Starting and sustaining a profitable business is no easy feat. Research shows that only around half of new businesses make it past their first 5 years, and only around a third survive 10 years or more.
With careful planning and execution, however, it is possible to beat these daunting statistics. We’ll explore 3 key strategies entrepreneurs and small business owners can use to build a sustainable and profitable venture that stands the test of time.
Define Your Target Audience and Niche
One of the biggest mistakes budding entrepreneurs make is trying to appeal to too broad of an audience. When you attempt to be everything to everyone, you end up appealing to no one.
To build a sustainable business model, you need to understand who your ideal customers are intimately. Clearly defining your target demographic enables you to cater your product or service directly to their needs and desires.
Defining your target could mean tailoring your offerings by:
- Age
- Gender
- Income level
- Geographic location
- Hobbies
- Values
- Or any other characteristic
Do thorough market research to identify customer pain points, and then position your solutions around relieving these.
Related: 7 Questions To Ask in a Survey To Improve Business
Choosing Your Niche
Selecting a specific, specialized niche also helps attract the right target audience organically. If you run a pet supplies company, for example, focusing your offerings solely on cats rather than all pets allows you to hone in on what cat owners want. This niche specialization makes you stand out in a crowded market.
When you have an ideal buyer persona and niche mapped out, you can develop products, services, and messaging that resonate with that audience. This leads to higher conversion rates, customer loyalty, and positive word-of-mouth marketing within your niche—all of which are necessary for sustainability.
Invest in Quality Relationships
It’s easy for entrepreneurs to get caught up in sales, profits, and aggressive expansion when starting a business. Growth at all costs, however, is often unsustainable.
To build an enduring, profitable company, you must also invest heavily in relationships.
There are three key relationship areas that require nurturing; they include customers, staff, and suppliers/partners.
Let’s explore each.
Related: How To Develop Relationships Not Transactions
Nurture Your Customers
First, go above and beyond to build rapport with customers and craft positive experiences. This may involve any of the following:
- Surprise perks
- Loyalty programs
- Top-notch service
- Or eliciting feedback to improve
When customers feel valued, they become brand ambassadors who drive referrals and repeat business.
Related: The Super Bowl’s 5 Pillars of a Great Customer Experience
Invest In Your Employees
Take good care of your staff. Employees are one of the costliest business resources in terms of recruitment, training, and productivity loss from turnover.
Developing talent internally, competitive compensation, strong company culture, flexibility, and showing appreciation helps retain top staff for the long haul.
Networking and Building Partnerships
Finally, build partnerships and personal connections with suppliers, distributors, and other strategic partners. Negotiate win-win terms. Also, collaborate to achieve shared objectives.
When you have great relationships rooted in trust on all sides, it vastly reduces friction and expenses over the long term.
Related: How To Find a Partner for Your Business. Stop Going Alone.
Implement Systems and Processes
As a new business begins scaling, one of the biggest pitfalls is trying to manage everything informally or on memory alone. This approach contradicts a sustainable business strategy. A lack of documented processes and systems inevitably leads to frustrating inefficiencies, wasted time, and mistakes as the company grows, ultimately hindering its long-term health and profitability.
That’s why it’s crucial to take time early on to map your business processes, codify policies, create operating manuals, and implement organizational systems.
Employing this upfront investment of resources helps create consistency, minimize redundancy, simplify training, and reduce frustration as the company matures.
Some important systems to implement include:
- Standard operating procedures for tasks/workflows
- Inventory management
- CRM/customer databases
- Style guides/branding assets
- Accounting/invoicing/billing systems
- Marketing systems and analytics
- Hiring/onboarding processes
- Training programs
- Automation software
While this level of systemization takes work, it frees you up from daily firefighting to focus and allows you to focus on business growth and strategy instead. The efficiency gains usually far outweigh the effort required.
Bonus: Consistent Marketing and Social Media Presence
One of the keys to profitability and sustainable business strategy is continually funneling new customers into your business. It requires an intentional, long-view approach to marketing versus sporadic campaigns.
Build an annual marketing calendar that schedules a mix of marketing activities week-to-week and month-to-month.
Your marketing mix could include content creation, email newsletters, social media, pay-per-click ads, print/TV/radio ads, and special promotions or events.
Consistency is key
Consistency is key – when customers see you actively posting on social media, sending helpful emails, and running promotions, you stay on top of their minds. This means more conversions over the long term.
Social media, in particular, is vital for reaching today’s consumers and boosting brand visibility.
Here are a few tips to apply for your social media marketing efforts:
- Commit to posting valuable, engaging content 1-2 times per day.
- Respond promptly to comments and questions.
- Use hashtags related to your niche, and run contests and giveaways.
- Participate actively in relevant Facebook groups.
When done consistently, social media can become one of your most effective sales and marketing channels.
Related: 5 Tools and One Unified Solution for SMBs to Improve Customer Experience
Conclusion: You Can Be Among the Successful Few!
Creating a profitable, sustainable business requires foresight, commitment, and patience. By laser-focusing your efforts on a well-defined audience and niche, building loyalty through great relationships, implementing scalable systems early on, and running consistent marketing, you set your company up for longevity.
While the road is long, the payoff – both financially and intrinsically – makes the effort well worth it. Good luck.
Related:
