Constantly remind yourself why you decided to start your business.
If you find yourself in a tight situation and don’t know where to go from there, always go back to your core values.
7. Never Surrender Control While You’re Still In Charge
Some business owners make the mistake of handing over full control to investors for fresh capital. While it can help you run a debt-free business, it can also put your operations at risk.
Once you surrender even a part of your power, you’re allowing another person into the vision for the company that you’ve set out to build.
Quick tips: Before you give up your control, ask yourself this: What if you don’t exactly see eye to eye with this investor? How is the investor going to affect your purpose and core values?
If you don’t feel comfortable about letting someone else take the driver’s seat, then look for other ways to get fresh capital, like bank financing.
You need to think about this and evaluate it carefully. Seasoned investors can also bring in a level of expertise that will help propel your business to new heights.
8. Create A Business Plan
No business success guide or article will ever be complete without a section on creating a business plan.
As mentioned earlier, a business plan not only sets the direction for your business, it’s also an important tool in ensuring that the whole team is on the same page.
Quick tips: Writing a business plan is actually a lot simpler than you think. If you already have a clear idea of what your business is about and where you want it to go, you just need to write it down on paper.
But if you’re still trying to work out the details, here are seven things that every business plan must have:
- Executive summary – This is somewhat the snapshot of your business plan. This is the part where you describe your overall business.
2. Company description – This part answers the questions: Where do you see your business headed? What’s your vision for your company?
3. Market research – It describes the state of the market that your business is getting into. This is also where you describe your customer segments, their buying patterns, how you rank against the competition, and other related information.
4. Corporate structure – This shows your management structure. Who are the people involved in your operations? What are their roles?
5. Product or service on offer – Gives an in-depth description of the products and services that your brand is known for.
6. Marketing and sales plan – Shows your business’ marketing and sales strategy. How do you plan to get the word out there? How are you going to convert leads into sales?
7. Financial capacity – This describes how much funding you have at the moment, and how much you still need to scale your operations in the future.
8. Financial projections – Projects how much the business is set to earn next year, in the next two years, or in the next five years, considering external economic factors.
9. Guard Fiercely Whatever It Is That Brings You Joy
Profitable businesses aren’t just run by CEOs and managers, they’re run by people. Going into business can be stressful and tiring, so you need to guard fiercely whatever it is that keeps your sanity intact.
Many people readily sacrifice the love of their family and friends for business success, only to end up with nothing in the long run.
Quick tips: Your personal, emotional, and spiritual wellbeing is just as important as your financial wellbeing so if you want your business to last, you need to take care of the people that keep you smiling and laughing on a regular basis.
If your business is growing at the expense of your relationships, it’s time to reprioritize.
10. Bank On Long-term Success
You can go through all the steps in establishing a business and follow them to a fault, but if you don’t believe that your business has the potential for long-term success, then you’re just wasting your time.
Even if you have plans to sell your business in the near future, you need to build it with passion and a sense of purpose. Without these two very important factors, you’re basically saying that your ideas are not good enough.
Quick tips: You don’t even need to have everything figured out at this point.
As long as you have that desire to make lives better with your products and services, and you see your company having the capacity to meet your target market’s needs in the long run, it’s already a step towards the right direction.
Avoid Mistakes, Follow The Rules
Running a profitable business, as we’ve said, is going to be challenging. Still, as you learned here, there are ways to make the journey easier.
Avoiding common yet harmful mistakes, as well as following the ten top rules in business, should be enough to make those hurdles much more manageable.
Do you understand how you can run your business profitably despite the odds? Please drop us your comments!