All businesses are unique — small businesses especially. While some sort of uniform algorithm would certainly be helpful to determining the keys to running a successful small business, the best many small business owners can hope for is to learn from their peers and by studying what other businesses are doing right. By examining these common threads between successful small businesses, small business owners can cull the secrets of success and apply them to their own business models, learning what they should and should not do.
So what makes a small business a success? Here are three keys to success that many thriving small businesses share:
Knowing Your Product
Did you know that 11% of business fail due to a lack of understanding of the goods or services they offer? As a business owner or employee, this is simply unacceptable. Not only does this make you a weak asset on the floor with customers, but it can lead to a waste of money and incorrect pricing. Instead, successful small businesses educate themselves in all facets of a product or service, such as financial ratios by industry logistics or financial statement trend analyses. With the right tools and planning software — such as business valuation software and budgeting and planning software — in place, it is easier to be successful.
Having Strong Leadership
Statistics show that 30% of businesses fail due to a lack of managerial experience. When a manager is unable to lead their employees, it becomes a negative chain of command and will trickle into the rest of the business. Successful companies have experienced leaders that are willing to challenge and inspire their team members to be their best. Additionally, an experienced manager is well versed in good credit practices, reviewing important data like financial ratios by industry, and money management.
Having one good product isn’t enough to make a sustainable business. Even if your single product or service is a hit, you will eventually need to look for alternative sources of income for your business. Successful small businesses diversify their assets. In turn, they are able to avoid sudden financial crises.
Running a small business can be difficult, but it can also be extremely rewarding. Just remember to work smart and to constantly seek knowledge and growth.