Approximately 50% of businesses in the United States fail within their first 5 years. That’s an alarming statistic for any business owner, even if they’ve passed the 5-year threshold. What causes all of them to fail?
Sometimes there are market trends that work against them. Some failed businesses can genuinely be chalked up to poor timing, unfortunate economic changes and a slew of other reasons that are just outside of their control.
Yet, the majority of businesses fail because of things they can control. An extensive Gallup study of 4,000 entrepreneurs discovered that the reasons why businesses fail usually boils down to the person who started the business. They then broke down the traits of successful freelancers to provide stat-backed abilities and tactics to take action on right now.
I’ve taken those entrepreneurial tactics and talents and broken them down into six achievable milestones to help keep you focused and on track. Along the way, you’ll be taking action on tactics needed in a successful business.
1. Establish a Profitable Business Model
A business model should be considered a comprehensive story that tells the tale of how your entire business works. The story should focus on three core questions:
- Who is your client?
- What does your client value?
- How do you deliver that value at the right cost?
All of those questions add up to creating a profitable business model. If you nail those questions, you’ll have the story of a business that makes everyone involved tons of money.
You’ll need to become a critical thinker.
Set aside some time to formally write a fully-fledged business model. It’s the first and most important milestone that you must reach. Here’s one easy system for creating a rough business model, although there’s endless ways for you to create your own model.
2. Get Your First Repeat Client
Your next milestone involves that sweet, sweet exchange of currency. Landing your first repeat client will give you confidence in your business and the motivation you’ll need to keep going.
The key word here is “repeat”.
I spent my first several years as a freelance writer doing one-off projects for clients, and then they’d disappear and I’d just let it happen. Now, I mainly work off of maintenance agreements, but if a client starts to fade-away, I just send them a quick message to check in. Sometimes that’s all it takes.
You may earn that first repeat client through personal recommendations, an existing contact or cold calling. Landing your second repeat client will take understanding exactly who they are and where they spend their time – both online and off.
Related: Find and land anchor clients
3. Create a Realistic Marketing Strategy That Can Scale
Marketing is the lifeblood of your business. Businesses owners sitting around waiting for clients to call are destined to fail. Marketing can actively bring in new business.
There was a time when businesses would hire a marketing firm to handle everything. While many still do this, and you can if you have the budget, it will benefit most entrepreneurs to tackle as much of the marketing as they can and outsource once they know what works.
Delegation and determination are two of key “talents” of entrepreneurs strengthened by taking an active role in your marketing campaign. You’ll have to learn the new tools that make it all possible, and put in regular time to market your business.
Once you understand the tools at your disposal, create a scalable marketing strategy around them. Scalable means that you can amplify the effect without amplifying the costs by the same degree.
Taking advantage of internet marketing techniques and working with the right people will help you create a marketing strategy that you will take to the bank.
Related: Check out these hot marketing trends
4. Hire and Train a Solid Team
Starting off as a one-man operation, or solopreneur, is great. However, with the exception of a few lucky business models, it will only get you so far.
You’ll need to hire and train a team. This exciting milestone will grow your business by leaps and bounds
Put in the time to create a stellar employee training program before you even hire your first employee. Instead of stumbling through it, and possibly wasting your time, energy and money with the wrong people.
You can also test the waters by hiring a virtual assistant. They can take a lot off your plate without being a formal team member.
A virtual assistant can help you establish that highly sought after work/life balance that all entrepreneurs need.
5. Gain Authority in Your Industry
At this point, you’re making money and you have a great team in place. Your next milestone is to become the authority in your industry.
Even if your business doesn’t exist entirely online, the Internet is your fastest route to becoming an authority. Create the type of content that your industry needs and will appreciate, and give it away for free. Your peers will see that you are clearly knowledgeable, and over time, you’ll become an authority.
Along the way, become involved in local events that allow you to speak about what you know. You may even wish to seek out speaking events and industry-wide conventions.
Coupling speaking engagements with stellar online content will turn you into a true authority.
6. Reach a Significant Number of Sales
If you’ve developed a profitable business model, created a scalable marketing strategy and found the perfect team – you’re on pace for lasting success. The final milestone to is to reach is a significant number of sales.
Set a specific goal for sales. Without a goal, the business will stagnate. Having a goal will help to continue moving toward your target growth.
Determine an ambitious, yet achievable, dollar figure for your business. Only you will know what number to set as your target, but once set, make sure everyone on your team knows about it. Make it something you strive towards together.
You Can Be the Successful 50%
Your business can be one of the 50% that makes it past 5 years, and then onward to 10, 20 and 100 years. You’ll need to work in milestones and goals to keep you and your team focused, but it’s possible.
Along the way, you’ll become confident, business focused and a skilled promoter. All of which are essential skills of successful entrepreneurs.