I have a come across many hundreds of businesses if not thousands in my professional role as an Accountants and unfortunately I can say that by far the majority of them are not what I would consider great businesses, ie one that provides enough return to the owners, time to spend with their friends and family and little if any stress.
I have come across a few businesses that do provide what many of us in business seek; which is a sustainable and enjoyable business with high returns that runs without the owner for prolonged periods of time. Of course this is not what every business owner wants from their business, for example those in the caring trade such as Vets & Doctors are often in business with the primary aim of caring for people rather than making money.
Invariably those of them that are successful share one of not all of a small set of characteristics, so what is this magic formula? I’m sorry to disappoint you but like many of the best things in life the keys are quite simple;
- Mastery of the industry; if you make hamburgers your hamburgers should be of a consistent and high quality, if you are a dentist your dental work should be great. In all businesses other parameters like customer service, presentation of you goods and services etc should also be of a consistent and high quality.
- Niche, these days in particular you need a niche. Every business I have ever seen succeed has had a very clearly designed Niche (or target market)
- Leverage, to truly reach your goals you need to leverage your time and resources, once you have a winning formula you need to achieve scale. The main forms of leverage in business are money leverage (using someone elses money) and people leverage (eg hiring staff)
In every case when I have seen a business that I consider a great business these three factors have been in place to varying degrees, how does your business rate? In many cases an existing business that is not living up to it’s potential can be improved by working on these three areas although it can take a lot of work. Sometimes for example if your business does not have a strong Niche it can be hard to improves the business in it’s current form and you may need to re-consider your business strategy, of course I could be wrong and you could have a business that kicks arse despite not having the three factors discussed above but if so please let me know!