When you’re listening to a motivational speaker or reading the story of a successful business, it all seems so simple. It sounds like all you need to do is hustle and you’ll have the company of legends. Then you come back to the real world.
Of course it takes inspiration and energy to build a strong business, but it takes far more than willpower. As you’re building a successful business, use these strategies as your guide.
1. Merge Passion and Practicality
Business success is all about balancing your risks. If you only take steps that you’ve measured, studied, and calculated, you won’t be trying anything new. You’re likely to get lost in the sea of competitors.
On the other hand, if you fly by the seat of your pants and let your passion make your decisions, you’re likely to make too many wrong turns for your wallet to handle.
The key is to balance the two. Understand what your passion is and keep your inspiration, but find practical, reliable ways to make it profitable.
For example, perhaps you have a real estate agency and you have a mission to bring home ownership to low-income families. As wonderful as that goal is, you won’t be able to reach it for long if you give away your services for free to make home buying more affordable. You need to find other ways to make your dream happen.
2. Develop a Forward-Thinking Financial Model
So many of the most successful businesses have reached their heights because they were investing in the future. Look at Apple’s history, for example. They developed their reputation making desktop computers, but they were constantly researching how computer usage would shift and invested in technology to fit that usage.
You need to do the same. Within your financial model, don’t focus solely on existing in the moment. Align your profits by investing in the business and finding room for growth rather than merely sitting on sky-high reserves in the bank.
3. Diversify Your Revenue Streams
Diversifying is one of the most well-known ways to make your business successful, but there are tricks involved. Imagine that your favorite fast food restaurant decided to open a pediatric clinic, too.
Sure, those are two diverse income streams, but suddenly you no longer feel like you understand their brand. Worse yet, it could look like the brand is now trying to profit off of the childhood obesity that it has contributed to.
The key is to diversify in very calculated ways. First, your new revenue stream needs to either reach a market you haven’t reached in the past or break into an industry that has strong potential.
Second, your diversification needs to make sense with your brand. Either your new revenue stream must be consistent with the brand you’ve already developed or you need to create a whole new brand within your company. Consider Athleta and Banana Republic for instance: one sells athletic wear, the other sells sophisticated casual wear, and they both brand themselves independently, yet they’re owned by the same company.
4. Identify Your Niche
Sometimes the most difficult questions are the simplest ones. How would you answer if a customer asked, “Why should I choose you instead of your competitors?” You need a far better answer than, “We’re better than they are,” because that’s merely a matter of opinion.
You need to find that specific gap in the market that your competitors don’t fill. That’s the area where you should nestle in and begin to build your business. As you grow and develop your own reputation, you have the capacity to compete within your industry and expand to add the more general products your competitors offer.
When you identify that niche, it should be front and center in your marketing. You can’t have customers assuming you’re just a lesser-known (and lesser-trusted) version of the “big guys.” You need them to know why you’re in a class all your own.
5. Choose the Right Experts
The term “jack of all trades” is a common phrase that is often misused because people forget the second half. The full phrase is, “jack of all trades, master of none.”
No one in the world is an equal expert in every aspect of running a business, from finances to marketing to product development. Many entrepreneurs try to save money by taking a DIY approach and handling everything themselves, but this could cost you more money than it saves.
Take marketing, for example. If you’re not a marketing expert, you could waste thousands of dollars on ineffective ads before you finally find an approach that works. Worse yet, you could waste so much money that you go out of business before you find an approach that works.
Alternatively, you could hire a marketing consultant. For just a few weeks or months of pay, they’ll be able to dig into your customer base, find the ideal messaging and brand positioning, identify the most cost-effective advertising strategies, and more. This is far more cost-effective than a trial and error approach.
You don’t only need to bring in the right experts, though. You also need to let them do the job you’re paying them for instead of micromanaging or overriding them. The same applies to your staff. If you trusted them enough to hire them, you should trust them enough to listen to their expertise.
Build a Successful Business from Day One
No business has pure, complete success. Every entrepreneur has setbacks, struggles, and losses. The key to building a successful business is to use strategies that let you survive those bad days.
The tips above will help you take a more calculated approach to building your business and relying on the feedback of those who have come before you. They help you set up your business not only to survive any economic climate, but to thrive and make the most of any fork in the road.
Want more ideas? Check out this blog for 5 Ways You Can Future-Proof Your Business.