Ever wish you could pick the brain of a small-business growth expert?
As a business owner, you're probably too busy to do that. So we did it for you. In a conversation with professors at the University of Cincinnati's Small Business Institute (SBI) we discovered that there are three key things you can do to move from startup to upstart (catchy, right?):
- Identify your target audience.
- Know when to pivot.
- Skip the normal growing pains.
Read on to learn how the experts recommend you grow your business.
Lesson 1: Know Your Audience
When he consults with clients,
SBI director Dr. Tom Dalziel
finds himself repeating this mantra: know your audience.
Many business owners dream of having a product or service that appeals to everyone. But, he says, that's not realistic.
"A shotgun approach," Dalziel cautions, "leads small businesses not to get rooted in any particular market." And that's a problem.
Take the example of
Physi, an app to help people find workout partners. Dalziel recently worked with Physi's founder Matt Vorst
to pinpoint its target audience.
Turns out, Physi is perfect for college students. With SBI's help, Vorst launched a survey of 700 college students to find out what they thought of the app. After analyzing their feedback, Vorst and the SBI built a marketing strategy that better appealed to them.
A shotgun approach means not getting rooted in any particular market.
The takeaway: "Align with your audience," Vorst says. Know who will use your product. Find out what they want. Market to them. (For tips on marketing as an IT business owner, check out our blog post "Don't Call it Marketing (Call it Relationship Building.")
Lesson 2: Know When to Pivot (and When Not To)
As a business owner, you will at some point have to decide whether it's worthwhile to shift your business in a new direction. That move – a pivot – is hard to pull off. It's brilliant when it works and a total failure when it doesn't.
Steve Jobs famously directed Pixar studios to stop building computers and start making movies. That was one of the brilliant ones. But things don't always go so well.
When it comes to pivots, Dalziel says businesses should live by the old adage "a bird in hand is better than two in the bush."
Price Dynamics, a company that aggregates data to enable price comparison on metal purchases, enlisted the SBI's help to evaluate a pivot opportunity. The SBI performed a study to see if Price Dynamics should develop a new price benchmarking tool. The results came in and the study said, go for it.
Price Dynamics President Trevor Stansbury
says that thanks to the SBI's advice, his company saw that the benefits of a new metal pricing tool would outweigh the costs. The company jumped on the opportunity.
The takeaway: "Pivot," Dalziel advises "when a solid offer is in hand." Weigh the costs and benefits to makes sure a major change is worthwhile. In other words? Don't trust your gut. Get facts.
Lesson 3: Skip the Small Business Teenage Years
Remember your "awkward years?" Unfortunately, there's a business equivalent to wearing braces and playing Magic: the Gathering in your friend's basement.
Many small-business owners focus so much on growing, marketing, and revenue that they neglect other parts of their business, including two of the most important: HR and IT.
When HR is lacking, new hires might not want to stick around.
Sure, you don't need fulltime human resources staff when you only have one or two employees, but as you grow, if you don't invest in proper HR (either in-house or outsourced), you can run into problems.
"New hires might not want to stick around," Dalziel warns. And if you're always playing catch-up, it's exhausting.
As a technology company, you may assume you're ahead of the curve when it comes to IT. But are you? Remember that technology goes beyond the work you do. You may be able to strengthen and streamline your business with apps for bookkeeping, intra-office communication, invoicing, and more.
The takeaway: Remember that growing pains are normal for small businesses. They're a sign that your company is maturing. But recognize them for what they are and know that you can take action to get past them as quickly as possible.
Additional Resources for Small Businesses
- The Small Business Institute helps Cincinnati-area startups and small businesses. If you're in the Cincinnati area, you can fill out their application for small business counseling.
- If you have questions about small business insurance, be sure to check out TechInsurance's resources page.