What makes a business successful?
This question is perhaps less simple than it first appears. You might be inclined to shout ‘profit!’, and if you’re a shareholder, that may indeed be all that matters to you. But for business owners and entrepreneurs, the definition of success may not be one measured in dollars at all.
Money is a consequence of business success, not the cause of it. Business success is built on an appropriate amount of investment, sure, but it’s also built on talent, on strategy, on hard work and often on a little bit of luck.
In this article we’ll be taking a closer look at exactly what ‘business success’ means, what makes businesses successful, and how an organisation might go about realising that success.
What is business success?
While the meaning of business success will change from company to company, the most successful companies tend to have things in common.
Many tech giants measure business success not just by money made, but by the user experience that they deliver… which, if it’s great, will in turn lead to increased profit and market share.
Hedge funds and investment bankers see success as making their clients money, rather than themselves, because the former inevitably leads to the latter.
Understanding that people are their most valuable resource, many forward-thinking companies are beginning to measure success in terms of employee happiness. Contented employees build a business’s reputation as a preferred employer, helping them to attract the best and brightest minds, and in turn increasing the likelihood of future success.
What makes a company successful? Your definition shouldn’t be based on profit or increased market share – it should instead encapsulate those things that lead to profit and increased market share. Take a step back and identify the difference makers in your business, and choose those as your markers for success.
10 factors that contribute to business success
It’s one thing to define what makes a business successful. It’s quite another to realise that success. As a business owner or entrepreneur, you need to work to understand the factors that will contribute to the ongoing health and wealth of your organisation.
Let’s take a look at 10 of the most important.
1. Set a business goal
What is the main objective of your business - the overall goal that you’re working towards? Every business should know, in a quantifiable way, where they want to be in five or ten years’ time. It could be that:
You want to be the market leader in your vertical.
You want to offer your products or services around the country or world.
You want to grow your team to a certain number.
You want to run an entirely sustainable business with a small carbon footprint.
Once you’ve clearly defined your mission, you can then run your business in accordance with it.
2. Understand Your Customer Needs
Successful businesses meet the needs and wants of customers. They identify a pain point or a gap in the market, they conduct deep research on what people are looking for, and they offer a solution to suit. While it’s true that some companies have successfully created demand – fashion labels, tech companies, supercar manufacturers – they are the exception, not the rule.
Such a customer-focused approach to development can also lead to a more customer-focused approach to sales and service. In an ever more digital and automated world, human touch is becoming a real point of difference.
3. Research your competition
Some markets are more competitive than others. If you’re trying to enter a saturated market, you’ll soon find yourself racing to the bottom to secure business. It’s difficult to grow when you’re fighting for every morsel of food. Again, work to identify demand before committing to a path.
But no matter how innovative or left of centre your business is, you’ll always have some form of competition. It’s critical that you conduct competitor research to avoid being left behind or caught off-guard. You always want to be proactive, not reactive, in business.
4. Attract and retain the right talent
People are a company’s most important asset – clichés are usually clichés for a reason. Attracting and retaining the right people can have a greater effect on your business success than perhaps any other activity.
Do all that you can to get the best possible people on board initially, then take a structured approach to treating these first employees well. In doing so you’ll begin to develop your employer brand – your reputation as a place to work. If you paint a positive picture, you’ll find it far easier to attract and retain great people into the future.
5. Be transparent with your team
Gone are the days of autocratic, dictatorial leadership, where bosses barked orders without explanation. The most successful modern businesses work to build a culture of trust by being perfectly transparent:
Clearly outline your values and live by them.
Consult your team when you need to make important decisions.
Follow through on promises.
Own up to mistakes and commit to being better.
Get Started with Square Team Management
Empower your team and improve workflow for your business.
6. Become a decisive leader
But even in the most consultative and transparent of company cultures, leaders will still need to make the tough decisions when necessary. There are often times when business success is dependent on prompt and confident decision making, often without the luxury of all the information you might want or need.
An imperfect decision early is usually better than a perfect decision that comes too late. Business success is about using experience and gut feel in these moments, and committing to your call.
7. Learn to be patient
Don’t be distracted by a big and flashy sale, nor a particularly bad week, as these events only serve to distract you from your overall trajectory. Business success is an incremental process, one that demands quiet and consistent effort over the course of months or years. By taking the tortoise’s approach to growth, rather than the hare’s, you’ll minimise risk and build real confidence in your team.
8. Keep business documents
Record everything. It’s been said before that data is the oil of the 21st century, and it’s true. Between internal company and external market information, the answers to almost all of your business questions will be hidden within the zeroes and ones. And you no longer need to be a data scientist to make the most of this resource – smart tools like Square Analytics allow you to gain deep insights with a single click.
Documenting everything also allows your business to preserve ideas, establish credibility and resolve disputes.
9. Build strong business relationships
Your professional network can be an incredibly valuable thing. The relationships you build with mentors, thought leaders, suppliers, customers and other industry players can be a source of business, talent, ideas and advice. Make yourself known in your industry: get active on LinkedIn and attend in-person events.
10. Be resilient
No business has ever experienced pure and unadulterated success. There are always missteps, knockbacks and bits of bad luck. Success or failure isn’t shaped by these events themselves, but rather by how you respond to them.
Resilience is perhaps the most abstract factor on this list, but it’s one that a business owner or entrepreneur must work on if they are to succeed. Recognise that you learn more from failing than you do from smooth sailing, and try to see setbacks for the opportunities they are and the lessons they provide.
What is business success? At the end of the day, your definition can be whatever you want it to be. Realising that success is then a matter of breaking your definition down into actionable parts.
Ready to shape your own version of business success? The team at Square is ready to help!