The first few years are crucial for a business to observe and find ways to optimize operations. Timothy Carter cites that 20% of small businesses fail within the first year, and about 30% by the end of the second year. What constitutes failure varies across different businesses. These can range from economic factors such as inflation, consumer confidence, employment, and economic growth and development to clerical oversights, poor planning, and industry variance.
While it may be daunting to launch a business idea into a lucrative operation, especially with volatile external factors, remember that success is predicated on having the skills needed to sustain your business in the long run.
Here are four skills you will need to stabilize and support your business:
Creativity
Approaching solutions methodically is only one way to go about growing your small business. Creativity, on the other hand, can help unlock a new perspective on your market, push you to diversify your product lines, and make sure these offerings differentiate themselves from your competitors.
Another benefit of creativity is that it fosters an environment that's inclusive, adaptive, and encouraging. Since smaller businesses work closely with their local communities, they have a good grasp of the needs of their customers. Products and services can be tailored to cater to the specific shortcomings customers are seeing in their retail experience.
In that regard, our Copper and Brass Paper Goods’ products are unique in that they highlight entrepreneur empowerment through their gorgeous illustrations. Our brand creator Ariel Young saw the lack of diversity in paper goods and stationery and created thoughtful products that could address this gap. Our product line is extensive, offering wrapping paper, greeting cards, accessories, and other small paper goods to their customers in a wide variety of designs. Through creative takes, we make sure that each type of business owner can find a design that suits and emboldens them.
Analytical skills
Risk-taking is necessary to keep your small business afloat. However, risky decisions have to be backed by data and comprehensive market analysis for them to work. Data-driven decision-making can be utilized to predict business outcomes, monitor product performance, and identify profitable opportunities.
Recognizing profitable opportunities means being adept at reading data. A Maryville University list of successful entrepreneur traits describe analytical skills as critical for creating a viable business concept. Analytical skills require effective research, as in gathering market data, and critical thinking— which scrutinizes the logical patterns in the data to turn them into something usable. In effect, entrepreneurs are able to recognize an unfulfilled niche and create a product or service which can fill that gap by analyzing the market and the conditions that influence it.
Versatility
Maryville University also indicated another key entrepreneurial characteristic: versatility. This can mean wearing several hats at once. An example would be a computer coder who can not only conceive an app idea and write its business plan, but is also able to design captivating graphics and market the product to potential investors and customers. This is particularly important for small businesses that need to operate with leaner teams.
Of course, versatility applies to how you run your operations as well. One thing you might want to consider is a pop-up retail model. ABC7 reports that small businesses have grown and expanded by participating in pop-up events. This is because the community reception and engagement found in these events can promote small and local brands.
Likewise, small businesses can save on costs by opening a short-term store. Pop-up stores have a smaller retail footprint so rental rates are more reasonable.
Money management Proper money management includes bookkeeping, projections, financial statements, and financing. All of this helps you make sound business decisions by recognizing how much profit you’re making and reviewing how much you should allocate for inventory purchases, employees, and equipment. Information gathered can also help set your prices, diversify your product lines, and reach new markets. Small business owners should be proactive in handling their finances in the first year. Chron outlines how the rule of thumb for entrepreneurs - during the first year of running your own business successfully you will take less than your prior salary, and re-invest most of your net revenue back into the business. A starting business that doesn’t manage this well can easily find themselves in debt. For one, a working capital should not be overlooked. As your business grows, the amount of working capital cycling through the business which funds your operations should also increase. Additionally, the SBA emphasizes that fixed assets consume working capital, either through down payments or monthly loan payments. It’s important to rid yourself of the assumption that you need to purchase fixed assets to grow your business. In fact, a better recourse may be buying used assets or leasing the assets as you work to get your business off the ground. If you are thinking of starting a business soon, we hope the above article will give you a good idea of the skills you will need.
Article written by Remy Anne James
Exclusively for Copper and Brass Paper Goods
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