Geoff Steer and the team at Matthews Steer Chartered Accountants have come up with seven traits, or "success factors", that in their experience are shared by all the best businesses.
After more than 20 years working with small business there is no doubt the best businesses have much in common, regardless of industry or sector.
The Matthews Steer team recently sat down and tried to isolate those universal traits behind the best businesses, which we like to call “success factors”. After much debate we narrowed it down to the list below.
But putting theory into practice is a major challenge for businesses: no single success factor is a golden ticket to success, because none in isolation can support a business on its own – especially if that business is negligent in considering the other success factors.
We constructed this list to be viewed as a whole, based on our observation that successful business results from employing all of these factors together – provided each is done to a high level.
Here are our “magnificent seven”:
One – Value proposition: Do customers really understand what you do? What is it that gives direction and purpose to your business activities?
Two – Marketing: A strong brand and reputation are invaluable. Marketing has potentially big payoffs for businesses that do it well.
Three – Strategic planning: Because working “on” your business, not just “in” it, is vital. Includes a “vision for growth” and establishing accountable targets.
Four – People: People add to your culture and can make or break a business.
Five – Know your numbers: Understanding how your business makes money, and all the important timing issues regarding cashflow may seem obvious but some businesses do this better than others.
Six – Policies, processes and procedures: Can you objectively test your thinking or examine the success of your business? Due diligence, establishing boards, testing and review are all issues here.
Seven – Plan to convert business success to personal wealth: A lot of hard work and personal financial risk is required to create a successful business, and you need a plan to get a return.
Think of these factors as a self-supporting structure requiring all components to be in harmony: if just one of these factors is amiss then the structure will either be misshapen and dysfunctional, or come crashing down altogether.
For example, a strong value proposition, marketing program, strategic plan, staff culture and grasp of numbers may be turbo-charging your business but it can all come spectacularly undone without the right policies, process and procedures in place.
Likewise, all of the product differentiation and marketing in the world cannot save you from a poor people culture.
The great thing is that when these factors are lined up magical things can happen, and there are many successful businesses that are testament to getting these basics right.
Geoff Steer is a Founding Partner of Matthews Steer Chartered Accountants. Geoff’s knowledge of taxation matters combined with his financial planning skills enable him to provide a complete financial service for professional, executive and small business clients. Geoff was recently ranked one of Australia’s top 10 financial advisors by the AFR Smart Investor Magazine’s 2011 Masterclass. www.matthewssteer.com.au