New business owners have a challenge ahead of them. It's a sad fact that many businesses fail, with Michael T. Deane of Investopedia finding that 45% of companies will fold within their first five years of operation. Knowledge is power in the business world, but there aren't many entrepreneurs willing to share their experience with newcomers. Since the business world is dominated by owners who hoard their knowledge, finding out about the challenges that small businesses face can be an uphill battle. Luckily, some small business owners realize that competition within an industry is healthy. Anil Dobani (@anilthejeweler) is one of Instagram's rockstar entrepreneurs, growing a small business that helps him to reach customers all across the social media platform. Here, he shares his thoughts about the most vital considerations for new Instagram entrepreneurs.
Don't Underestimate Celebrity Outreach
Anil has a massive client base, including professionals from the NFL and NBA. These celebrities help grow his confidence as a jeweler, but they also have an enormous number of followers. When these high-profile clients start sharing pictures on the platform with his business attached, they create new leads for him and send customers directly to his company. Anil's ability to leverage his customers to drive new business is something that all budding entrepreneurs on the platform should do; it's far more effective than paying for ads and has a better return on investment since the investment made for those endorsements is nothing. Unlike traditional advertising, where he'd be paying social media to direct the ads to a demographic, here, the buyers already have their eyes on his products. Social media's power comes from leveraging the followers of existing clientele.
Build Relationships With Clients
Customer loyalty is a vital part of a business's success in the long term. Amy Gallo of the Harvard Business Review found that it's far more cost-effective to retain a customer than to acquire a new one through advertising, with just a 5% increase in customer retention leading to a 25% increase in profits. But how does an entrepreneur ensure they keep buyers coming back for more? The secret is in relationship marketing. Instagram is a social media platform that allows for real-time interaction with clients. Skilled business people know that these interactions can make consumers feel better about themselves and their purchases. They ask the right questions and establish a relationship with the client to build the customer's loyalty. For smaller brands, like Anil's, this sort of marketing is ideal since it allows him to leverage his brand's unique style to keep customers engaged.
Don't Think Small
Starting a small business as an Instagram entrepreneur shouldn't be an end goal, but rather a start. Anil aims to take his Instagram business into the real world by opening up a store. For small entrepreneurs, growth will determine whether it makes sense to branch out and expand their operations. Thinking small only works while the business remains small. Eventually, if it's retaining customers and making the right moves, it will grow. How the entrepreneur directs and rides that growth will determine whether the business will remain profitable in the future.