It takes a multitude of well-made decisions for entrepreneurs to find great success in their ventures. Here are four key elements that should be top of mind:
4 Keys to Building a Successful Business
1. Increase Gross Margin
Structure pricing so that gross margin is adequate to cover a typical overhead. Initially, it may seem like a good idea to start with a low price point because overhead is low and lower prices are attractive to customers; however, at some point, all businesses achieve a normalized overhead structure. As sales increase so does the need to build infrastructure, and without sufficient margin, there may not be enough margin dollars to cover those expenses and retain a profit. Anticipate growth and structure accordingly.
2. Find Your Niche
To have a successful business it is important to have a great product but also identify your ideal customer and differentiate your business from the rest of the pack. It’s all about finding your niche. Who is your product or service uniquely suited to, and how can you best serve that group?
3. Hire People That Know More Than You Do
Surrounding yourself with smart people is a strategic decision. You want talented individuals who are going to grow your business. Know your own strengths and weaknesses in business, and hire those who bridge the gaps. For example, if you are an operational genius but have limited marketing skills, find the smartest marketing candidate possible and let them do what they do best. Remember, this is about building a great business. You are paying your team for their respective expertise and contribution to the business.
4. Work On the Business and Not In It
Working on the business and not in it is an essential part of its continued growth. Your job as an entrepreneur is the bigger picture development and not necessarily the operations. This is not always practical in a startup but becomes relevant once your business matures. Of course, it is important to participate in some of the day-to-day matters with your executive team and staff but also equally important to create the space for everyone to perform their function while you lead the charge of innovation. If the day-to-day operations requires your presence, then you are working in your business and not on it. Consider re-evaluating your role.