The success of every business hinges on its strategies. Strategies are those courses of actions, including the specific objective and business ethics that an entity engage in in a bid to outperform its competitions. In this article, I have talked about 8 key factors that will almost guaranty success in today’s business world.
For a business to succeed, it must have a business strategy – a large scale, future oriented plans for interacting with the competitive environment to achieve company objectives. These strategies will ensure that the business have the capacity to spot good investment opportunities and perform the necessary investment appraisal on those business opportunities and then go ahead to make the investment profitably.
Company’s wide objectives are those which are concerned with the company achieving her overall goals as a whole. The objectives should be explicit, quantifiable and attainable (i.e. capable of being achieved). The objectives of a company outline the expectations of the company. A company is only successful if it meets and surpasses all of its objectives (financial and non-financial).
The objectives should relate to the critical key factors for business success and avoid avoidable business risks which is the main focus of this article.
8 (Eight key Factors for business success
The 8 key factors for business success in this our ever changing world that have been polarized by technology are as follows:
- Profitability (return on investment): it will all boil down to nothing if a business venture is not operating profitably. Even charitable organizations still have an eye on their operations to ensure that resources are not being misappropriated, so why wont a for-profit business?
It has long been established that the main objective of every business is to maximize profit or shareholders wealth. In today’s competitive business environment, companies that succeed are those that manage their cost effectively while at the same time meeting the needs of their customers.
In the past, profitability used to be achieved by simply increasing selling price, which is no longer feasible in this internet age where customers determine the price of virtually anything they buy.
To earn profit, companies need to perfect processes that responds to increases in the size and number of competing companies; to the expanded role of government as a buyer, seller, regulator and competitor in the free economy; and to greater business involvement in international trade, perhaps the most significant improvement in these management processes came when “long-term planning”, “planning, programming, budgeting”, and “business policy” were blended with increased emphasis on environmental forecasting and external considerations in formulating and implementing plans.
2. Market share: to be seen or noticed in an ocean of competing companies, a business entity must be big enough. This is akin to having a sizeable market share in order to be successful in business world. Another critical success factor of a business is its market share.
Market share means the portion of the overall market controlled by the company. Though this is dependent on the type of business that the company is doing. Some kind of businesses by nature does not require you controlling a large share of the market before you can be successful in it.
But it is still a critical success factor to always consider. If you are thinking of success in business, think of having a substantial market share.
3. Growth: It is a natural law that if you don’t grow, you will decline. This natural law seems to be more relevant in business than every other aspects of life. A company that does not grow cannot be successful. Growth in this context means continual advancement and expansion. Cash flow Cash you will agree with me is the life-blood of every business.
4. Cash flow: As a human person, imagine what happens to you when blood ceases to flow through your vain. It will eventually lead to death. Same is applicable to businesses. In fact, a company can be profitable and still die if it does not have enough liquid cash and its equivalent to operate with. This liquid cash is called the working capital see roles of working capital for more on this. Companies that are successful manage their working capital very well.
5. Customer care: Customers are no doubt the king in every business. For a business to succeed, it must pay close attention to her customers. Paying attention to customers is called ‘Listening to the Voice of Customer (VOC) in Lean Six Sigma methodology. We have gone past the era when customers care decisions were taken lightly. Today, professionals in that field (that is customer care professionals) make decisions concerning the affairs of customers. Accountants’ role in customer care has also gained traction.
6. The quality of company’s products: So many people confuse themselves today saying that you can sell anything to anyone in this internet age. I don’t know how true this is but the fact still remains that the quality of your product is the backbone of the sustained patronage you enjoy from your customers in the long run and the referrals that comes with it.
Your company can have the best customer care in the whole world, if its products or services are not of the quality and standard the masses wanted, the customers will not only drift to their competitors, the long-arm of the law will equally lash on the company through its Agents such as NAFDAC (National Agency for Food and Drugs Administrative Control) and SON (Standard Organization of Nigeria).
7. Industrial relations: It has been an established fact that businesses are examples of open systems that we have. This means that it must interact with its environment or die. This is more significant in today’s world of “green everything”- green marketing, green accounting, green investing, green production, even “green behaviour”. Laugh! A company needs to take its brand management very seriously by paying required attention to all of its activities.
For you to be a success in today’s business world, you must spend quality time on issues relating to how your company relate with its environment – both micro and macro.
8. Added value Profitability: One term that has gained momentum in business today is ‘value added’ – value added has become a perspective in which a business is seen as a chain of activities that transforms inputs into outputs that customers values.
Customers’ value drives from three basic sources: activities that differentiate the products, activities that meet the customer’s need quickly and activities that lower costs. It goes without saying that value chain analysis (VCA) attempts to understand how a business create customer value by examining the contributions of that value.
From the above analysis, it is clear that any company that is conscious of success should not be found wanting in any of these key areas. It also boils down to one thing – all activities leads to one thing; Insurance of bottom line, good decision making and sustenance of business.
Knowing the key factors for business success is one thing, doing the right thing to see them actualize is another thing. I trust that you will take action today in these respects. If you are interested in enhancing your business skills, you may want to enroll for St. Mary’s online degree to learn what it takes to survive in today’s competitive business world.
If you have problem with any of these issues, seek the assistance of a professional today! or better still post your question on this article as comment.
This is a well written article on the business success factor. Any business that fail to follow the principles in this article will in no distant time have no choice to fail.
Well done accountant-next-door!!!