The Australian Bureau of Statistics tells us that only 20% of businesses will still be running successfully after five years of operation. Furthermore, of that 20%, more than 80% will close down or disappear over the subsequent five years. These statistics show just how challenging running a small business can be.

Why do some businesses succeed and others fail?

I believe that the way a business owner thinks plays a major part in its ultimate success or failure. When the business is struggling, an open-minded, pro-active business owner will seek out help and look for solutions. This one fact, the ability to be open to advice from other people and to actively seek out people who can help you, is crucial for ongoing success.

Make sure that you stand out from the crowd

Too often people starting up a business just do what everyone else is doing. They follow their competitors. They advertise where others advertise and their ads just say " this is what we do", only listing the facts and saying nothing unique about their business. They don''t differentiate themselves from their competitors. Then they decide to compete on price because that''s the only thing they know how to do, but unfortunately not all consumers are price driven.

Learning marketing will assist you in planning strategies to compete with your competition and differentiate yourself and your product so that you stand out from the crowd. Professional marketing allows you to distinguish yourself from the competition so you aren't just competing on price. Successfully differentiating your business will ensure that you attract more customers and then you''ll start to make more profit, employ more people and grow your business.

Communicate effectively

Developing excellent communication skills with your staff is a crucial element in growing your business successfully. One of the most important assets of a business is its people. Knowing more about how people communicate helps you to deal effectively with your clients and staff. Good communication with your clients allows you to learn more about them, allowing you to build a relationship, provide a friendly environment for them and more closely understand their needs. Communicating more effectively with your staff and creating a team atmosphere where staff are encouraged to be open and honest in their communication (and give you regular feedback) will help ensure your business''s success.

Set up effective systems

The other area that is vital for success in turning a small business into a large one is the use of systems. Implementing work systems and operating procedures, not only ensures consistency of product and service delivery, but also provides your staff with the information and operating methods they require to complete all business tasks.

Too many business owners work on the principle that it is more important to get the perfect products, the best shop or the latest equipment. They concentrate on obtaining the strongest technical knowledge about their business, when what''s really important is developing systems.

Marketing systems, people systems, operating systems and leverage systems are all important to the success and growth of your business. Working on these systems will allow your business to grow in an organised and structured way so that one day it can run without you having to do all the work.

Choose the right people and make the sale

Choosing the right people to work for you is very important. You need people who genuinely want to work for you, share your values and fit into your team. Think carefully about the skills, attitudes and knowledge that you require for the position and then make sure this is the criteria for selection. There is not much point having lots of clients if you can''t get good people to serve them.

Making the sale successfully and continually is crucial to great success in business. Sales training and a customer focus will help you and your staff achieve this. Your staff must be committed to the same goals as you are. They must know what is expected of them. Sales targets and incentives can assist in motivating your staff to sell, but you must also provide them with the product knowledge, information and support required for them to succeed.

If you want to ensure a more profitable business, the systematic implementation of strategies in each of these areas is key.

Diane Fraenkel is a Business Coach with ACTION International. To find out more, Diane can be contacted on Phone: 02 9589 3376, Fax: 02 9589 3367 or through Email: fraenkel@bigpond.com