Three Ways To Make Your Business More Successful According to science, these philosophies separate successful businesses from the failures and the mediocre ones
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A number of factors go into making a successful business, from the inception of the idea all the way to make it actually happen. While success cannot be guaranteed when you start up a new business, there are some scientifically proven strategies a business owner can employ to give his or her business a better shot. Here's a helpful list.
1. Don't Rest On Your Laurels
Reaching the top and staying there are two entirely different things, explains a study published in the Journal of Marketing in May 2018. Researchers at the Faculty of Management, Economics and Social Sciences of the University of Cologne examined the relationship between market share and financial profitability using 89 published studies from six different continents published between 1972 and 2017.
They determined that a 1 per cent rise in the market share of a company only corresponds to an average increase in financial performance of 0.13 per cent. This suggests that cornering the market is not all you need to do to ensure the success of your business, with other metrics such as customer satisfaction and brand equity proving to have much more of an impact.
"Many CEOs still consider market share to be the most important indicator of business success," said lead researcher Dr Alexander Edeling in an official release. "But in today's digital market, small companies can often produce cost-effectively and sell to a global audience. That allows them to compete with the industry's leading companies."
2. Don't Give Up
A never-say-die attitude could be one of your biggest strengths, suggests a 2014 study conducted by Stanford Graduate School of Business Professor Kathryn Shaw and Francine Lafontaine of the University of Michigan. They examined the successes and failures of 2.8 million small retailers in Texas over a period of 22 years.
"If you are an entrepreneur, you want to continue to gain experience as an entrepreneur," Shaw said in a press release. "It's really a long-term commitment. Learning from that experience can shape your future." In a time when 2.5 million retail businesses opened and 2.2 million closed, they found that entrepreneurs were more likely to succeed the more times they had run businesses in the past, which suggests entrepreneurship is more of a learned skill than something you're born with.
3. Don't Follow Convention
Many entrepreneurs might follow the example of successful businesses established before theirs in order to be successful themselves. However, a November 2015 report by Xero, providers of cloud-based accounting software, reveals that the key factors that make a successful company aren't those you might expect. They surveyed 2,000 business owners in the U.S. and the U.K. and came to some surprising conclusions.
Their research debunked the myth that successful entrepreneurs can't work for someone else, revealing that 58 per cent successful entrepreneurs had held a corporate job in the past. Another myth which was put to rest was that you need to work 24x7 to be successful, as 55 per cent successful entrepreneurs played up the importance of keeping weekends free for their loved ones. 28 per cent even said it's vital to turn off digital devices after hours.
Over 33 per cent successful entrepreneurs said they relied on a support group or turned to a mentor for business advice, compared to just 14 per cent of those whose businesses flopped. This shatters the myth that successful entrepreneurs are all self-made and do everything on their own. The bottom line? Find a proper work-life balance, be open to receiving advice and target clients who can be a steady source of revenue for you.
"To build a successful business, which is sustainable in the long term, you need to ensure the other areas of your life don't get neglected. Running a business isn't easy, by taking time out to spend with your family or friends you often find you return to work energized with a clear perspective on what you need to achieve," said Xero U.S. President Russ Fujioka. "Small business owners should be aiming to achieve work/life integration, not work/life balance. By doing this you give yourself more flexibility and set yourself up better for success."