Are you tired of being told what to do? Do you thirst for the freedom to do what you want and to work as who you are? Why not start your own business? Many of the successful companies rocking the world today were once small businesses in the very early stage, and there is a chance that yours can be the next one.
Many people misconceive that small businesses do not contribute as much to the US economy as large corporations do. On the contrary, 99.7% of the firms in the US are small businesses. They account for 43.5% of the gross national product (GDP) in the US; 44 % of the gross business product; ⅔ of the new jobs (Small Business Administration (SBA), 2019).
Looking at these data, it goes without saying that small business owners are national heroes sustaining the whole country’s economy.
What is a small business owner?
The title says everything. As straightforwardly as possible, small business owners are those people who own a business. However, “owning” does not only refer to the fact that you possess the business as your asset. The term implies many more hats that you, as a business owner, have to wear. You will be the one who starts and manages the business to further your personal goals. Many people regard their businesses as an alternate of their personality, bound with various needs and desires. As a business owner, you need to devote a lot of time, resources, and effort to the business; then, it can be your primary source of income.
Many of you are very confused between business owners and entrepreneurs. In 1934, the word “entrepreneur” first emerged, marking a distinction from “business owner.” Although both terms refer to those who start and run businesses, they differentiate the involved purposes. While business owners maintain their business to pursue their own passion and goal, the main aims of an entrepreneur are profit and growth. Therefore, the innovation and strategic management in the business will tell one from the others. If the business introduces something new, such as new products, markets, production methods, sources of supply, it is considered an outcome of entrepreneurship.
Being an entrepreneur requires you to be a big risk-taker and a dreamer willing to do for others and change the world. If you prefer a minor gamble and only want to get your personal needs and goals fulfilled, being a small business owner is more appropriate for you. You can still turn over a leaf and adopt a lifestyle that you love.
Why do you need to be a business owner?
1. You can gain ultimate control over your business:
You can not argue that along with the high degree of autonomy and freedom in your workplace. There always comes the higher requirement for responsibility. But let’s look at the bright sight. Being a business owner also means that you can be your boss. No one can force you to do something you disagree with.
Because the business is your “child,” you know how exactly you need to “raise” it. Therefore, you can save a lot of time when making decisions. You do not need to wait for discussions with colleagues or permission from seniors. Moreover, even though you need to get through many difficulties running your own business, you can take more critical and more meaningful challenges instead of running errands or being involving in small tasks as an employee.
2. You can choose who to work with
Not everyone is lucky enough to have a good relationship with everyone in their workplace. If you are stressed because you cannot get along with your co-workers or bosses or do not want to involve yourself in classic “office politics,” you can leave the company, start your own business, and select those you want to work with. The cooperative bond between you and your crew can carry the business further, helping the company grow faster and saving you from a lot of headaches resulting from unwanted toxic relationships.
3. You can balance your work life and personal life.
Many people start their own business as a way to boost their work-life balance. Even though running your own business does not mean that you have to work fewer hours, you still have more control over when to work, thus, more chances to spend time with your family and friends. You can coach your children on how to go fishing or attend their plays at school, while a regular 9-5 job may not allow you to do so.
4. You can pursue your passion, leading to high self-fulfillment.
Many business owners regard their businesses as their little world. They can live as who they are in that world. Being different from an entrepreneur who has to constantly invent new projects and sell them when they are ready to go to market, a business owner treats their business as their identification or album of memories. For example, my mother has a great interest in fashion. She runs a clothes shop. Then she spends half a day in the shop, selling clothes and talking with customers, picking the most beautiful outfits for them, which she has always been into. She also makes some of her best friends there. The business is also a part of our family. When we have time, my father and I usually help her with the business. The shop has carried along with a lot of memories our family has together.
How to price your business
One of the most essential aspects that leads to the success of businesses is efficient pricing. Usually, many people focus too much on the promotion and neglect the pricing. Bear in mind that most of your customers consider pricing a benchmark to evaluate the quality of the product you offer. Moreover, pricing is the only component in the marketing mix (including product, price, promotion, and place) to generate sales profits. A lousy pricing strategy can make your business go bankrupt.
First, you need to be clear about your pricing objectives. Then, there is a corresponding pricing strategy for each different purpose.
|Pricing objective||Pricing strategies|
|Profit-orientated objective: You want to maximize your current profits, income, or rate of return. In this case, you need to estimate the demand and costs first and choose the price that can help you to gain as much profit as possible.||Cost-plus pricing: You set the selling price based on the unit cost.|
|Sale-oriented objective: You want to increase the sales volume to the utmost, to create growth in sales, or sustain the current sales level, or sometimes to increase the cash inflow. In this case, you do not want to lose market share to your competitor.||Competitive pricing: You use the competitors’ price as a benchmark and set a price to stand out from the competition.|
|Status quo-oriented objective: You want to compete with other businesses on other products’ features other than price. This strategy will prevent your business from price battles with competitors and help it remain competitive.||Value-based pricing: You set the price based on the perceived value of your product or service.|
|Go-To-Market objective: When you need to launch a new product to an existing market or an existing product to a new market or a new customer segment, you want to know how customers react to the price.||Penetration Pricing: You set the selling price very low in a competitive market, then higher after a duration of word-of-mouth recommendations. Skimming Pricing: You set the price high in the beginning then lower when competitors start to enter the market.|
In real life, although small business owners may take competitors’ prices as a benchmark for setting their first price, they do not always keep their prices to compete with other businesses. The majority of them take customer needs and product performance into consideration and adopt a value-based pricing strategy.
What is customer success?
Customer success has become the buzzword in the 21st century. There has been an exponentially rising need for business owners to develop this newly emerged profession to retain the growth of their business.
Customer success is a process of assisting customers in solving issues and achieving their success, which may or may not be related to your business. While customer service reacts to those issues, customer success is more about predicting and solving them proactively. As your customers do not just buy your products or services but a pack of benefits, customer success satisfies their needs beyond expectation.
For example, Shopify, an e-commerce platform, collects customer insights and tries to bring the customers, who are merchants in this case, optimized solutions to expand and grow their stores. They can even offer social media marketing courses to their customers, even though Shopify does not work in the social marketing domain.
To understand how well your business is performing so far, you need to gather feedback from customers by conducting questionnaires or focus group studies and calculate customer satisfaction score (CSAT) or Net Promoter Score.
To conduct customer success, first, we need to determine what kinds of problems your customers face.
Why is customer success significant?
In today’s world, where the market becomes more and more competitive with new businesses emerging, which means more options for customers, customer success becomes vital to help your business survive.
1. Customer success increases profits.
When your customers can achieve their success, they become more loyal to your business. They will come and buy your products or services over and over again. You just need to increase your customer retention by 5%, and you can increase profits by anywhere from 25% to 95%.
2. Customer success saves costs.
In today’s world, when the customer is overwhelmed with social media ads on the Internet, customer acquisition becomes more and more expensive. Customer success can generate positive word-of-mouth recommendations about your business, assisting you to gain more new customers with much lower costs.
3. Assist your customers to solve the problems by themselves
It is good that your business can help the customers to get over the issue. But not everyone has enough time to visit your business, fill in forms and wait in line to get help from you. Thus, you can consider offering them self-service options so that they can work on their issues on their own. These options save time not only for customers but also for your business.
4. Keep and manage customer data
Customer data such as payment details, last purchases in an account, or subscription plan is also vital for the customers when they want to track their spending for personal financing management. Your business had better have a better system to store, manage and distribute necessary data to your customers. A small business owner should use AccountDock to improve customer success by allowing customers to quickly get their receipts without having to request an invoice from their service provider.