How to Run a Small Business: A Complete Guide
Sometimes it feels like you have the bricks to build your business, but you’re missing the cement to hold it all together.
Learning how to manage a small business is challenging. It requires a lot of skill and dedication. Here’s a walk-through guide for entrepreneurs on the basics of how to start and run a small business.
Refine your idea
First off, you’ll have to refine your business idea. If you don’t have an exact business idea in mind, you might want to consider the type of sector you’ll enter, whether it be hospitality, retail, IT, manufacturing, education, or finance.
If you’re particularly business-minded and profitability is your main priority, you may be slightly more flexible with the direction your business goes. You could also filter business ideas by budget. We have dozens of business ideas if you’re searching for businesses you can start with £10k, or businesses that cost £50k.
Another idea is to think about the customers you’d like to serve or the people you’d like to work with. Perhaps you already work with a certain clientele and you’ve noticed a gap in the services available to them. Why not capitalise on that and start a business that fulfills their needs?
Customer research
Once you have an idea in mind, conduct thorough customer research in order to decide whether your idea is viable. You’ll want to establish the following:
- Whether your business is needed
- If your products or services are in demand
- Secondary additional uses for your product, in order to reach as many markets as possible
- Industry and sector standards
- Consumer expectations for your product
- How much money customers are willing to pay to access your product
Getting an understanding of your customers’ needs is vital in order to fulfill the basic demand and supply business. You might collect your voice of customer (VoC) data by conducting customer surveys, focus groups, and gathering opinions from social media.
Detailed consumer research will provide a better overview of how to navigate your company in its early stages, and improve customer experience as your business grows and develops.
Do a competitor analysis
A competitor analysis is essentially a SWOT analysis of other rival companies - Strengths, Weaknesses, Opportunities and Threats. It’s the process of studying your competition’s operations to view and compare how you can perform in the same marketplace.
Typically, you will perform a market and competitor analysis while writing your business plan. You’ll want to explore the following features of your competitor’s business:
- Size
- Business model
- Market share
- Product line
- Growth
- Reputation
- Marketing methods
- Target audience
Decide on a name
Your business name is its primary identifiable feature, so it’s important to pick something that’ll resonate with your customers.
Pick a name that’s searchable online. Your company name should be as original as possible, firstly for legal and trademark purposes, but also so customers can easily find you online.
You’ll want a name that’s SEO friendly, and available on multiple social media channels. Your name doesn’t have to have to explicitly say what your products are, but keeping it similar and relevant is recommended.
For example, if opening a business that sells ultra-quiet electric fans, calling it ‘Quiet Fan’ would probably make ranking on Google pretty difficult. If you name your company ‘Silent Night’ or ‘Cloud 9’, there is a much higher likelihood of your customers finding you if they know your brand name.
Draft business plans and strategies
A business plan provides your business with a clear direction and outlines your objectives, and the methods for how you’re planning to achieve them. Writing a business plan is often an eye-opening experience for aspiring business owners as accurate, detailed plans require you to look at precise numbers and deadlines and reveal whether or not opening their business is realistic.
Business sustainability strategy
It’s a good idea to implement a business sustainability strategy from the beginning, if that’s something you care about. This strategy should be parallel to, if not an aspect of, your main business strategy. In 2021, 63% of customers are more attracted to businesses that care about the environment and other social issues.
Business competition strategy
A business competition strategy will define a business’ approaches to marketing, branding, and pricing. Expert strategists Wiersema and Treacy say that if a company attempts to pursue multiple competition strategies at once, it is likely to end up stuck in the middle, offering average products for average prices.
Decide on a set strategy and follow it well, as no company can be all things to all people. Businesses must find the unique value that they alone can deliver to a chosen market. Treacy and Wiersema’s three suggested ‘Value Disciplines’ are operational excellence, product leadership, and customer intimacy.
Finance and investment
Getting a small business loan can accelerate the growth of your SME. Loans allow for improved cash flow, which lets companies take advantage of business opportunities and execute plans sooner than they could without additional funding.
Depending on your eligibility, your lender, and the reason you applied for a loan, money can be spent on a variety of things. Typically, loans are spent on branding and marketing, new point of sale software, or hiring new staff. Rather than growth, other common uses for loans include paying off debts, unexpected business expenses, emergency repairs, and investing in trades and stock.
Money management
Maximising revenue and reducing expenses is the key to success for all small businesses. The higher your profit margins, the more capital you will have to sustain and develop your business.
Rather than constantly looking for ways to keep earning more, it’s useful to look at cost-saving ideas. A lot of these ideas appeal to your sustainability strategy too, so they’re a win-win for your pocket, and the environment.
Equipment
- Use energy-efficient equipment that uses less electricity
- Turn off equipment at the end of the day, or put in ‘sleep mode’
- Use pre-owned or repurposed equipment
Operations
- Improve your bookkeeping, and consider using accountancy software
- Reduce shrinkage with stringent inventory management
- Reduce staff costs with better scheduling and by lowering turnover
Learning how to categorise expenses for your small business will give you a better insight into your expenses and spending.
Brand awareness
All businesses need a growth strategy if they want to stay ahead in today’s competitive market. The strategy that works best for you depends on your business and customers.
Brand
Establishing a definable and recognisable brand is essential in order for a business to succeed. Your brand covers business’ visual identity, its branding, logos, merchandise, and colour palette. Your brand dictates how you communicate with customers, your tone of voice, your position on social issues, and the types of platforms you trade on. Branding is extremely important in helping businesses form genuine connections with customers. Most businesses fit into a brand personality archetype, which informs their marketing strategy.
Marketing
Marketing is incredibly useful for reaching more customers and increasing sales. Most marketing campaigns include the Four Ps of Marketing: Product, Price, Place, and Promotion.
When marketing a small business on a budget you’ll want to consider including:
- A situation analysis: SWOT of your business’s current situation.
- Your target audience: Buyer personas - what do your customers want, what they’re missing and how to meet their demands.
- SMART goals: SMART stands for specific, measurable, attainable, relevant, and time-bound.
- Your tactics: Targeted sales, new loyalty schemes, refer a friend programmes, email outreach, expansion to a new social media platform, becoming omnichannel, etc.
Organisation and growth
Implementing an organisation plan from the beginning will save a lot of un-learning and re-training down the road. If your budget allows, the best way to ensure your business is organised is to invest in the best, dedicated technology and devices for your business. There are online systems that help entrepreneurs navigate sales, employee scheduling, taxes, marketing, inventory, customer communications. Keep reading to learn more about how all of these tools, and more, are available with Epos Now.
Invest in the right technology
For improved efficiency, invest in dedicated point of sale (POS) software and hardware. Epos Now offers 100s of integrations, equipping business owners with the tools and information they need to succeed in a busy marketplace.
Add or remove whatever integrations you feel are necessary for your business. At Epos Now, we place control back into your hands by allowing you to hand-pick the apps and features that you want to pay for and use, to suit your budget.
Our top picks for small businesses:
- Epos Now Website Builder, where you can create your own e-commerce or informative website.
- Accountancy and bookkeeping apps that sync directly with your POS information. Sales and expenses are linked into your apps, providing you with accurate, up to date financial information.
- Detailed sales performance reports that can be filtered by time, product, or teller.
- Payroll and scheduling management at the touch of a button. Quickly glance at your sales reports in order to check your peak times, and never face high labour costs again.
- Inventory management: automatically re-order stock once it hits a certain level and review how well individual items are selling. Better yet, link your inventory management to your POS and have your stock automatically update with every sale.
- 100+ apps and integrations