The 9 Success Factors
- January 22, 2016
- Posted by: Phoenix Consultancy
- Category: Business plans, Finance & accounting
Nine key factors that grow business worth to $3m+
Many businesses set out to grow to become a big businesses. The reality is that most businesses grow and enjoy a reasonable level of success due to the technical expertise of the founder(s). However, over a period of time they find it hard to maintain that level of success year on year.
Let’s take a closer look at 9 proven success factors that generate business growth AND create value to $3m and beyond in the business itself.
Focus on your target audience. When you are specific, people will find you. A manufacturer introducing a new line of products will likely need a lawyer with patents experience. If a patent lawyer was advertising general law services they will never be found. Providing engineering solutions for instance is not a niche but a field. A more specific niche may be “specialists in removing water from underground mines”. Choose a niche and focus on it.
Unique perceived benefit:
Every business must have a unique point of difference or unique perceived benefit (UPB) in the eyes of its customers to generate sizable revenues and profits. UPB could be having an expert status, customer service, quality, solution to a problem etc.
Without a UPB you are competing on price alone and there will always be someone who can outbid you! Develop a UPB which is attractive to your target audience and which maximises value to the customer. You will be amazed at what it can do to your bottom line!
Size matters when you want to create a successful business. Sizable businesses are built on high levels of automation and efficient systems & processes relative to their competitors. This places less reliance on owners to keep daily operations running smoothly and such a business demands higher value compared to where the owner is entrenched in the business.
Every business needs a good Return on Investment (ROI) or a good profit margin to be sustainable. Profit is a function of operating in a niche, having a UPB and having efficient systems relative to the industry competitors. You can increase your profit margin by charging a premium for your UPB, keeping a check on your costs and/or increasing your prices by 5% to 10% every year. For many a 10% increase in sales price will equate to a 50% increase in profit!
Many businesses lack skills or expertise in key areas. Contrary to using the right person for the job, business owners compensate by extending themselves to cover those spots creating greater exposure instead of reducing it. Creating a successful and valuable business is a team sport. Hire the right skill-set combination–people who have proven themselves. Remember to delegate and manage.
Accurate and timely reporting of the financial information of the business is critical to timely decision making, cash management and optimizing profit. Cloud accounting systems such as Xero are relatively easy and inexpensive to maintain while providing for accurate and timely reporting no matter where you are!
It is common to see businesses that produce lower profits as they grow bigger–instead of the other way around. It is critical to have systems that enable your operations, finance and marketing functions to scale with growth without adding complexity and significant cost.
Today’s cloud systems like Salesforce, Office365, Dropbox, WordPress etc., allow embedding inexpensive systems in all areas of your business to capture meaningful information that helps in decision making processes, informing your customers and nurturing new prospects.
Most businesses tend to provide the same service over & over to different clients but expend their resources each time. Leveraging is about doing something once that you can use or sell over and over and is an essential part of creating a $3m+ business valuation.
Document all the processes within the business and save them in a central server or in Dropbox ensuring regular updates. Use videos to record the message once to inform your customers or to train your employees. Use email systems like Mailchimp to send emails to your entire database and track them in one go!
Maximize the lifetime value of the customer from repeat business, secondary sales, upselling or referrals. This can be done by ensuring the customer is wow’ed at each touch-point with amazing customer service or same day quotes. Communicate with your customers with regular frequency and ask for referrals!
You may very well already know these 9 key success factors. The real question is…Are you diligent in applying them in your business every week?
If not, then ask yourself why? Start today, review a new area every week.
Originally published on LinkedIn on 5th July 2014.