We always hear that 95% of all businesses fail in the first five years. While it might be interesting to understand the many reasons for business failure, it is more important to study the businesses that, against all odds, succeed. In a recent
study, businesses succeed at a much higher rate over time. For example, 75% of businesses succeed after one year, 45% after five years, and 29% after ten years.
Starting and operating a business is difficult and sometimes overwhelming. Often businesses are launched with a brilliant idea, done on the cheap, with sweat being the largest asset. The stakeholders are not only business owners and operators, but are often the administrators, the sales force and the service delivery team all at once. The hardest question to answer every day is:
“Where should we spend our time”?
The answer to this question can be gleamed from the data gathered from successful businesses. In other words,
“What is the common thread of businesses that succeed”?
Where do these businesses focus their effort?
Eight critical success factors have been identified as a common thread in businesses that not only succeed, but excel in their market place. Of the eight success factors, four were identified as mandatory:
1. Service-Directed Organizational Structure
2. High Energy
3. Flawless Execution
4. Clear Strategy
These mandatory qualities were not only necessary for success, but, if missing, were identified as an indicator of eminent failure. As one sees this list, we immediately think about the businesses that demonstrate their commitment to excellence. When we look at Outback Steakhouse, Wal-Mart, and Google we have no doubt that they have a service focus, high energy, nearly flawless execution, and an apparent clear strategy.
The remaining four critical success factors have been identified as optional or discretionary.
Stay tuned for the remaining four success factors.