Owners of Legacy Businesses Explain What It Takes to Stay Open for DecadesThe majority of businesses close before their 10th year. Here’s how to become the exception.
The only thing more challenging than launching your business is getting it to stand the test of time. According to the Small Business Administration, only a third of businesses stay open for more than 10 years. What does it take to not only avoid closing down in your first few years, but to stay successful for decades to come?
Here, owners of legacy businesses reveal the secrets they’ve learned in the 10-plus years they’ve kept their doors open.
Watch your cash flow
It’s tempting to take advantage of favorable interest rates to reinvest in your business when the economy’s good. But things can swing the other way — make sure your finances are on firm footing so they can weather the challenges.
“What has kept me in business for more than 20 years, through recessions, 9/11, the stock market crash and downsizing, is two words: Cash reserves,” said Diane DiResta, a consultant who works with corporations in learning and development. “I can’t emphasize enough the importance of having cash to help you navigate the lean times.”
Take a look at your books — if you’re on a path toward becoming overleveraged, look for ways to cut back or speak with a financial advisor.
Invest in your team
A skilled, cooperative staff can help a business tackle day-to-day challenges and achieve long-term goals. Investing in the right people is critical if you want years of success, said Ian Aronovich, chief executive of GovernmentAuctions.org, a members-only site that has provided information about government auctions since 2003.
“You make a business successful by hiring employees that are the best of the best. This includes smart, independent and confident workers who are good at what they do and won’t waste your time,” he said.
Carefully screening candidates through reference checks, in-depth interviews and trial periods can help you avoid bad apples — and let the cream of the crop rise to the top.
Here’s a tough reality for most business owners: Your current formula for success might not work just a few years down the road. Keep your business relevant during times of change by embracing new technology and changing customer preferences.
“Our secret to staying in business for many years has been our ability to adapt our business model to changes in consumer demand,” said James Feldstein, owner of Audio Den. “Not only has the technology behind the products we sell changed dramatically since we started as a brick-and-mortar store in the 1970s, but so has customer shopping behavior.”
While Audio Den still has a store in Long Island, the company has transitioned to an e-commerce model to capture a greater market share and satisfy its customers’ desire to shop online, said Feldstein.
Keep an eye on what’s coming down the pike. When you see a trend that’s starting to catch on, experiment with ways to incorporate it into your business model.
Businesses that don’t provide a consistent experience can alienate customers fast. Standardize your procedures so you can offer high-quality customer service every time, said Larry Struckman, chief operations officer at ShiftNote, which has provided employee scheduling software for 11 years.
“Write down what it takes to open the business and close it, along with everything in between, and get your whole team working those systems,” he said. “There is a system for everything in a business, from scooping ice to greeting a customer.”
Not only will consistent practices provide a sense of familiarity for customers, they’ll also allow you to monitor costs and avoid waste.
Focus on the long term
While making rapid changes to your business can help you stay profitable when demand slows down, it’s important to balance those adjustments against your long-term strategies.
“Business owners make quick decisions out of fear that they need to do something drastic [to stay profitable during slow times],” said Aydin Karadeniz, founder of Promocodes.com, a 12-year-old coupon site. “These quick decisions, which aren’t always well planned, can push you away from your long-term goals. Try to keep a level head in order to find the light at the end of the tunnel.”
How can you work on those big-picture plans when so much of the day-to-day demands your attention? It’s not always easy, but pick one or two small things to do every week to keep things moving. Those small wins turn into major achievements over time.
Treat your customers like gold
The longevity of just about every business is built upon one thing: Customer service. Treat your customers well and have a genuine interest in improving their lives to earn their loyalty.
“The single greatest trick to my company staying in business for 12 years is treating our customers like gold,” said Roberta Perry, owner of ScrubzBody. “My advice to others is don’t sell what you have. Instead, solve your customers’ problems with your solutions, be kind and make them feel like they are your top priority.”
If you can’t provide the product or service a customer needs, be upfront about that, said Diane Roth, owner of L’Armoire, a boutique in New Canaan, Conn., that’s been open for more than 30 years.
“Always be honest and direct with your clients. It’s better to lose a sale than to lose a client [for being misleading],” she said.
There’s no perfect formula to lasting success. But heeding the advice of experienced entrepreneurs might give you the tools you need to make your business a legacy.