Only one of every 5 businesses makes it to its 5th year, and fewer still make it to 10 years. What do the successful businesses have in common?
- Management skills and experience. Over half of business failures can be directly attributed to inexperience and lack of knowledge.
- Energy, persistence, and resilience of the leaders. Many business owners have failed or come close several times before their “instant” success. Don’t give up.
- A product that really does meet the client’s needs, and service that doesn’t get in the way of people buying. There must be a compelling reason to buy; the product is great, the people love to provide service, and the buying experience is easy and fun.
- The ability to create a ‘buzz’ around the product with aggressive and strategic marketing. Make scarce marketing resources count. Do as much homework about your customers and their choices as you can before investing your marketing cash.
- The right pricing. Many businesses don’t know how to optimally price their product given their market. ‘Price elasticity’ refers to the balancing act between the price you set and the volume of sales you can achieve at any given price point. Getting the balance right will maximise your profits. It comes down to your customers perception of the value of your product and sometimes the power of your personality.
- The maturity to treat employees, suppliers and partners fairly and respectfully. Trust and respect result in productivity increases in ways that may be difficult to see and quantify.
- The ability to keep developing new products (or services) to retain and build a customer base. Consider gradual product development based on improvements to the current product line which may expand your appeal to the current customer base.
- Cost controls. Successful businesses know how to work with resource suppliers to keep costs low. Keeping costs lower than competitors and continuing to look for cost reductions even when the business is profitable is key.
- Superior location/distribution channels and/or promotion creating a connection between your product and where it can be obtained. Studies have shown it can take seeing your product or name seven times before a customer is ready to buy.
- A steady source of business during both good economic times and downturns. If your business is dependent on sales of products which suffer a substantial drop in demand during economic downtowns, your success will be short-lived. You need to ensure that you also have a compelling offering for the tough times.
