Most businesses fail in the first five years for a myriad of reasons that range from bad planning and lack of strategy to poor cash flow management or low sales.
Businesses that survive the precarious first five years often share the same key success factors and have perfected key business processes that have an impact on their customers, employees and revenue.
A business process is defined as an activity or set of activities that accomplish a specific organisational goal. Depending on your individual business, some of the key activities may include:
- Developing vision and strategy
- Developing and managing products and services
- Marketing and selling products and services
- Delivering services
- Managing customer service
For business owners looking to grow below are the top 5 success factors of business.
1. Leadership
One of the most important responsibilities new founders have is providing a clear vision strategy for where the business is heading. This is also invaluable when it comes to setting goals to help you get there.
“Leadership is all about providing a vision and a direction for the organisation and the ability to inspire people to go there with you,” says Nonkululeko Gobodo, CEO and head of leadership consulting of Nkululeko Leadership Consulting.
He adds, “People are looking up to you and at every juncture in the organisation, or the growth of the organisation, you have to provide that leadership”.
2. People
As the popular saying goes, people are your real competitive advantage in business. Smart business owners understand that passionate team members with a strong work ethic are the foundation of any successful business.
Matthew Putman who is the founder of Durban-based iKhokha, a mobile POS system for small-to-medium local businesses previously shared how they identify the right team fit.
“[They are] ambitious and smart team players with manageable egos, who had a desire to grow through taking on challenges outside their comfort zone. Cultural fit and the above character traits were more important for us than experience.”
3. Marketing
Business owners need to market their businesses effectively and promote their products and services.
Brand building is essential to the value and development of a business and can help it stand out from competitors.
There are various ways you can market your brand, this may include: website creation, SEO, social media, influencer marketing and paid advertising, among others.
4. Operations
The early days of any startup are a time of great innovation and breaking new ground.
“As a startup, you can get away with undocumented, informal business processes while you figure things out,” says Gerhard Hartman, Regional Director of Mid-Market: Africa & Middle East at Sage.
This, however, has to change as the business grows. Hartman adds, “It’s a matter of time before ambiguity slows you down and creates internal inefficiencies”.
An important part of standardising operations is to build formal systems and processes which the right software systems can help with. Well-run businesses benefit from increased compliance, productivity and reduced risk of reputational damage.
Related: Starting a Business in South Africa
5. Finances
The ability to master your business’ finances is a critical part of running any successful enterprise. For many entrepreneurs, this aspect of running a business can be the most daunting.
Well-maintained financial records are a key success factor of a business. They provide an accurate picture of how well your business is performing and help business owners make more informed decisions.
Business owners should make use of cloud-based accounting software to easily automate and speed up the calculations of business expenses such as tax and payroll and ensure that these are accurate.
