How do you build a successful business even when you have limited capital and experience? Here are 10 critical business success factors you must pay attention to.
It is no longer news that approximately 99% of new start-ups fail in their first ten years and the primary reason for this high rate of failure is that most entrepreneurs start a business unprepared and with the wrong mindset. Now the dream of becoming successful in running a business captures the imagination of aspiring businessmen.
This is where a vision of thrilled customers, balanced profits and industry respect comes in – and it is possible to fulfill each by understanding the factors that really make a business successful. Now what really makes a business successful? You will find out below.
10 Critical Factors That Make a Business Successful
“A successful business is created before there is a business.” – Rich Dad
“Getting rich begins with the right mindset, the right plan and the right people.” – Robert Kiyosaki
The mindset is the foundation of every successful business and the reason is because your perception determines the way you do business. Your mindset determines your business mission, its vision, your business culture and your work ethics.
- Why did you start a business?
- What is your primary aim of building a business?]
These are two important questions you must answer now because the answers will determine if you will succeed or fail.
Most people start a business because they believe building a business is the fastest way to make money and get rich. Some start a business because they want to be their own boss and do things their own way; while others start a business just to pay themselves a decent check monthly. While making money from your business is not a bad idea, you must never forget that your primary aim should be to provide value and take care of the customers.
“The purpose of a business is to create a customer.” – Peter Drucker
Aside your reason for starting a business, you must also understand that building a successful business is not an overnight hit. It is a product of continuous effort in the right direction. Secondly, you must also know that running a business is never a smooth ride. You must prepare yourself adequately for the challenges involved. Lack of preparedness on the part of the entrepreneur has caused the collapse of many businesses.
“There are fast ideas and slow ideas, just as there are fast trains and slow trains. When it comes to money, most people are on the slow train looking out the window watching the fast train pass them by. If you want to become rich quickly, your plan must include fast ideas.” – Rich Dad
The next factor that makes a business successful is a great business idea. This is a no-brainer in the success secrets of every business because a great idea translates to a great product.
But your business idea does not have to be something very special for it to be successful. It can be either a new product or service or an opportunity that exists but need improvement. However, the most important success factor is that your idea must ultimately have demand. It must either solve a problem or satisfy a need; this in turn will create a market.
Some experts say that online businesses don’t need capital in order to last. The truth however is that capital is crucial to the success and survival of all types of business. But a critical point I want to emphasize is that capital is not the most important factor for building a successful business.
The reason I say this is because I have seen businesses with excess liquidity, yet they failed. So it’s not all about having the money, it’s all about knowing how to use the money and having the right people to execute your plans.
4. A Great Team
“If you pick the right people and give them the opportunity to spread their wings and put compensation as a carrier behind it, you almost don’t have to manage them.” – Jack Welch
You can be a successful self employed entrepreneur or artisan but to be a successful business owner, you need a team. Now I am not talking about your regular staff or employees, I am talking about assembling a business team that provides strategic direction and execution of your plans.
Every member of your team must be competent, tested and proven in their various fields. To obtain the best result, it is advisable to split your team into two: (Internal and External team).
“People are definitely a company’s greatest asset. It doesn’t make any difference whether the company’s product is cars or cosmetics. A company is only as good as the people it keeps.” – Mary Kay Ash
Your internal team should comprise of individuals that see to the smooth daily operations of your business. They include your accountant, operations manager, product development team, etc.
Your external team on the other hand may not exist within the business, yet they provide strategic professional services and advice you need to grow your business. Those you should have on your external team include an advisor, mentor, consultants, attorney or lawyer, banker, tax strategist, etc.
“To everything, there is a season, and a time to every purpose under heaven. A time to plant and a time to harvest that; which is planted. A time to break down and a time to build up” – Ecclesiastes 3: 1-8
“Patience; this is the greatest business asset. Wait for the right time to make your moves.” – J. Paul Getty
Nothing kills a business faster than irrational decision making, taking miscalculated risks or making ill-timed business moves. To reach the pinnacle of success in business, you must have a strategic plan and a team to execute such plan.
But most importantly, you must execute such plan at the right time. I have seen businesses with potential fail simply because they announced their innovation too early; thereby arousing the attention of their giant competitor.
“If you see a snake, just kill it. Don’t appoint a committee on snakes.” – Henry Ross Perot
Now consider some of the innovative products that shook the world (Windows, iPod, Gillette) and you will see that timing was placed into consideration. However, I want to emphasize the point that waiting for the right time to make your move can also become a disadvantage for you especially in this rapidly changing world. So you must know when to wait, when to act and when to act fast.
“The most important word in the world of money is cash flow. The second most important word is leverage.” – Rich Dad
“The rich build networks, while others are trained to look for work.” – Rich Dad
“Business is not just doing deals; business is having great products, doing great engineering and providing tremendous service to customers. Finally, business is a cobweb of human relationship.” – Henry Ross Perot
In the course of building your business, you must also build your business network. Some call it business network, while others call it strategic alliance or political connection but the fact remains that it is very important to build one.
- Who are your friends?
- Who are your business associates?
- Who is on your team?
Most entrepreneurs know the power of inner networks. It is your job as an entrepreneur to strengthen relationships with peers, mentors and other key players from the business. Inner networks provide direction, support, and a growing number of people to help.
“In times of rapid change, experience could be your worst enemy.” – J. Paul Getty
“Willingness to change is a strength, even if it means plunging part of the company into total confusion for a while.” – Jack Welch
A successful business stems from its ability to adapt to changes. The world of business is filled with startling events and surprises. In other words, it is never static and it is unpredictable. Adaptability allows you to respond to circumstances and stay competitive. It keeps your business in a liquid state, thereby making your business adapt to any situation whatsoever.
“Wealth gotten by vanity shall diminish; but he that gathers by labor shall increase.” – Proverbs 13: 11
“It takes 20 years to build a reputation and only five Minutes to ruin it. If you think about that, you will do things differently.” – Warren Buffett
“The most important thing in your business relationships is your reputation for honesty. If you can genuinely and sincerely fake honesty, you will be a success. Never doubt it.” – The Mafia Manager
One of the untold but important criteria for building a successful business is integrity. Being honest and open about your business helps your company grow and develop your individuality. You have to be honest with your employees, customers, suppliers, associates, investors, etc.
Even if you are engaged in an illegal business, you have to be straightforward with your partners or investors except of course you are a con man. One thing about integrity is that it will take you places, never doubt it.
“To succeed in business, to reach the top, an individual must know all that is possible to know about that business.” – J. Paul Getty
“Good judgment comes from experience and experience comes from bad judgments.” – Dr Warne W. Dyer
“Becoming the richest man in the world is not championship, it is all about competence.” – Carlos Slim Helu
Of all the business success factors listed here, competence is the most important. Why? The reason is because without competence, all other factors are null and void. Even with all the capital, ideas and customers in the world; if you are not competent enough to handle them, you will lose them in due time. Now what is competence?
In the simplest of terms, competence is a combination of knowledge about the business, thorough understanding of the industry and experience built over the years. Competence is the key factor investors look out for before deciding whether to invest in a company or not.
10. Customer Loyalty
The reason you are in business is to serve the customers and if your business cannot serve customers, then it is dead on arrival. But serving customers is not enough to ensure a business’ survival and eventual success. To succeed, you need to raise an army of loyal customers and to achieve such; you need to make them a specific promise and deliver on such promise.
In conclusion, I want to state emphatically that if your business has all these factors; then there’s nothing really stopping you from reaching the top. However, you must note that attaining a status where you control these ten factors is not an easy task. It’s a task that requires time and dedication.