This article was originally created for Hayes Knight (now Nexia Auckland).
Home > Updates > The five key factors for success
With clients ranging from small sole traders to multi-million dollar businesses across international markets and covering numerous industries we are well placed to observe and share our views on the current economic landscape. It can be a lonely place our there for many businesses, head down working hard over the past few years, but not really sure how your business is measuring up.
To answer the question, in a word, “patchy”. While we are seeing a number of businesses continue to grow strongly, reporting record profits this year, we also see a fair number who have experienced pain over the past few years, continuing to do so, with zero or negative growth and falling profits.
So what is differentiating those businesses that are continuing to grow and thrive in the current marketplace from those that are just “getting by”? From my observations I have identified the following five key factors shared by those businesses currently performing well:
While innovation is a well-worn word these days a number of those businesses “just getting by” are businesses, often in traditional industries, that have not made significant changes to the way they operate over the past few years. Not so long ago these businesses provided a reasonable return to their owners on the back of long standing relationships, brand and customer loyalty.
However many consumers now want fresh products and services delivered and offered in new ways. Loyalty is less common and switching to your competitor is easy and less costly. Businesses who are continually reviewing what they sell to their customers, improving and updating their products, services and how customers can buy from them are faring better than those who don’t.
Successful businesses don’t stand still and never stop looking at ways to improve their range of product or services and the style and quality or their customer experience.
Find out what your customer wants then deliver it. Sounds simple yet so many businesses fail on this promise either because they don’t fully appreciate or understand what their customers want or they fail in their product or service delivery.
Social media and the likes of Facebook have provided new ways to communicate with customers and conduct market research. A client had spent significant money on traditional marketing with little return for the release of a range of new products. Following this they starting uploading products on their Facebook site to gauge interest, within hours and no investment they knew when had a winning product based on feedback via social media.
If your product or service is targeted at certain demographic e.g. Generation Y then look to hire younger team members who will better your target market’s buying habits and trends. Understand how your customer buys from you and why they buy from you. Businesses that are continually communicating with their customers are better placed to answer these questions.
Without doubt technology has had the biggest impact on business and there is no sign that things will slow down on this front. The most successful businesses have identified technology early in their company lives and integrated technology into the core of major business functions. Ask the question how we could use technology to do this better, faster, cheaper.
Carefully planned use of technology can significantly reduce costs and fundamentally change traditional business models. I have seen this used very effectively in the areas of inventory management, reporting and integration with company websites. A fast growing client with significant number of inventory lines identified early on the need to automate a number of manual inventory processes. This led to closer monitoring of their major asset, reduction in wage cost, elimination of human error and accurate timely reports.
KPI’s or Key Performance Indicators have been around for years now but I am still amazed at the number of businesses they don’t use them. In the current environment KPI’s are just relevant and important as ever. You don’t need to produce a 20 page report every month, with often a simple one pager of those indicators that matter most to your business measured on a monthly basis. Use graphs, colours and symbols if this helps convey your results and message to your team. Most successful businesses we currently encounter use KPI’s in one form or another.
Finally passion and energy are two critical ingredients we see in successful businesses. This passion and energy is evident from the owner right through the entire organisation. You can often quickly identify this from your first contact with a business by the way that business interacts, communicates and sells to you. Be passionate about your product, brand or service offering.
If you want to find out how to make your business grow and thrive and ensure you’re not “just getting by” contact your Hayes Knight adviser or Brendon Cutler:
T: +64 9 448 3236
M: +64 21 441 654