Small-to-medium businesses (SMBs) account for more than 99 percent of U.S. employers, yet only half of US companies make it past their fifth year in business. For startups looking to beat those odds, we offer strategies for achieving success, compliments of five CEOs.
1. Make Informed Decision-Making Part of the Company Culture
Cleveland Brown, cofounder and CEO of payment processing company Payscout, encourages employees to challenge old ways of thinking, base decisions on subject matter expertise, and work with different teams to test new ideas. Payscout’s virtual reality commerce app helps merchants authenticate payments via a simple head movement, iris scan, or voice recognition. “We didn’t become the first company in the world to launch a VR commerce payment platform by maintaining the status quo,” Brown says.
2. Tap Partners to Fill Critical Gaps and Scale the Business
Among a SMB’s most pressing challenges is competing with large enterprises for qualified workers. Bigger companies can woo top talent with higher salaries and more generous benefits, and they have the HR budgets and specialists to hone in on the right people.
More than 25 percent of small-business job openings go unfilled in the current employment market, so many SMB executives end up spending an inordinate amount of time doing the work themselves, according to a survey by non-profit SCORE and the U.S. Small Business Administration.
But there’s an alternative to hiring more people or forcing current employees to “do more with less”—and that’s to partner with other companies for everything from sales and marketing to product development and customer service.
Dr. Becky Sage, CEO of Interactive Scientific, says most of the growth at the UK-based edtech company, which has only 14 employees, has come via partners. “We don’t need massive teams right now,” she says.
3. Compete Beyond Availability and Price
Industrial automation has helped even small manufacturers compete on a massive scale. But simply building parts faster and cheaper isn’t a long-term competitive advantage.
For example, when Noble Plastics decided to automate its injection-molding factory with robots, CEO Missy Rogers wasn’t just thinking about operating more efficiently. She also wanted the company’s engineers to spend more time analyzing production data and coming up with new designs to solve problems for customers.
“Even a commodity business that melts plastic pellets and turns them into finished parts can compete beyond availability and price,” Rogers says. “By explaining to customers how a single part can also function as a safety device or enhance a user experience or improve the functionality of the entire system, we can demonstrate real long-term business value. This is exactly how we’re differentiating. This is how we’re making money.”
4. Get More Thoughtful About Your Targeted Marketing
When the newspaper and magazine business moved to digital platforms, most of the advertising was aimed at getting clicks rather than building brands, says Mike McCue, CEO of Flipboard, which curates news and other content for more than 100 million monthly users of its website and mobile platform.
Unlike websites that use only cookies or bots to place ads in front of consumers wherever they are online, Flipboard uses artificial intelligence, data analytics, and human curators to help publishers and advertisers worldwide tie their content to people’s interests and then place ads in the precise moments that are most relevant.
“As a photographer, I welcome seeing an ad from a camera company about their latest mirror-less gear when I’m reading about photography, but it’s less relevant when it pops up when I quickly want to scan what’s going on in politics,” he says.
5. Take the Long-Term View
Small businesses often want to race down the fast track to profitability in order to attract new investors or keep their current ones happy. But there can be long-lasting consequences to short-term thinking.
Take the agricultural industry, for example. For most small farmers, using chemical pesticides provides immediate relief from crop loss and the opportunity to grow more food on more acreage, resulting in more income.
But those short-term benefits can be fleeting. Both the U.S. Department of Agriculture and the U.S. Environmental Protection Agency report that applying too many chemicals can leach soil nutrients, contaminate water, and pollute the air. The potential long-term fallout: damaged crops and lower yields, as well as food-borne illnesses such as E.coli, salmonella, and hepatitis, according to the U.S. Centers for Disease Control and Prevention.
Although organic alternatives to pest control can take up to three growing seasons to produce optimal results, they’re well worth the wait, argues Pam Marrone, founder and CEO of organic pesticide maker Marrone Bio.
Read the original article on the Oracle blog.
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