What Makes a Business Successful?
Achieving success as a business or company can feel like a major achievement, and it is. Whether you are running or considering a sole proprietorship or an incorporation, you may wonder what the secret is to a successful business. Often, businesses are challenged to keep the lights on and balance their expenses with their revenue, let alone turn a profit and feel they have achieved success.
With millions of entrepreneurs in Canada focused on taking their business ideas to the next level, the field can be competitive, especially long term. After all, there are no guarantees in the small business world, no matter how incredible your approach might be. This all might leave you wondering what makes a business successful and how you can get your business to that place. Turning a great idea into a successful business takes grit, determination, and hard work. There are also a few other key qualities of a successful business. Let’s explore them further.
Having an innovative business idea
Many businesses spring from a great idea that is not only unique but also innovative. This means your business idea will offer consumers products and services that they cannot already access or present them in a more accessible way. An entrepreneur, you don’t want to be doing what everyone else is already doing or offer a product or service that is not going to feel new and fresh.
Entrepreneurs are often motivated to start a business because they recognize a need or want that is not being met currently in the market. They’re unconventional thinkers who aren’t afraid to go beyond the status quo. Your business idea should meet the challenges of the target market you are trying to reach and surpass their expectations to be successful.
One way you can determine if your business idea is viable is to use the value proposition canvas. Maybe you have many different good ideas and aren’t sure which one to pursue. The value proposition canvas is a strategic tool that can help you determine if your business idea matches well with the expectations of your target market. Many entrepreneurs, corporations, and organizations use this tool to ensure they are entering the market with the idea that will work well and lead to success.
Following a clear vision
Another important key to successful businesses is a crystal clear approach to the vision and mission of your entrepreneurship. Maybe you spend time creating a vision board or a mission statement for your business. Or perhaps you create an elevator pitch, where you can outline the key elements of your business, such as the unique service you offer or the goods you sell as part of your venture.
Your business’s vision should connect to the mission of your entrepreneurship, such as the short term and long term goals of your business. This way, whenever you start to feel overwhelmed, unsure or stressed about your business, you can return to the vision and mission of your work. Your vision acts as an anchor, you can return to when you need to be reminded of why you jumped into entrepreneurship in the first place.
Creating a solid business plan
Often, the answer to the question, “What makes a business successful?” has to do with the strength of your business plan. Your business plan acts as the blueprint for your venture, providing measurable goals that you are accountable for as a small business. Though it may seem formal and boring to sit down and create a business plan, it is a critical document that can help you turn your ideas into a successful business.
Many business owners use their business plan to meet goals and stay motivated, especially when they start to drift into the weeds and sift through the day to day tasks of running their business. Your business plan is also the place where you can outline a contingency plan in the event of a major challenge or issue, so you know how to tackle these factors and stay the course.
Funders and investors will often request to see your business plan and be more interested in supporting companies with a blueprint firmly in hand. Creating a business plan is one of the most important steps for an emerging business and sets the foundation for success.
Developing missing skills
Getting into entrepreneurship means you will have to wear many hats, from bookkeeper to customer service rep to manager. Though you likely already possess some key skills to do your job and be your own boss, there are some you may not have. Successful businesses thrive because they recognize the gaps in their skillset and embrace the opportunity to learn new things. Developing the skills you feel you come up short on or are missing can help you feel more confident and secure.
Part of learning these missing skills is doing your research to figure out how you can gain them. Maybe this means taking an online class to brush up on your bookkeeping skills or reading books about improving the user experience for businesses. Don’t be afraid to seek out resources to help you grow and learn new skills so you can apply them to your small business.
Finding the right talent and network
Many successful businesses are made up of talented people who come together to make a great idea a reality. Part of your role as a business owner is to identify that talent and invite them to join your team. Hiring the right employees for your small business, and collaborating with other people in your community can help you expand your network and achieve success.
Maybe you recognize an applicant with excellent people skills who would be perfect for helping customers and representing your business to the public. Or perhaps you have employees who are great at working with suppliers and vendors, so you position them in those roles.
Though you may not be building a team of talent right away, especially in the early days of your business, you can still reach out to talent in your community for support and advice. Often, collaboration with others can result in some surprising and unique products or services, a key element to business success.
Being financially prepared
For many companies, maintaining their finances can be a challenge, especially if they are already swamped with other day-to-day tasks. As you get your business off the ground, make sure you have a good accountant so you can manage things like taxes, investment, and funding properly. You should also set up a business bank account and have a financial plan in place so the day to day operations of your business is less stressful when it comes to money.
Many successful businesses have startup capital in place, so they are fairly financially secure when they enter the marketplace. But even if you don’t have a lot of money, to begin with, you can still ensure your financial processes are in place and running smoothly. Something as small as invoicing a supplier properly or having a document management system can help you stay prepared financially and makes a business more likely to succeed.
Building a strong company culture
Many successful businesses will have a strong culture, which can dictate how they treat their employees, how they approach customers, and how they manage the user experience of their product or service. What makes a business successful has a lot to do with the culture of their organization or company, as this affects how they are perceived internally to employees and externally to customers.
As a small business, it’s important to consider what type of culture you’d like your company to have and put things in place to ensure it thrives. Maybe this means you take a work from home approach rather than an office space for your business, creating a flexible culture for employees. Or perhaps you encourage your team to try products before they sell them, building a culture of transparency and accountability.
Creating a strong company culture takes time, and there are many resources out there to help you better understand how to build one. But it is definitely a major factor when it comes to making a business successful long term.
Maintaining excellent customer service and outreach
The success of your business often depends on how well you connect with customers and meet their expectations. Positive customer experiences will boost your sales and raise your profile in the marketplace as a trustworthy, high-quality business worth buying from. No matter the products and services you are offering, if you have poor customer service and outreach, it can be difficult for you to achieve your goals and be successful.
Part of excellent customer service is encouraging customers to interact with your brand on a regular basis. This may mean having an advertising and marketing plan in place so you can reach as many customers as possible and ensure they know how great your business is. You should also have strong business branding, so you appear consistent, trustworthy, and professional to customers.
Many people in business forget that their relationship with customers should never be taken for granted. After all, a marketing plan is only effective if you also have strong word of mouth, where customers recommend you to others because your product or service is worth bragging about. Make sure customers are eager to give you positive reviews to anyone who asks and recommends your company over others.
Analyzing your competitors
Successful businesses are aware of their competition in the marketplace and use this knowledge to improve. Do your research on similar businesses in the marketplace and look at how other companies are managing their products, services, and approach to customers. Keep an eye on successful businesses who are trying to appeal to the same target audience, and notice what they seem to be doing right. Don’t be afraid to question if you are taking the right approach to your business and adjust to compete better with others.
Many businesses find success when they stay aware of their competitors and work hard at improving their approach, so customers are encouraged to choose them over any other options. For this reason, analyzing your competitors is one element that can lead to success.
Being open to change
Another way businesses find success is by being adaptable and embracing change rather than running away from it. After all, the marketplace is ever-changing, especially with new products and services available to customers every day. Your small business should also always be changing and adapting, so you stay one step ahead of your competitors.
This may mean embracing technology as part of your business in ways you’ve never done before. Or it may mean finding a passion for a new facet of your business or for a different product that may appeal more to customers to increase sales. Companies that get used to pivoting and embracing change are more likely to stand the test of time and thrive.
Taking calculated risks
Along with embracing change, successful businesses are often open to taking risks that make sense financially. Before you jump into a risky situation as a small business, consider the pros and cons, as well as the long term benefits of your choice. Perhaps you solicit opinions from trusted advisors and your accountant or lawyer before you take the risk. You may also consult your team to see if they feel it is a worthwhile risk that won’t result in a negative outcome the business can’t handle.
Measuring risk and taking them when they feel right can help your business grow and expand in ways you could have never predicted. It can also lead to business success on a larger scale.
Accepting and learning from feedback
Feedback can be invaluable for a business, especially an emerging one that is new and still finding its footing. Though you may be fuelled by a passion for your small business, it is important that you seek feedback on your product or services and work to improve it.
Try not to get defensive about feedback, particularly if it is coming from someone you trust or an advisor who may have more experience. Instead, try to view feedback as an opportunity to learn and grow your small business so it can thrive.
Never giving up
Perhaps the most important answer to the question, “What makes a business successful,” is the value of hard work, perseverance, and never giving up on your business. Yes, companies come and go, and money can be a challenge for any business, no matter how big or small. But often, successful businesses commit to their dream and use their passion to achieve their goals. They stay motivated and accept failure as part of the process.
As a small business, you’ve worked hard to turn your ideas into a viable opportunity. Don’t give up on your dream, even when it seems impossible. Each challenge can take you one step closer to success.
Now that you have a better idea of what makes a business successful, you should feel ready to apply these tips to your own venture so you can work towards success as an entrepreneur.
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This article offers general information only and is not intended as legal, financial or other professional advice. A professional advisor should be consulted regarding your specific situation. While the information presented is believed to be factual and current, its accuracy is not guaranteed and it should not be regarded as a complete analysis of the subjects discussed. All expressions of opinion reflect the judgment of the author(s) as of the date of publication and are subject to change. No endorsement of any third parties or their advice, opinions, information, products or services is expressly given or implied by Royal Bank of Canada or its affiliates.