Characteristics of Successful Businesses

Only half of new businesses survive five years or more and only one-third survive more than ten years. Why do so many people choose to work for small businesses? It could be because small businesses attract workers who want to be more creative, want more freedom with less oversight, or are looking for opportunities for quick advancement and on the job training.

With so many people involved in inherently transient employment, here are some questions to ask yourself that may help you better run a more successful business.

The first question to ask is what kind of success are you looking for? Some businesses are designed to be trendy or seasonal. Fidget spinners made a lot of money that one July but I would hate to be the guy still trying to sell a truckload of those. Ask yourself, is your business based on a trend or is it based on a sustainable need? If you are targeting short term profit, how quickly could you liquidate and realize those gains? The tourism industry around the coast is fickle, flighty, and subject to pressures completely outside your control so consider having an exit strategy.

If your business is non-seasonal, are you prepared for those slow months or (heaven forbid) another government mandated shutdown? Successful businesses know their market and are prepared for the high and low seasons as well as the unexpected barren seasons.

Some businesses are just dang lucky, in the right place at the right time with the right idea. If you want to be one of these businesses you need to continue having ideas and acting on them until one sticks.

Forward thinking

Few businesses are immune from obsolescence, to survive you need to think ahead. Blockbuster famously turned down an offer to buy Netflix in 2000 for a mere $50 million; it seems foolish twenty years later considering Netflix is worth over $200 billion and Blockbuster is rummaging in alleyway dumpsters for late fees, but at the time perhaps Blockbuster felt invincible.

What change in your industry could render your business untenable? Could a low cost competitor gain a market share and cut you out? Is there a better way to do what you do? If you think ahead you can anticipate these changes and implement them; if you don't, someone else will.

When you think ahead you are more likely to implement changes that improve your business, success is often driven by change and the constant drive for improvement.

How do customers find you? It used to be all you needed was a storefront on Mainstreet for customers to come in the door, but luring customers today is more like turkey hunting than pig farming. Successful long term businesses are built on quality products (or quality people if you don’t sell a product), which breeds customer loyalty, which results in return customers, referrals, and reputation. But a quality product alone isn't enough, you need quality marketing.

If you have a good product you cannot assume it will market itself, it still takes effort to sell them because the market is flooded with poor products that are better marketed then yours. There are numerous examples of superior products that lost out to lesser ones due to inflexibility, poor marketing, bad timing, or plain bad luck. What is your marketing strategy? Is it person-to-person relationships, banner ads, search engine optimization, social media, physical storefront, billboards, mailers, radio or tv commercials, cold calling, or franchise reliance?

Many successful businesses have excellent people in these roles: the COO and the CFO.  The operations person runs the show, makes everything happen on the front end, is usually the one with ideas and boots on the ground. The financial person keeps things moving and handles all the back-end nitty-gritty things like compliance, insurance, and finances. Both roles are essential and often, especially in start ups and small businesses, the same person performs both roles. If you are doing both roles, how can you get to a point when you can hire your 'other half'? Honest and hard-working people in these leadership roles can turn a good business into a great one.

Having the right insurance in place when the wrong things happen can be the difference between survival and destruction. If you don't have a good relationship with an insurance agent or insurance advisor, make it a priority.

There are of course many paths to success and no flawless strategy, the correct one to use is whichever one works for you.

https://www.sba.gov/sites/default/files/advocacy/2018-Small-Business-Profiles-US.pdf?fbclid=IwAR2mlIFIyWGX0RwJtDR6CDT21cpreCyXtS15N2XJgHNlJ7n8SVYKBcxfd7U Blog Archive - Search Blog

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