Running a successful business isn’t easy!
A surprisingly large number of businesses fail. Globally, 50% of businesses fold in their first year, and 80% close within five years. Here are some of the key success factors to sustain a business:
- Improve your business skills
The “figures are scary”! These closures are not because the entrepreneur is not bright. Most businesses fail because of a lack of business skills. Businesses fail because people don’t have skills in advertising and marketing or they lack sales skills to close the deal, or don’t understand pricing, or labour laws – or they simply don’t understand the difference between revenue and profit. Business owners need to complement their existing skills set and learn business skills.
- Anticipate changes
Current success doesn’t guarantee future success – the bankruptcy of film and camera giant Kodak is a great example. They never ‘clicked’ or changed their film-based business to suit the changing digital environment, and the market moved faster than they did. The way you do business now will not be suitable in a few years’ time. Businesses should try to anticipate changes in their market, and adjust accordingly.
- Diversify your income stream
Have different products or services, and sell to a number of different markets. That way, when a market change does occur, you will still have an alternative revenue stream. For example, the global financial crisis hit the US and Europe the hardest, and businesses with sales focused on those markets were badly affected, while those with a wider market were able to keep on trading.
- Passion is not enough
Entrepreneurs need passion, but passion alone does not guarantee success. You also have to fulfill a need. There must be a market. Enough people must be willing to pay for what you plan to offer. Businesses also need to constantly look for new opportunities.
- Look after your employees!
There are more key success factors – what are yours?