Many people around the world dream of being successful in business, but not everyone possesses the necessary skills to make their vision become a reality. Numerous elements contribute to making an enterprise flourish, with hard work and a little slice of luck undoubtedly amongst the main ones.
Employing proven strategies also plays a significant role, allowing business owners to make informed decisions regarding their operations on an ongoing basis. Read on as we look at some of the best strategies that can be applied to business in the 21st century and find out what experts have to say about them.
Cover every possibility
Planning for every eventuality in business is no easy task, but it is imperative to have a comprehensive strategy in place to cover any issues you may face. Studies have shown that around half of all small businesses fail to survive beyond their fifth year, highlighting how difficult it is to achieve success.
Inspiration can be found in Stefan Mandel’s story – a Romanian economist who came up with an innovative solution to his financial problems: winning the lottery.
He spent endless hours researching mathematical theories and eventually devised an algorithm that could accurately predict five of the six winning numbers. Mandel successfully tested his theory on a small scale in various countries across the world, before ramping up his efforts to win $27 million in Australia, he makes it clear how beating the odds is possible well all you need is a good strategy.
In an interview with the Romanian newspaper Bursa in 2012, Mandel said that implementing a well devised strategy was the key to his success.
“I’m a man who takes risks, but in a calculated way,” he said.
“Trimming my beard is a lottery. There is always the possibility that I’ll cut myself, get an infection in my blood, and die – but I do it anyway. The chances are in my favour.”
Establish achievable goals
Plan for the future, but don’t look too far ahead
Many business owners make the mistake of looking too far into the future and end up paying the price by neglecting what is happening in the short-term. While it is sensible to have a vision for where you would like the business to be in five years, the odds suggest that there is a 50/50 chance it will not make it that far.
Terri Urbanek, a consultant and business outreach specialist, believes that companies should seek to establish achievable and sustainable goals if they want to succeed. “Develop short-term goals – quarterly, semi-annual or annual – and create a plan that will help you reach those goals,” he said.
“Make sure your plan considers the resources you may need – cash, people, equipment, inventory, and additional operating costs, and make sure the end result will be a service or product that customers are looking for. Set the metrics you will use to monitor your progress towards attaining that goal – adjust your plans as needed based on how close or far you are from your goal. If you aren’t meeting your goal, determine why you are not meeting it – is it a lack of resources? Is marketing not working? Are you targeting the right customer segment?”
Pay heed to cash flow
Financing a business is not just about how much you will need to set it up, but having enough money to operate effectively once you are up-and-running. Whether you supply goods or services to customers, your business needs a regular stream of cash flowing through it to be successful.
Covering overheads is the minimum requirement, although the aim should be to generate as much income as your infrastructure can handle. It is also essential to ensure that your customers pay you in a timely manner. Offering extended credit terms can be a recipe for disaster when it comes to managing cash flow.
Business finance expert, Barry Moltz, urges the firms he deals with to focus on building up cash reserves during the first year to ensure that they are sustainable.
“A business can take its time becoming profitable for however long you have the cash flow to support it,” Moltz said. “If you take time for financial forecasting – a management tool that estimates profitability based on your past and present financial conditions – then you should know ahead of time when you’re supposed to be cash-positive. Over-forecast revenue and under-forecast expenses. In your forecast, cut your revenue in half and double your expenses for the first six months or year to avoid overspending. In this vein, revenue is vanity and cash flow is sanity. It doesn’t matter how successful you appear from a sales standpoint if you aren’t generating revenue.”
Formulate a data strategy
Implement a data strategy from the outset
Technology plays an integral role in modern business, allowing companies to connect with consumers like never before. Maintaining direct relationships with people is crucial, particularly with the online landscape becoming ever more competitive as more brands join the pasty.
Targeted marketing campaigns are hugely important, and it is imperative for businesses to understand how to run these successfully.
Having direct relationships with customers allows firms to personalise content for better experiences in the future, but this requires an understanding of data to implement effectively.
Houman Akhavan, the Chief Marketing Office of CarParts.com, says that using data has helped his business enjoy record conversions and excellent results over the past year.
“A critical part of this first-party data strategy has been using the correct customer data platform technology – one that is scalable to process millions of records of customer insights, including real-time signals that must be acted upon immediately before they go stale,” he said.
“Thus far, leveraging our customer data platform has allowed us to generate over a quarter billion personalised one-to-one messages. We’ve seen our click-through rates increase by as much as 400% and our email revenue has doubled.”