You’ll find many tips and insights related to the characteristics that can make a small business successful. Let’s get started with two points I feel are very important.
Profitability:
One aspect of a successful business is profitability. It’s not just the sale price-subtract the product cost to determine your profit.
Your profit per sale may be acceptable, but your overall profit may not be good enough. You have to make enough money to pay all your expenses including, bills, payroll, and operating costs, to determine what’s leftover, and that’s your overall profit.
Profitability is measured over time. You can’t look at a business and say it’s been profitable for 30 days while the other 11 months you were running at a loss.
When your business is profitable and stays that way, you can say you have a successful business.
Providing Products and Services To A Hungry Market:
Another aspect of a successful business is the market you supply. A lucrative market that’s sustainable is something that keeps a business going for years. A business may come into existence because of a trend. Unless that trend is strong, your business won’t last. When researching a market, make sure you look into a trend with lasting growth.
When you find a market that has a strong demand for your products and services and you can supply that market while making a healthy profit, then you have found a winning formula.
What Qualities Make a Business Successful
Let’s have a look at some of the qualities that make a business successful.
Customer service:
Your customer service is very important. Without customers, you don’t have a business. You must have policies in place that keep you from destroying your company through your customer service.
You’ve heard the term the customer is always right. Well, that’s not the case. The customer is not always right, but in their mind, they are right, so you as a business owner have to address the issues related to your customer’s satisfaction. It doesn’t mean you have to give every customer what they want, but you must address the issue and do your best to come out of it without losing a customer.
Quality Products and Services:
Whether it’s through your service or the products, the quality you provide is an important factor in your business’s success.
When you offer quality products and services at reasonable prices, people will come back and refer others.
Business Stability:
The continuation of a business is important. When a business is stable, it can get through the ups and downs of the market.
A weak business may do well during a thriving economy, but that business may not survive when the economy dips.
Business stability is not limited to, but includes the following:
- Having a Strong Operating Budget
- Creating an Emergency Fund
- Reducing Debt
- Keeping Expenses Low
- Keeping an Eye on Your Market
- Providing Quality Products and Services
- Coaching Your Employees
- Building a Strong Support Team
Understanding Your Customer Base:
A business owner who operates a business by placing customer needs first builds a strong business. When you understand your customer’s needs, you can set your priority to focus on and cater to those needs.
Sometimes it’s as simple as finding out what your customers want and giving it to them, and that can be the key to your success.
Building Strong Customer Relations
A lot of people become loyal customers simply because of the relationship. When you build strong relationships, customers will continue to do business with you. There are many ways you can build a relationship even if you don’t interact with your customer face to face.
What Makes or Breaks a Successful Small Business?
Financial Strength
The financial stability of a business is one key that will make or break a business. Many businesses fail in the first few years due to a lack of funds.
When starting a business, you want to make sure you have enough funds to open your doors and keep it running. It’s not enough to have the funds that will only allow you to open the doors. You need operating money to keep the business going. It’s not enough in the early stages to depend on the revenue coming in.
Suppose your business becomes wildly successful. If you don’t keep an eye on your finances; you could be asking for trouble. The key is always to keep an eye on expenses.
Investing In Your Business
It’s important to invest a part of your profits in your business. You can build a fund by using a percentage of your profits.
You can use that fund for new products and services, marketing, expansion, etc. When you constantly invest in your business, you’ll have a much better chance at long-term success.
Business Reputation
Your company’s reputation is very important. If you deliver good customer service, quality products, expert service, and reasonable pricing, then you’re building a favorable reputation.
If your reputation gets tarnished, it can hurt and even put you out of business.
A Lawsuit
A lawsuit is one thing that can damage a business and even drive it to bankruptcy.
It’s important to cover your bases to prevent lawsuits. A strong lawyer can help you ensure you won’t be hit with a lawsuit that can end your business.
The key is to consult with your lawyer to discuss areas in your business where you may be vulnerable and how to protect yourself.
The Magic Formula To Business Success
If you’re wondering if there is a formula for creating a successful business, think about this one.
Find out what people want and give it to them!
If you can find a hungry market that you can easily supply while making a decent profit and keeping your costs down while staying ahead of the competition, you have found a winning formula, and you’ll be hard to beat.
What Successful Entrepreneurs Do Right
Research Before Moving Forward
Successful entrepreneurs perform their research before starting a project. They don’t assume, and they use facts and information before they move ahead with a project.
Good Decision-Making Skills
Successful entrepreneurs make good decisions. Do they make the right decision all the time? No, of course not, but they do have a decision-making process that they use. The more they practice using their technique, the better they become at decision making.
For important issues, they will do their research as mentioned above, and then they will use their decision-making process to decide on what the next step is.
Avoid Hesitations
Successful entrepreneurs do not hesitate. That’s not to say that they jump into anything quickly.
They will use their decision-making skills, and they don’t take forever when that golden opportunity arises. Those who take too long and hesitate will lose out because someone else will jump in on the deal.
Financial Awareness
Successful entrepreneurs always have their finances in check. They know their profits, losses, costs, and their sales. The numbers are always fresh in their minds, and they don’t take their eye off their finances.
When you keep a close eye on your finances, you’re able to make adjustments as necessary. When you don’t look at the books frequently, you run the risk of missing financial problems that could potentially be damaging.
Avoid Time-Wasting Activities
Successful entrepreneurs make good use of their time. They don’t waste it on making small talk throughout the workplace and other related activities. Instead, they allocate their time appropriately.
They spend most of their time on important tasks. They spend less time on those issues that are counterproductive.
Using a Team of Confidants and Consultants
Successful entrepreneurs are not experts in everything and don’t know everything. What they are good at is building relationships with people and companies that specialize in certain areas. They consult with them on important matters and strategies.
The team may consist of colleagues, subordinates, lawyers, accountants, engineers, marketers, bankers, IT experts, etc. The key to using these people is trusting their judgment and building a strong, trusting relationship.
Team Building
Successful entrepreneurs build strong workforces. Whether they have executive or general labor positions to fill, they look for the best talent they can afford.
They treat their workforce with respect. Clever entrepreneurs understand they can’t run their business without them and do what they can to minimize employee turnover.
Good Listening Skills
Listing skills are important. A business owner can learn a lot about his business by listening to his employees. Understanding everyone’s job, no matter their position can reveal issues that need attention.
Listening is a skill, and it differs from hearing. You need to take it one step further and understand what the person is telling you. You may want to confirm what you understand.
For example, you have a person complaining about keeping up with a job and pressured to get things done.
You could ask, do you feel overwhelmed with the job duties? They might say something like I’m given three hours to complete the job, but it takes 40 minutes to receive the supplies.
In this case, you have uncovered a problem. Why does it take 40 minutes to get the supplies, and you can get that issue corrected. Listening to the people that work for you allows you to learn a lot about your operation.
Successful Entrepreneurs Keep Learning
Successful entrepreneurs never stop learning. For example, they may know a bit about production but go the extra step to learn more from qualified people.
They may take a course, go to seminars, or listen to audiobooks during their commute. By constantly updating and learning new skills, they gain a lot of information to apply and improve their operation.
Taking Calculated Risk
Taking risks is a part of managing a business. You can’t always tell the future, and during your career, you’ll end up taking risks.
A calculated risk is studying the issue. For example, you know that you have a 60% chance of succeeding in this expansion and a 40% chance of failure. Going by the numbers, you have an idea of what to expect. Therefore, your risk is calculated, and you’re not making your decision blindly. Successful entrepreneurs will take risks, but they are calculated.
How Underconfidence Affects Decision Making
If you don’t have any confidence, the decisions you make will not be solid. The problem is you’ll be second-guessing yourself. You’ll waste time with execution simply because you’re not sure you made the right decision.
It’s like driving down an unfamiliar road. You don’t have a map, you don’t have directions, and you don’t have a GPS. You’ll be driving down the road slowly, looking at every turn and intersection, trying to figure out if you’re going down the right path or if you made a wrong turn, you’ll be anxious, and you’ll waste a lot of time.
Someone making a decision without confidence will lose their focus rather than concentrate on achievement.
To improve your decision-making abilities, you can do some research. When you look into a matter before committing, you will improve your confidence.
Another tip is not to make a decision suddenly. Take some time. If you are in the habit of making quick decisions, it can lead to making the wrong decision simply because you decided too quickly. Instead, take a little time to think it over. Practice will improve your skills to make better decisions and give you the confidence you’re missing. For more, see 8 Simple Tips to Make Better Decisions Starting Now
One more tip is to play what-if. This technique allows you to look at different outcomes. For example, if I buy a delivery truck today, how will that affect my budget? If I don’t buy the truck, how will that affect my deliveries? Playing “what-if” allows you to predict multiple outcomes. For more on this technique, see How to Predict An Outcome Using This Simple Technique
Conclusion
It takes a lot of time and effort to start and run a business. You can do a mediocre job or you can take the extra effort to make your business a successful one. The choice is yours.