The most seasoned entrepreneurs know that running a business is a marathon, not a sprint. In order for your business to last the race, you must invest in a strong foundation and good habits.
Throughout this guide, we'll explore a variety of tips and strategies to help you navigate the challenges that come with starting and running a business, such as creating an effective business website, securing financing and managing your team.
By implementing these suggestions and staying committed to your vision, you'll be better prepared to overcome obstacles and succeed in the long run as a small business owner.
How to run a business: 10 tips for success
01. Turn your ideas into action
Every business is born from an idea, but not all ideas have the same potential. Some ideas may be too risky. While others may be too shortsighted.
That’s why one of the first steps in learning how to start a business is learning how to separate the wheat from the chaff. Start by looking for inspiration in areas that are familiar to you:
Personal interests or passions: Transforming your passions into a business allows you to leverage your enthusiasm and expertise in a niche market. By focusing on areas that genuinely interest you, you're more likely to remain motivated and connect with your audience.
Professional experience: It goes without saying that drawing from your past work experiences or industry knowledge can give you a leg up in understanding your niche wants and/or developing a unique product or service. Start with what you know before branching out into other areas.
Trend and competitor analysis: Keep an eye on emerging trends and look for opportunities to position yourself at the forefront of change. This can help you to capture early adopters' interests and gain a competitive edge.
Consumer research: Take the time to talk with experts in your industry, plus the people that you’re looking to serve. Get their feedback on your idea, and use it to refine your vision.
02. Create your business plan
Once you’ve identified a promising business idea, a business plan can help you clearly define your long-term goals and gameplan. You should be able to reference this doc to keep your team on track, as well as explain your vision to potential investors.
A solid business plan consists of these sections:
Executive summary: A concise, persuasive overview of the business plan that enables readers (such as investors or potential partners) to quickly grasp the essence of your venture.
Company description: An outline of your business's background, including your mission, vision, early achievements, unique strengths and competitive advantage.
Products and services: A detailed explanation of your offerings, proof of concept, visuals and pricing plans—with the goal of showcasing your unique selling points and the value you bring to the market.
Market analysis: Research on your industry, competitors, barriers to entry, target market and your business's position within the market.
Marketing and operations plans: Details on how you plan to reach your audience via branding, advertising, promotional activities and fulfillment strategies.
Management and organization: A description of your venture's legal structure, key personnel and other stakeholders.
Financial projections: An estimate of initial investment, funding needs, profit timelines and financial management practices. (These projections help you to evaluate your venture's financial health and long-term potential.)
03. Consider an exit strategy
Do you ultimately dream of selling your business, merging it with another company or passing it on to a successor?
While it may seem counterintuitive to think about your exit strategy before your business has even taken off, envisioning your endgame can help you make more strategic decisions.
An exit strategy also forces you to anticipate market changes, industry trends or personal circumstances that may impact your exit from the business. It additionally plays a crucial role in attracting investors or potential buyers by demonstrating a clear plan for delivering returns on their investment.
Keep in mind that an exit strategy doesn’t mean you necessarily have to go through with it. Think of it as a contingency plan—by having a planned exit, you can reduce potential losses if unexpected challenges arise or if the business doesn't perform as expected.
04. Set your budget
It’s always helpful to create a detailed budget that factors in your startup costs, ongoing operational expenses, marketing costs and more.
To accurately assess how much money you’ll need to run your business, you’ll need to know your break-even point as well—that is, the point at which your business's total revenues equal its total expenses, indicating that you have neither made a profit nor incurred a loss. Knowing this figure gives you a baseline for understanding how many products or services you need to sell to cover your bare minimum expenses.
Once you’ve calculated your break-even point, you can:
Set the minimum sales volume needed to cover your costs
Evaluate the profitability of your offerings and create pricing plans
Identify opportunities for cost reduction
Assess how feasible your business model is
05. Choose a bookkeeper or accounting software
If accounting isn’t your forte, then it’s especially important to invest in a bookkeeper or accounting software from the get-go. Both can help you keep accurate records, comply with legal requirements and analyze your finances properly.
Accounting software can serve as highly convenient plug-and-play solutions, helping to automate routine tasks like invoicing and payment reminders. However, you’ll need some basic bookkeeping knowledge to get the most out of these types of software. So, if you’re not sure where to start, it might be better to hire a part-time bookkeeper.
Did you know: Wix offers integrations with popular accounting apps, as well as powerful reports and analytics to keep your finances organized.
Bookkeepers can offer their expertise in financial record-keeping and accounting principles. They can streamline workflows and advise you on ways to better manage payroll services (among other things), ultimately providing personalized attention. Submitting the wrong tax records can cause all sorts of problems, so it’s best to get this right first time by someone who knows what they’re doing.
06. Secure financing for your business
When it comes to financing your new business, there are several options worth considering:
Personal savings or contributions from family and friends. This allows you to retain full ownership and control over your business.
Traditional bank loans or lines of credit, but these typically require a strong credit history and collateral.
Small business grants or government programs that offer financial assistance to startups meeting specific criteria.
Crowdfunding platforms that let you raise capital from a large pool of individual contributors who are excited about your idea.
Venture capitalists or investors who are willing to provide funding in exchange for equity or a share of future profits.
These financing options can help to stabilize your operations or nurture business growth, helping you afford new locations, equipment or product lines. They can additionally assist with cash flow management. No matter how big or old your business may be, you may face fluctuations in revenue that can impact your ability to cover expenses, payroll and investments. By securing extra capital, you can manage your cash flow during challenging periods.
Debt refinancing could also be a valuable strategy if you're looking to improve your business's financial situation. By consolidating existing loans or securing a new loan with more favorable terms, you can reduce your interest rates, lower monthly payments and free up cash for other essential business needs. Just make sure to carefully assess your financial health and have a clear plan in place to manage your debt responsibly.
07. Effectively hire and manage employees
As American author and management consultant Jim Collins once said: “Great vision without great people is irrelevant.”
Inviting the right individuals to join your team is a crucial step in bringing your vision to fruition. Let’s take a look at some aspects you should keep in mind when adding new members to your team.
Define your needs: Before you start recruiting, identify the specific roles and skills that you need in your team—both now and in the long term. Map out the qualifications, skills and experience required to get the job done.
Prioritize cultural fit: While skills and experience are essential, it's also crucial to find employees who fit your company culture. Look for candidates who share your values and work ethic. Strive to build a cohesive, collaborative environment where everyone feels comfortable and motivated to contribute their best work.
Hire for potential: Don't overlook candidates who show potential for growth, aiming to develop a team that can grow and evolve alongside your business.
Conduct regular performance reviews: Give your employees both scheduled and immediate feedback to help with their development. Use performance reviews to set clear expectations, offer constructive feedback and discuss growth opportunities.
Invest in employee development: To attract and retain top talent, show that you're committed to your employees' growth and success. Offer ongoing training and development opportunities, plus encourage your team members to pursue their professional goals.
Establish a clear and fair compensation system for employees: Creating a fair compensation system for employees, including salaries, hourly wages or commission structures, will help attract the right talent. Consider the types of additional benefits and incentives that matter to your staff beyond the essentials, such as health coverage and growth opportunities. By supporting your employees' well-being and achievements with a carefully crafted compensation strategy, you can nurture a driven and loyal team.
Encourage flexibility and adaptability: During the growth phase, you might find yourself shorthanded and needing to wear different hats to keep up with demand. This flexibility extends to your team as well. As your business evolves, encourage your team to be open to embracing new roles, responsibilities and opportunities.
08. Develop a strong marketing strategy
An effective marketing strategy outlines your approach to promoting your products or services to your target audience through both organic and paid means. As you look to formalize plans for reaching your target audience, make sure to take these essential steps:
Analyze your competitors: Understanding the current market landscape helps you see if there’s a blue ocean of opportunities or a red ocean of established players. To conduct a thorough market analysis, identify your competitors. Make a list of your main competitors, both direct and indirect. Analyze their marketing strategies, strengths, weaknesses and customer base to identify gaps in the market.
Perform a SWOT analysis: Gather feedback directly from your target audience through surveys or interviews. Talk to industry experts, study market reports and use other tools at your disposal to identify your business's strengths, weaknesses, opportunities and threats within the market.
Develop buyer personas: Buyer personas are semi-fictional representations of your ideal customers, based on both internal and external consumer research. Creating detailed buyer personas can help you to better define your target audience's needs, motivations and spending power so that you can properfly target your marketing campaigns. It’s helpful to revisit buyer personas, even if you’ve done it when you first launched your business. As your business evolves, your customers’ needs may also have evolved over time.
Consider the Jobs To Be Done (JTBD) theory: As you think of the right way to introduce your product to buyers, heed Harvard Professor Theodore Levitt’s advice that “people don't want a quarter-inch drill. They want a quarter-inch hole.” In other words, focus on the benefits and results that your product helps to achieve—not just the product itself. What are customers actually looking to gain from your product or service, and how do you deliver on that?
Choosing the right marketing channels: Avoid chasing every new and shiny marketing channel, and instead be selective of where you spend your time. Experiment with a manageable number of channels and content types, using clear KPIs and benchmarking your progress towards your goals.
Create a professional website: One of the biggest small business challenges is building brand awareness, especially if you’re fighting for attention on crowded third-party platforms. For this reason, you’ll want to create a website that helps you stay in full control of your branding and the customer experience.
09. Scrutinize the customer experience
Needless to say that in order to win and retain customers, you must deliver a strong customer experience. But the customer experience is influenced by a variety of factors, including the website experience, the experience with your product or service, customer service and more.
In that vein, you’ll want to map out and analyze the customer journey from start to finish. How are people discovering your brand? What do they feel on your site? Where are customers getting stuck, and what questions do they have pre- and post-purchase?
One way to understand the customer journey is by implementing the right Customer Relationship Management (CRM) software to gather data on how customers engage with your business. With the right CRM data, you can:
Personalize your communication: Use CRM software to tailor your messaging and interactions to individual customers to improve the overall experience. McKinsey reports that 78% of customers who received personalized communication are more likely to recommend a brand to friends and family, underscoring the importance of first impressions.
Resolve issues proactively: CRM software can help you identify customer pain points and address them before they escalate. By resolving issues proactively, you can enhance customer satisfaction and reduce churn.
Get ahead of any obstacles: Track customer touchpoints throughout their journey and identify areas for improvement. For example, if you sell products online, keep your eyes peeled for reasons why people may abandon their carts. Test different solutions to potential problems, and use your CRM to gain insight into their impact.
10. Invest in yourself and team
Understanding your target market and sorting out the finances is important for your business, but improving yourself is just as crucial for thriving in a competitive landscape. Beyond your business plan and marketing strategies, there are several ways you can continue to grow professionally so that you can better run your business.
Fail fast, fail often: There’s a great little quote from Little Miss Sunshine from the grandpa to Olive, the granddaughter. In a moment of doubt about the beauty pageant, Olive tells her grandpa she’s scared of being a loser, to which he replies, “A real loser is someone who's so afraid of not winning he doesn't even try.” Mistakes and setbacks are inevitable in any business venture. Instead of avoiding them, embrace a culture of continuous learning—which, in turn, will foster innovation and resilience, preparing your business for long-term success.
Stay informed about industry trends: Stay informed about changes in your market (such as the rise of AI tools for business), emerging technologies and evolving customer preferences. By staying ahead of the curve, you can seize new opportunities and continue to grow and adapt to shifting conditions.
Set realistic goals: Setting realistic, achievable goals allows you to measure progress and build confidence as you accomplish each milestone. When you achieve a goal, take the time to celebrate your success. It’s especially important to celebrate with your team. A little acknowledgement and a “thank you” goes a long way in boosting morale.
Invest in personal development: As a small business owner, it's important to invest in yourself. By focusing on personal growth, you'll become a more adaptable and effective leader. Plus, your dedication to learning will foster a culture of growth within your company, inspiring your employees to seek out new opportunities for improvement, which ultimately contributes to the overall success of your business.
Surround yourself with a supportive network: A supportive network of peers, mentors and colleagues is invaluable. Surround yourself with individuals who believe in your vision and can offer constructive feedback, advice and encouragement. A strong support system can also help you maintain confidence through the ups and downs of your entrepreneurial journey.