‘Startup’, ‘Business’, ‘Entrepreneur’, ‘Founder’, ‘CEO’, and all these words are the new norm. Everyone is an entrepreneur. Yet, only a handful of businesses succeed.
Two primary reasons why companies fail are:
- Either the product/service is terrible.
- Or, the mind behind the business can’t make it happen.
In short, the kind of businesses that don’t have any of these problems are the ones that make it big. Such companies have characteristics that defy any of the two possibilities. Some of such attributes of businesses that succeed are:
1. They have their USP
A unique selling proposition (USP, also seen as a unique selling point) is a factor that differentiates a product from its competitors, such as the lowest cost, the highest quality or the first-ever product of its kind.
Having a USP is of utmost importance for any business, and the ones that succeed are well aware of what they have to offer. Having a USP:
- Acts as a differentiator and keeps you apart from the market.
- Supports the Mission of the company.
- Attracts customers for that special benefit.
Another similar factor a successful business has is a Unique Value Proposition. Combine both, and you have an answer to the first failure-problem, i.e., “A bad product/service”.
2. They double down on marketing and branding
Good businesses know their USPs, and they take no time to put it out there. Marketing and Branding, alongside an excellent product/service, is what successful businesses choose to invest in right from the start.
The essence of any successful business lies in marketing. Good marketing = Successful business.
Marketing helps them generate sales. Branding adds up the reputation for the offerings. Marketing and Branding, combined, boost the growing-business factor of any company. And the company that doubles down on both is bound to be successful.
3. They think long-term
Any business that wants to make it big has to think long-term.
The most exceptional example one can give of long-term thinking business that made it big is Amazon. The success of Amazon lies in not thinking about the present. Here’s an excerpt from one of the letters Jeff Bezos sent to the Amazon shareholders, which shows the thought-process of any successful business:
To our shareholders:
Long-term thinking is both a requirement and an outcome of true ownership. Owners are different from
tenants. I know of a couple who rented out their house, and the family who moved in nailed their Christmas tree to the hardwood floors instead of using a tree stand. Expedient, I suppose, and admittedly these were particularly bad tenants, but no owner would be so short-sighted. Similarly, many investors are effectively short-term tenants, turning their portfolios so quickly they are really just renting the stocks that they temporarily “own.”
This subtle difference in thinking helps some companies make it big.
4. They keep the customers first
Another excerpt from the same letter goes:
We emphasized our long-term views in our 1997 letter to shareholders, our first as a public company,
because that approach really does drive making many concrete, non-abstract decisions. I’d like to discuss a few of these non-abstract decisions in the context of customer experience. At Amazon.com, we use the term customer experience broadly. It includes every customer-facing aspect of our business—from our product prices to our selection, from our website’s user interface to how we package and ship items. The customer experience we create is by far the most important driver of our business.
The customer-first approach helps get better overall returns, either in the short term or long-term. This approach
- Increases retention rate.
- Gives positive word-of-mouth advertising.
- And reduces customer acquisition costs.
Therefore, companies that keep the customer first makes it big.
5. They are willing to take risks
Innovation brings USP, and Innovation is the synonym of taking risks.
Businesses that take risks, maybe by doing R&D or by merely emailing the out-of-their-range clients tend to succeed. Risk-taking or calculated risk-taking is particular, is the cornerstone of any successful business.
6. They re-invest their profits
‘I’ in ‘ROI’ is of super importance. To keep the business engine running, investment is needed. And the best source of continuous investment is profits/revenue. Reinvesting means:
- Less dilution of ownership.
- More capital to generate even higher profits. I.e., More budget for taking risks, marketing, advertising, talent acquisition, etc.
- Scaling of business: Small to Mid and Mid to Large.
Long story short, businesses that reinvest their profits make it big.
7. They cut costs
One of the common things you can notice in a small business that succeeds is their ability to eliminate unnecessary costs. For instance, such startups/small-businesses never buy a big office space as soon as they get funded; They rent out a virtual office and invest the remaining in something more meaningful– something that can help speed-up or scale-up the process.
To keep it brief, “Reduced cost is increased profitability” is one of the motos of companies that make it big.
Some characteristics of ‘how a business is run’ or ‘what the business is’ give glimpses of whether it will succeed or not.
To wrap up this article, let me briefly list down those characteristics:
- Succesful business, when starting out, never waste a penny. They cut the cost and invest the remaining in more meaningful things than buying a pool table.
- They reinvest the profits made by investing in those meaningful places for even more returns.
- Each of these decisions emphasizes the current USP and some part of it goes in the risk-taking process, which in turn innovates and broadens the USP.
- And during the whole process, the customer is the king for them.
Overall, the businesses with the characteristics mentioned above are the ones that make it big. What according to you boosts the business’s “Success” factor? Let me know in the comments below.