Although entrepreneurship is at the heart of the US economy, business fail rates seem to be increasing and are currently 30 percent higher than they were in the late 1970s. There are other figures that confirm this trend: the latest US census shows that the annual business creation / business fail ratio is 400,000 / 470,000; and according to the Bureau of Labor Statistics, only half of all new businesses survive their initial 5 years, whereas the 10-year survival rate is even lower at 33 percent.
In this article we offer seven tips that can help US entrepreneurs launch a successful business.
1. Focus on strategic planning
Many entrepreneurs fall into the trap of investing most of their time and resources into planning and running successful operations. However, concentrating all efforts on the day-to-day running of a business often leads to missing the forest for the trees. To avoid that, you should ensure business strategy (whereby mid and long-term goals and action plans are defined) is a top priority and underpins all business operations.
2. Create and nurture an organizational culture
When it comes to achieving long-term business success, a strong organizational culture is as important as strategic planning. Contrary to popular belief, organizational culture is not the exclusive prerogative of large firms, as it also plays a key role in the success of small businesses by permeating every aspect of their operations with motivating values and a compelling mission.
3. Look after existing customers
Although this may seem an obvious suggestion, the truth is that many new businesses tend to focus their efforts on acquiring new clients, and sometimes do so at the expense of existing ones. A 2015 Customer Experience Index revealed that as few as 1 percent of all US companies deliver customer service that is rated as excellent, therefore missing an opportunity to turn existing customers into loyal advocates who generate new leads on their behalf.
4. Build a winning team
To put it simply: your team should be as strong as your overall business plan. Team building should be done in the initial stages of a business operation instead of as an afterthought. Moreover, it should guide the recruiting process to ensure that the personalities and skill set of team members are a perfect match to the company’s organizational culture. Don’t limit yourself to recruiting staff who have the right experience, but also look for those who enthusiastically share your vision and believe in your business concept.
5. Be flexible
As a business owner, one of the most difficult things to achieve is striking the balance between having a solid business plan and vision in place and knowing when it is necessary to stray from the blueprint. Being flexible does not mean improvising or losing sight of your overall goals, but rather it demonstrates that you have anticipated roadblocks and are able to successfully navigate through them.
6. Beware of over-innovation
As inconceivable as it may seem, there is such a thing as over-innovation. Many business owners try to re-invent the wheel and end up being swallowed by the competition, forgetting that in many cases, keeping it simple and improving products that already exist is a much more productive approach.
7. Make sustainable growth your ultimate goal
Instead of focusing on growth per se, you should aim to concentrate on growing your business sustainably. Often, companies that grow too fast run into financial problems, so make sure you plan ahead and know what your business’ sustainable growth rate is.