16 Principles the Most Profitable Small Businesses Know!
What are the most profitable small businesses today? What do these businesses do or have that makes them different for all the other small businesses that are struggling to survive amongst a tough economy?
1. A solid Value Proposition
A solid value proposition explains in 3 clear sentences or less why customers need their products. If there is no value proposition then there is no business
2. A Product That Addresses a Hungry Market
If you have a product to sell that people have an appetite for, and if your competition is sparse, your chances of turning a profit are good.
3. A Unique Selling Proposition
Without exposing the benefits of your product or service marketing is based on what you do. This results in a lack of engagement with the audience. Don’t advertise what you think your customer is searching for expose the solution. More importantly expose it in a way that makes your product service or solution the only way they can satisfy that need. Deliver tangible value were others won’t.
Looking the part is one thing but longevity and success are something completely different. The most profitable small businesses are profitable because the purse strings are held very tightly. You need a new chair for the office, what’s wrong with the one you have? You need a new computer, do you really need enough ram to power the Mir Space Station. I don’t think so!
Once there is more cash coming in than going out then you can think about putting the flowers into his reception area.
The most profitable small businesses, the really profitable ones, know that it is not about just creating one killer product and tapping into one market. It�s about taking that as a stepping stone to branch into other areas, new products or services, or new markets. The music or software industry is a great example – once the original code or product has been written it takes very little to make an additional copy.
Small Businesses often start of as a single owner wearing many different hats. The ones that break through are the ones that have the following entrepreneurial characteristics; commitment, passion and a strong belief in what they are doing. Working 100 hours a week for the first two years is common practice!
7. Know Your Price
Deciding what is a fair price is a problem for many small businesses, especially as value, like beauty, is in the eye of the beholder. A good quality product that is priced too low often does not have its quality recognized. On the other hand a product priced too high can push customers away. The most profitable small businesses find the otimum price point and milk it.
8. Know When to Walk Away
People and businesses are always looking to increase their own profit models by reducing their operating costs. Quite often that can mean that a business agreement that has been in place for several years is no longer profitable for your small business. Even if that is the largest of your customers you need to be in a position, through diversification, where you can walk away. The same goes for your supply chain.
9. Give Customers the Attention They Deserve
A paying customer is the most important part of your business. Make sure that what they are paying for is delivered and give even more value to them to keep them happy. If you have a happy customer then marketing other selected products or services to them becomes easier as they already trust and respect you. Always look towards making a second, third, fourth sale from one customer.
10. A Sound Distribution Model
Whatever your product you need to work out the best route to market. Is it direct sales, a distribution channel, affiliate marketing, online sales. There are a plethora of routes to market and the most profitable small businesses pick the one or two that best suit their audience and align with their overall business strategy.
11. Utilize Marketing Strategies that Work
If nobody knows you are there then how can your small business turn a profit? Getting the word out about your company, without going broke is no laughing matter. Understand your target audience, know where they are likely to be and then deliver compelling copy that will answer their specific questions and needs.
The most profitable small businesses have learned to adapt to the change in consumer trends and have adopted online technologies such as social media to drive awareness and build engagement about their products across the internet.
12. Watch the Competition
If a small business is successful then it will only be a matter of time before others start circling looking for their share of the spoils. Never take your eye off what others are doing around you. If you can position yourself as market leader through strategic marketing, community building and securing top real estate both on and offline, then you can create barriers to entry for your competitors.
13. Don’t Undervalue the Initial Investment
Many small businesseses fail because they undervalue the true start-up costs that getting the business of the ground will actually take. Although a sound business plan can help foresee areas that will require investment there will always be obstacles that stand in the way. Savvy business owners will have capital ready for such eventualities.
14. Hire Only the Best
Most small business owner have the power of knowing exactly what is needed to do a certain job in the business as they have probably done them all! You might be desperate to take some of the pressure off and get some help, but only hire someone who is truly outstanding and can add real value to the company. Until that happens think about outsourcing certain tasks or jobs that do not meet your strengths.
When part of your business is making money or running like clockwork then can it be automated. There are software and systems available that can pretty much do everything. Find one and use it and then there is one less aspect of your business that needs constant attention
If you can’t find one, create a system that automates it for you. You could then package it and sell it to other businesses in your industry.
16. Embrace the Internet
An internet and social media presence can no longer be avoided as far as small businesses go. Businesses need to be able to provide an environment where targeted customers and users of their products and services can learn more and educate themselves on why they need to be associated with that business. More and more consumers are researching and buying products online those that have positioned themselves are reaping the rewards.
Ultimately the most profitable small businesses are successful because they have a sound idea for a new business; they execute it with military precision, and deliver excellent customer service that turns customers into repeat buyers and brand evangelists for their business.
If you want to start a profitable small business, (let’s face it, nobody would want to start a loss making business!) then think how you can add value to your targeted customers and over deliver on that value time and time again.
Once you can satisfy that question then you are on your way to developing one of the most profitable businesses.