Keys to a Long-Term Success for Small Businesses

Feb 18, 2023

When I was 29 years old, I walked away from a job making over a quarter of a million dollars a year during a tough economy, with a wife pregnant, and after burying my father, I decided to start MMP Capital out of my garage. With every reason lined up as to why you shouldn’t take a risk, and start a business, instead I trusted my gut, my experience, and my contacts that I could create a well-managed, successful small business.

Ten years later, MMP Capital funds nearly $300MM in equipment financing a year, with a strong following from medical aesthetic offices that must consistently purchase new equipment.

The MMP family consists of 55 employees, and we are projected to grow by 35% this year, despite economist predictions that 2023 will be one of the toughest economic years in contemporary times.

Beyond my family, MMP Capital is my biggest achievement, and I would like to share some of the lessons I have learned over the past ten years of growing my business.  

  1. There is no shortcut on the path to success

This is the one thing every entrepreneur will tell you, and my experience is no different. There is no such thing as an overnight success. Starting a business requires commitment. Commitment of time, money, and effort. Are you ready for the sacrifices you must make? 

If so, start crunching the numbers.

It is essential to know potential market share, expenses versus income, what value will you provide to potential customers?  Be truthful with yourself when calculating all this data. 

Ask yourself tough questions and if you’re truly comfortable with your projections.  Are you being too optimistic, or even too pessimistic, for any reason/s?

When building your data projections, make sure you consider all factors, including:

  • What are the potential industry-related challenges?
  • Where are the immediate and long-term growth opportunities?
  • Are you fully factoring in the impact of the potential safety and/or insurance costs?
  • What are the projected staffing costs based on the area(s) in which you operate, and what level of experience will you need from employees?

Bottom line is do your research. Be willing to challenge yourself and adapt. Be prepared to work harder than you ever have before.   

  • Keeping current customers happy is the best way to get new ones

Keeping customers happy is essential to organic growth, which is typically because it is a lot easier to grow with current customers than to consistently go out and get new ones.

The success rate of retaining a customer you already have is often estimated at 60-70%, while the success rate of onboarding a new customer is typically far less, with rates varying by industry. Also, it’s estimated that increasing customer retention by 5% can, for many small businesses, improve profits by 30-85%, or even more. Happy customers drive organic growth – and they can serve as powerful advocates to help you attract new customers.

A key part of keeping your customers happy is doing the research needed to truly understand their businesses and motives.

Why are they buying your product or service? How will it benefit their business? Is their business steady or seasonal? When is the best time to approach them? Who are my competitors today? What companies could be threats tomorrow?

Once you get in the customer’s mind frame, selling to them on your unique value proposition will become second nature.

Personalized service is a key component of my management style. Know you customers’ hobbies, the names of their family members, what drives them to run a business. My staff is instructed to answer customer phone calls or emails within five minutes – even if it is to say, “I will get back to you with an answer.”

These may seem like small things, but they matter a lot.  

  • Know your industry

Knowing what is happening in your industry, and in your clients’ as well, can be a huge boost to business.

When I started MMP Capital in 2013, Obamacare had just gone into effect. Doctors were seeing a decline in revenue and got hit with a 2.6% medical device tax. I realized that aesthetics are cash based receivables, and by cutting out the insurance companies who were the middle man, that have been absorbing a larger piece of the pie at the expense of the doctor, and the patient, would be a booming market for years to come.  The aesthetic medical industry creates a new revenue stream for private practice doctors who want to have career and financial autonomy that helps them offset lost income. That industry remains our largest industry vertical to this day.

When COVID-19 shut down small businesses, many financers anticipated a huge business hit. However, during economic downturns, the strongest companies that weathered the storm used the time to build up strong cash reserves. So, when the market turned positive, they were well positioned to grab market share at the expense of their competitors that didn’t survive the downturn, and dramatically grow their revenue.

The same may be true for 2023 if economists are correct.

  • Success is contagious

This last one is a personal motto. I believe if you treat your employees well, they will, in turn, want to do right by you. If you share the success of the company with them, you build a culture of collaboration and teamwork that will support the business for years to come.

This is true for customers and partners as well. For us, if we’re able to help our vendor partners sell more products in less time, we all win. Customers are happy and everyone is making money.

As a small business owner, there is no one-size-fits-all solution to long-term success. However, the best practices I have highlighted should help make the path just a little bit easier and hopefully more profitable.