Key Insights for Small Business Owners: Essential Knowledge for Success
Being a small business owner today can be a rewarding experience. Thanks to the rise of the digital landscape, you can access consumers from across the globe, alongside benefitting from tech tools that boost efficiency. Nevertheless, finding success can still be quite challenging.
As with so much in life, knowledge is key. This doesn’t necessarily mean you need to head out and get a master’s in business administration. Rather, you must have a good understanding of some essential principles and why they can impact your company’s trajectory. So, we’re going to explore a handful of areas you should get to know better and start implementing.
Prioritize Staff Engagement
Even as a small business, your staff will be among your most valuable resources. It’s in your best interest to keep them engaged, which can boost not just productivity but also satisfaction and retention.
Some aspects to focus on here include:
- Fair pay and benefits: The most basic way to help keep your staff engaged is to ensure a fair pay and benefits structure. This should include salaries that are at least in line with averages for your industry and each role. You must also set up a measurable and transparent evaluation structure for informed raises. Alongside benefits like healthcare and 401(k) matching, extras like subsidized local gym memberships that support worker well-being can be positive.
- Development: Another way to keep workers engaged is to invest in their professional development. For small businesses, this can begin with getting to know what directions your staff would like to professionally progress in and train them in the skills for these. As your company grows, you could consider subsidizing eLearning courses and industry certifications. Not only does this engage your staff, but it opens your company up to a more diverse range of skills.
Additionally, take the time to assess staff engagement at least a couple of times a year. This may be providing them with anonymous surveys on how they feel about their time with your business and what would make a difference to their satisfaction levels. This enables you to collaborate on changes or additions that help everyone to thrive.
Track and Respond to KPIs
Seeking a better understanding of your company’s performance is crucial to its success. The better data you have on operations, the more empowered you are to make informed decisions. This is where tracking your key performance indicators (KPIs) comes into play. These are measurable metrics that enable you to see how effectively you’re moving toward your business’s short and long-term goals. They can also highlight where there may be consistent inefficiencies that impact your performance.
Some of the most important KPIs to track include:
- Total and qualified leads: Understanding the total number of new leads gives you a good overview of how impactful your marketing is in drawing attention. Knowing the qualified leads number lets you know how well you’re hitting demographics that have a likelihood of engaging with your business. Indeed, establishing the ratio between these two lead types can show you how efficient your marketing is and whether you need to make improvements.
- Total labor ratio: This KPI gives you insights into your company’s productivity. It simply involves dividing the total cost of labor by the revenue your business has brought in. As this includes the payroll of all staff across the organization, you get a better picture of the wider efficiency. This shows you whether you need to make adjustments to boost productivity in ways that justify the payroll outlay. In efficient organizations, it can also highlight if there is space for company-wide pay increases that might influence engagement.
Remember that we live in a technologically advanced business landscape. One of the ways technology can help small business operations is by improving access to data, including your KPIs. There are KPI tracker dashboards available that you can tailor to automatically collect and report on the specific metrics you want to monitor.
Once you have this data, it is important to respond to it. Work with your staff in reviewing what the information means. You can then collaborate on the most productive ways to make improvements.
Be More Sustainable
Sustainability is an increasingly vital characteristic in small businesses right now. This isn’t just because all companies have an ethical duty to minimize negative environmental and social impact, though that is vital. Sustainability can also influence your small business’s success and growth.
This is because consumers are more environmentally informed, to the extent that many are making purchasing decisions based on the brand’s commitment to sustainability. This could not just affect individual purchases, but also long-term loyalty. Sustainability can affect staff engagement, too. A recent Deloitte report — titled Engaged Employees Are Asking Their Leaders to Take Climate Action — found that 27% of workers have considered switching jobs in favor of a more sustainable employer.
As a result, it’s essential to adopt sustainable actions that go beyond carbon off-setting credits. This can include utilizing renewable energy sources, either by buying electricity from renewable providers or utilizing solar panels on your business premises. Circular economy practices — such as reducing waste production and returning materials to the earth through methods like composting — are also positive steps. Collaborating with partners in your supply chain to agree on environmentally friendly and ethical practices makes your company and the industry more holistically sustainable, too.
Avoid Compliance Issues
Even relatively small errors in your regulatory and legal responsibilities can see your company facing fines from authorities and lawsuits from those who may have been victims of compliance breaches. You should, therefore, put practices in place to avoid potential issues. Some of the general areas of compliance all businesses need to be cognizant of include the following.
Safety
Maintaining a safe environment protects your company from accident lawsuits by consumers and worker compensation claims. It’s vital to perform regular safety inspections of your environment. This should include assessing for obstructions that inhibit safe navigation and the responsible storage of hazardous materials, among others. You should also ensure managers review the Occupational Health and Safety (OSHA) requirements for your type of business and assess whether appropriate measures are in place. For instance, if there aren’t enough trained first responders on staff, arrange for employees to attend courses.
Bookkeeping
Your financial records are an invaluable tool for compliance. Even if you don’t operate in a regulated financial industry, you still need to conform to local and federal tax laws. Navigating tax season can be challenging if your records aren’t up-to-date. Therefore one of the basic ways to support compliance is to adopt strict bookkeeping and accounting practices. As a small business, utilizing automated bookkeeping software that maintains your records can be a useful tactic.
Conclusion
Building a successful small business requires consistent attention to several areas. This includes gaining and using KPI data, alongside adopting transparent sustainability actions, among others. It’s also important to regularly assess the efficacy of these protocols, too. Not every business has the same shape, goals, or environments. By tailoring your approach to the specifics of your company and adjusting as you develop, you can give your business a good framework to build its success upon.
Featured image by Fox
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