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?
1. The experience and skills of the top managers. Over half of business failures are directly related to managerial incompetence.
2. The energy, persistence and resourcefulness (the will to make the business succeed) of the top managers. Many business owners have failed or come close several times before their “instant” success. Don’t give up.
3. A product that is at least a cut above the competition 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.
4. 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 dollars.
5. Deal-making skills to sell the product at the highest possible price given your market. It comes down to your customers’ perception of the value of your product and sometimes the power of your personality.
6. The ability to keep developing new products to retain and build a customer base. Consider gradual product development based on improvements to the current product line and sold to the current customer base.
7. Deal-making skills 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.
8. 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.
9. Superior location 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.
10. A steady source of business during both good economic times and downturns. Over the long term, develop a product mix that will include winners during good economic times and other winners when times are tough.