What makes a business successful? Why do people find themselves in difficult financial situations in business they cant get out of? Running your business is a tough task. There are variables that can take you down if you are not prepared, and there are difficult times that can make one quit the business venture. We would like to look at the five Do’s and five don’ts that successful business run by. These points can be used to develop the business you are creating.
To understand where we are going to understand the pointers that successful companies use, a company called Nielsen conducted a survey that included 1,139 Canadian small and medium-sized companies. An analysis was conducted to find out the difference between the top 20% of the leading businesses in every industry and the others. We have divided these findings two ways.
List of Do’s:
- Have a Business Plan and Track Your Progress
Where would you like to see your business in the next five years? What are the steps your company needs to take to get here? How will you assess the progress you are making? Leading business usually have a strong medium-term plan that has the execution points of how the company will grow. This makes a business follow the progress it makes on a regular basis with multiple metrics to measure its performance.
Innovation is a key ingredient for the successful business. In the Survey, the study showed that:
- Successful companies adopted new technology fast.
- Offered new products and services frequently.
These businesses also reported that the competition with their counterparts was not as important as the innovative practices they employed.
3) Seek Advice
It is not possible for your team to have the right knowledge for your business in each situation. Successful businesses have a trend of forming advisory boards to seek advice on business growth and other related issues. Alternatively, other business use external consultants. The importance of an advisory team cannot be stressed enough; there are huge benefits that are achieved in any business interns of productivity and sales when advice is sorted.
4) Create and Sustain Strong Relationships with Suppliers
Relationship with suppliers was the most important relationship that businesses kept according to the survey. Even though customer relationships is also important, a business is valued by its product. Therefore, suppliers help to create products and that’s why they are important.
5) Recruit That Best Talent and Engage Them
More than 60% of the successful companies that were interviewed stated that they took many months to hire strong candidates for key positions and roles. These companies added that they offered a good pay and benefits package, a great working environment and a positive working culture to keep their teams motivated and productive.
The same survey surveyed 118 companies that had gone under because of financial challenges.
List of Don’ts:
- Diversify and avoid relying on few customers
When a company loses a major consumer, financial troubles start to trickle in, and this is the reason as to why you don’t to rely on a small customer base.
2) Don’t prepare a contingency plan when problems start shooting up.
Events such as loss of important employees, increase in raw material cost or disasters such as floods or fore can cause financial challenges for companies. If you had not prepared a contingency plan early enough, you could fail to come back again.
3) Don’t Ignore Market Dynamics
Businesses always adapt due to changes in technology, production techniques and even a shift in customer preferences. In the recent years, digital transformation/digital transformation framework has improved a lot of changes in the way business is done. If you fail to adapt, you can make the business to fall.
4) Don’t Call for Help When it’s too Late
Financial troubles can happen at any given time. In successful companies, an early action plan can make a turnaround easier. When you restructure, you normally seek assistance from the bank and the company stakeholders. That is why you need to be honest and transparent with them. You need to have a good relationship with your stakeholders so that they can believe in your ability to pay back.
5) Don’t Hire Poor Financial Management Personnel
When you have poor financial management expertise, it can run your company into deep troubles. To run a good financial management plan, you need to get the right person with the right knowledge and you need the right tools.
Running a business needs a lot of planning from the start so that you are aware of the steps your business needs to make in any given situation. A business cannot be run by one person, ensure that you have the right team to count on to build the business to a venture that can last a long time.