A lot of would-be entrepreneurs do not fully appreciate what it takes to build and manage a successful online business.
The common assumption is that you need a groundbreaking idea and lots of luck. But if I've learned one thing in the two years (since I started building my own online business), it is that entrepreneurship is not quite as glamorous as some might have us believe.
But that is not a bad thing by any means. For every Facebook and Pinterest there are literally thousands of less "cutting edge" businesses providing their owners with a very comfortable living. Consider my business for instance; based upon freelance writing and a blog that helps people to quit their jobs and build a successful online business. It's nothing new, but makes money nonetheless.
In reality, there are just a few common sense principles that you should to apply to your own fledgling business to boost its growth exponentially. In this post, you'll learn about those principles in detail.
1. Identify Your Unique Selling Proposition
Running a successful business is not wholly about what you do or sell, but also how.
Take for instance WooThemes: a business that develops premium themes for the WordPress Content Management System. Do they create good-looking themes? Yes -- but so do many other premium theme developers our there.
The reason I love WooThemes so much is because they have a great reputation and offer great support. Although they sell great products, it is their service and reputation that gives them a cutting edge over the competition. In an extraordinarily crowded market, that is what sets their business apart.
You can have the same idea as someone else but just execute that idea more effectively, or in a different way.
This comes back to my original point that you do not need a groundbreaking idea in order to establish a successful business. You can have the same idea as someone else but just execute that idea more effectively, or in a different way. If you make yourself different from the competition, you don't really have any competition (at least, for that specific part of the market that you are targeting).
That is what I had in mind when I created my guide to freelance blogging. I knew that there were plenty of writing guides out there, but I felt that if I appealed to a specific segment of the market (i.e. aspiring freelance bloggers) that I could attract customers. Six months of steady sales have vindicated my original assumption -- by marketing to a subsection of a crowded market, I was able to create a successful product.
The important thing is to ensure that you have a unique selling proposition. If you do not, your business will probably flounder or fail. If you think that you have a unique selling proposition but your profit margins are telling you otherwise, you probably don't. It may be time to rethink the shape of your service(s) or product(s).
2. Focus on the Fundamentals
You have probably heard of the Pareto Principle: the idea that 80% of effects come from 20% of causes.
While the ratio may not always be so exactly aligned, the principle is almost always correct. And online business is no exception -- in fact, the Pareto Principle is probably more important to online business owners than most.
Why? Because there is so much scope and so many distractions. On any given day you can spend hours on email, social media, reading blogs, and perhaps even playing online games. While some distractions plainly offer no value, there is an awful lot you can do in the name of "business management" or "business development" that has no real positive effect on your bottom line.
A successful business is often defined by how well you and your team (if you have one) focuses on the key fundamentals that drive the growth of your business. Consider for example my recent article on How to Build an Online Business from the Ground Up -- it focuses on the key elements that are required in order to create an online freelancing business and pushes everything else into the background.
You must test and observe your actions in order to ascertain what really makes a difference to your business, but here are some ideas:
- Focus the majority of your social media efforts on the platform that offers the greatest number of referrals and/or conversions.
- Channel your guest posting budget into PPC if you are experiencing superior results.
- Improve your product's core features rather than creating new ones for the sake of it.
- Spend less time on minor tweaks and more time on big picture improvements.
The possibilities are endless but it is up to you to discover what fundamentals drive your business. Only then can you direct your energies in a more efficient manner and get better results.
3. Embrace Modern Marketing Methods
As an online business owner you are likely to be familiar with the concept of inbound marketing, but perhaps you have not fully embraced it. That is likely to be to your detriment.
The scope of inbound marketing over "traditional" advertising is truly astonishing. There are countless examples of startup businesses that have grown exponentially due to little more than a guest posting campaign. Buffer is a great example of this -- for a long time you couldn't swing a cat around the blogosphere without hitting a guest post by the prolific Leo Widrich, including posts he's written for us here on FreelanceSwitch.
But guest posting is just one example of how you can successfully utilize inbound marketing. Consider how Pat Flynn of Smart Passive Income utilized Facebook, YouTube and Podcasts to grow an enormous following. He leveraged platforms that already had huge existing audiences in order to place his content in front of those looking for it, and it didn't cost him a dime in advertising payments. That is the power of inbound marketing.
If you have a good product or service then you have no excuse to fail -- your success will be driven by (a) how well you identify where your target customers hang out and (b) how you reach out to them.
4. Don't Plan For Failure
In one of my favorite books for online startup business, Rework, there is a chapter called "Planning is Guessing." In it the authors turn the concept of planning on its head and argues that trying to predict too much too soon can be detrimental to the future growth of your business.
Don't get me wrong -- I am a huge fan of planning and goal setting. But any plan or goal that you set must be approached with the attitude that it is subject to change at any time. As it says in Rework:
...you have to be able to improvise. You have to be able to pick up opportunities that come along. Sometimes you need to say, "We're going in a new direction because that's what makes sense today."
In setting rigid plans you are setting yourself up for failure, because between the moment you finalize that plan and the point of execution there are likely to be changes, both internal and external, that require an adjustment in approach. In reference to the superb book The Lean Startup, this is the point at which your business should "pivot," not stick resolutely to a plan that has been made redundant by continuously developing circumstances.
So plan by all means -- create plans that utilize what you know and what feels like the right thing to do at that time. And then when circumstances change, adapt your plans to suit.
5. Be Ruthless
There are two sweet spots in a business' lifecycle:
- Startup Mode: when you have enough capital in reserve to build a business without compromise.
- Profit Generating Mode: when you have enough capital in reserve to build a business without compromise.
I'm sure you can spot the common denominator here -- money. If you have money then you can afford to be ruthless. If you're ruthless then you'll have a far better chance of taking your business to the next step. If you're fearful of what your actions could result in then you won't make the most effective choices.
Let me approach this from my perspective as a freelancer. Over the past several months my income has grown large enough so that I can be more careful in picking my clients. I am in a position where prospective clients approach me, which puts me in a far greater position of power compared to if I were approaching them. In short, I can afford to be ruthless. I can re-shape my business to focus on the areas that are most important to me and only take on new clients if I feel that they bring something more to the table (in terms of income, exposure, etc.) than the clients that I already have.
No business has been successful by trying to please everyone all the time. Your success shouldn't be defined by trying to keep everyone happy -- it should be defined by how happy you keep your target customer or client base. Your focus should be on what your business can do for your clients and customers, and no one else. So don't be afraid to cut the rest out of the equation.
It is in attempting to cater for the masses that a business generally fails to cater for anyone. Don't make that mistake.
6. Seek Out Growth
Many small business owners fall into the trap of merely running their business, rather than growing it. This can creep up on you in such a way that you do not even realize it has happened, but it only takes a moment to spot. Just follow this quick exercise: write down everything you have done in the last week that will have resulted in growth for the business.
Here are typical day-to-day actions that do not result in business growth:
- answering emails
- managing social media
- doing client work
And here are some actions that can result in business growth:
- publishing and marketing an infographic
- expanding your product line
- creating a new service
I personally recommend that you spend at least 20% of your time (inspired by Google) on growing your business rather than simply managing it. Any less than that and you could find that your income stagnates and you start to get jaded by your work. And if you feel that you do not have enough time in order to work on business development, you must make sacrifices in terms of management. Fire a couple of clients, reduce your product range, hire another member of staff -- whatever it takes to give you (i.e. the key stakeholder and brains behind the operation) the time to work on growing your business.
It may seem that firing clients or reducing a product range would result in the opposite of business growth, but let me refer you back to the Pareto Principle. I am not saying you should dump your best-paying client or your most profitable product -- instead separate the chaff from the wheat and discard it. Then work on producing more wheat.
In terms of encouraging growth I heartily recommend that you create or join a mastermind group. I have found them to be incredibly helpful in terms of ensuring that I am not simply treading water with my business, and it never hurts to get fresh eyes on your plans.
7. Review Your Business Processes and Workflow Periodically
This final principle is of vital importance and ties in with all of the six that have preceded it.
Why? Because even if you absorb and adopt all of the principles laid out above, there is little to stop you from slipping into old habits a few weeks or months down the line. That is why you must carry out periodic reviews in which you analyze every aspect of your business to ensure that you are still on the right track.
In simple terms you should work through each principle and ask yourself the pertinent questions:
- Does my business have a unique selling proposition?
- Am I focusing on the fundamentals that drive business growth?
- Am I embracing modern marketing methods?
- Are my plans flexible and subject to change? Moreover, do they need to be changed?
- Am I being ruthless in terms of managing and developing my business or am I governed by fear?
- Am I dedicating at least 20% of my time to business development?
These are the key questions, based upon the key principles, that will drive your business' growth. How often you ask these questions is entirely up to you -- it might be once per week or once per month. Alternatively, you might ask some questions on a weekly basis, others every month, and then instigate a more thorough review every quarter. The value of how regularly (and in what format) you carry out the review process will be individual to your business, but you must have a review process in place.
Above are the seven principles that have driven my business' growth over the past couple of years, and I know that similar approaches have worked very well for others (as outlined by the real life examples I have included above).
Photo Credit: seeveeaar.