Many studies and researchers have identified certain qualities and characteristics that distinguish highly successful businesses from mediocre ones.
The remarkable aspect is that by adopting these qualities, any business has the potential to achieve success comparable to those that have already succeeded.
These are 18 must-have characteristics of a successful business.
On this page
Quality of product/service:
Above all, one thing that makes or breaks a business is its product or service. Decades of research suggest that what will differentiate businesses that thrive long-term is the focus they place on the quality of their products. Many researchers found that successful businesses have great products and continuously work to improve them. They have a solid value proposition and keep refining it to stay competitive in the market.
So, if you want to make your business successful, your top priority should be to focus on your product.
It took me 10 years to get this: You can take two years to build something exceptional, then let your customers market it forever. Or, you can take two months to make a mediocre product and spend the rest of your life trying to sell it. Your product is the best marketing.
Alex Hormozi
In a nutshell, as Harvard Business Review research once suggested, the quality of your product is even more crucial than the product itself.
Financial Preparedness:
Along with a great product, the next big thing that matters is how well you are financially prepared. You need money to prepare the product, market your product, see ups and downs, and many times be patient for a few months. You can’t go through the process if you don’t have enough finances.
In our research, we found that it’s the top reason new businesses fail. So, even if you have a great product, you can’t win without enough finances.
We also found that normally many new businesses face challenges within their first year because they didn’t expect some costs or did not have enough savings. CB Insights conducted research and found that 38% of startups fail due to lack of funds.
That’s why to make your business successful, business owners should watch over their cash flows and aim to break even. For well-established, successful companies, this becomes less of an issue.
Being ready in terms of finances implies having another option. For example, having access to a business cash advance can help you cover unexpected costs or invest more in growing your business. Financial readiness ensures that your firm can handle any challenges and grow further.
Clear Visionary Approach:
If we look at the statistics, vision is one of the top reasons most startups fail. Without a clear vision, it’s like navigating a labyrinth without any preparation. Having a clear vision sounds easy, but in most cases, it’s not.
By having a clear vision, you know each and every detail of your business. For instance, start with “why.”
Why do you want to start or run this business? Why does your business exist? Is there something that differentiates you from others, or is this just another business?
For example, if you are starting a cleaning business, is this just another laundry business because it’s profitable, or is there something else that motivates you?
Even if you don’t have a clear vision and your sole purpose is money, there’s nothing wrong with starting that business. But what I tell people is that in that case, you should start one with the most money potential. So that you could enjoy pushing that business.
Next, the big question is, where do you see yourself in the following years?
Then, you should ask, how prepared are you to reach those goals?
In this way, you can understand your business very well.
You cannot succeed in making a business you do not understand the concept of.
Strategic Business Planning:
Apart from knowing what you want your business to achieve, it is essential to have an outline of the activities you will undertake to ensure that your company succeeds.
Ken Colwell, the author of the book ‘Starting a Business QuickStart Guide,’ emphasizes the importance of writing a business plan. Writing a business plan is like reviewing everything at once; marketing assumptions, operations plan, financial plan, and staffing plan, which allows you to make connections that would not have been discovered otherwise.
In your business plan, identify what you aim to achieve in the upcoming year to get on track for achieving your long-term goals for your firm.
Proactive Short-Term Goal Setting:
Besides having a business plan for long-term goals, the most thriving businesses are the ones that have measurable short-term goals. We often call them SMART goals.
These are specifically what the company needs to achieve during the next quarter, month, and week to make a much better year. In your SMART goals, you decide everything and try to make sure that your expectations are very close to ground realities.
Goal setting is not a one-off process when you are developing your business plan but rather an ongoing process. Setting goals should never be all about how many sales dollars you want to generate alone. It may be about your service offerings, business growth, or anything else that means the development of your enterprise.
Motivated and Unified Team:
Your employees can make or break your business. If you don’t have the right team, you probably won’t last long. There could be many reasons.
For instance, one study conducted by Fundera found that 23% of small businesses fail due to a lack of the right talent.
Another research study conducted by the Better Business Bureau found that 30% of businesses fail due to employee theft.
So, it’s a no-brainer that every successful business has loyal and motivated employees.
If you have started your business but not getting results, you should spend time knowing your team. You should analyze whether your team is motivated and happy with what they do.
The company’s performance depends on the skills and motivation of its team members. Although every company may have a few disgruntled workers, you will have a low turnover rate if your company is to be successful.
Your employees should feel happy and even eager to get to work every day and face the challenges ahead of them. These people can make open suggestions or share ideas since they feel like they have value in the business. They can also give constructive criticism without fear of retaliation from anyone. Be focused on hiring the right team members and doing everything possible for them to stay on your team.
Continuous Skill Development:
To succeed in business, you must learn how to improve your skills. Just as you set goals for your business, so too should you aspire to be better at what you do. This implies more study and practice to become very good at it.
When a business is going through tough times, all its staff should have clear roles. A great idea could be to spend time and money educating your team on some things that they don’t know yet. And that’s very important for your business. For instance, you can think of improving customer service. You can arrange a one-day training session for them.
Imagine it like a sports squad where every player has to engage in training sessions so that they can give their best.
Improving your skills is also important for business growth.
Your employees’ skill set and growth have a direct relation. As businesses change and grow, so should your abilities. This is why you must continue training your team regularly. You must ensure that this training forms part of your business plan so that it is always done.
Occasionally, take stock of how well the team is performing. If there are areas where the performance of the team is not up to standard, these issues ought to be addressed. It may require altering the way teaching is done or doing things differently to enhance them.
Excellence in Marketing Strategies:
Marketing usually brings more success than anything else, so make sure that your business has an effective marketing system. Of course, if you offer good products or services, customer referrals can help you build a sustainable relationship with them but frequently, entrepreneurs wish or need their ventures to expand faster.
The key element of your marketing strategy is utilizing several channels of marketing. For instance, pay-per-click ads, newsletters, and social media can attract more customers collectively than any one of them alone could.
Customer-Centric Focus:
One of the best characteristics that any successful business can have is knowing its customers and offering them what they want. All successful companies learn how to attend to their customer’s needs, whether they sell directly to consumers or other businesses.
Your marketing tactics will be more productive if you have a better understanding of your customers and their desires. You can gain a lot from talking to your customers.
For instance, if you have a huge loyal customers list, you should ask them why they buy from you and what changes they would like to see in the future.
In this way, they would be able to give you an idea of what is important to them, which could go a long way in ensuring that your product or service can make your business a success and build up a loyal clientele base.
Here, I want to add something for CEOs and decision-makers: Asking your customers doesn’t mean you should apply everything they want. Different customers have different needs, so you should spend time understanding the data to make very sensible decisions.
Embracing Change as Imperative:
Your business has to be prepared for this if you want it to succeed. If something in your business isn’t working, be ready to change it and try something else.
The business world is uncertain; hence, you need to be flexible and make changes that may suit your goals. Updating your strategic plans and making changes helps you remain consistent with your vision while staying competitive.
Persistent Pursuit of Success:
Certainly, the life of a business owner would never be simple, especially in the beginning. There will always be more work that can be done and there will also be significant ups and downs along the way.
However, one should never give up, no matter how bad things get with their business. Your ability to stick to your business plan can enable you to achieve these objectives, thereby making it prosperous.
Passionate Commitment:
Another characteristic that really makes a difference is ‘passion’. How passionate are you about your business? As I said earlier, are you working for money, or do you have a vision that can push you forward no matter what?
If you look at entrepreneurs, you will realize that to achieve good results in business, one has to be passionate enough to go through every tough and hard situation.
Show belief in it and what it entails. Entrepreneurs who are passionate about their businesses work harder and give their best shots.
If you are doing something that excites you, this not only makes you work harder but also helps in the company’s progress, as clients can feel that you are dedicated to your product or service. Passion is likened to the fuel that propels your enterprise forward.
Leadership and Communication:
Leaders play a huge role in business success. They either make or break the business because they are trendsetters. If they are not motivated or don’t care much about culture, this will flow down to the other employees. Thus, they should be able to get their groups motivated toward a united purpose.
Successful entrepreneurs serve as an example of honesty, commitment, and work ethic. They also understand how to communicate clearly by sharing their vision, core values, and desired results with stakeholders, including employees or even customers.
According to Gary Brooks, CMO at Syncron,
“Leadership and culture aren’t about being the boss or being in control; they are about creating shared visions and goals, and then inspiring, empowering, and influencing others to achieve more than they ever thought possible.”
This sums up the essence of effective leadership.
Great leaders cultivate an environment where communication is open, ideas are welcome, feedback is embraced, and teamwork is fostered.
Similarly, they understand how one can form strong bonds. Good communication skills allow them to build trust and improve the customer experience with their clients.
Creativity and Innovation:
While discussing the qualities of successful businesses, we can’t overlook the environment of creativity and innovation. Employees find better, more effective ways to work when businesses create a space where people can think outside the box and generate new ideas.
Innovation enhances business performance because the product of innovation increases firm competitiveness and the process of innovation transforms internal capabilities making it more adaptive to change.
Innovation and Business Performance
Many times, this leads to great innovations. That helps reduce costs, save time, and make the workplace more efficient.
Especially, the advent of technology has made it even more necessary for businesses to be innovative as environments continually change due to the ever-growing digital age.
Decisiveness:
In business, being decisive and full of confidence is very important since it will help you in decision-making, team leadership, and achieving success.
Decisiveness refers to the ability to make quick and effective choices, which are critical in this high-speed modern business world. It keeps things moving and stops the company from getting stuck.
For example, companies need to move quickly in response to fast-changing markets. Quick decisions mean that leaders can adjust tactics on the go.
Satya Nadella, CEO of Microsoft, says in his book “Hit Refresh” about leadership tactics that in times of rapid change, it is the ability to make quick decisions that distinguish successful leaders from the rest. It may be what separates winning from losing.
On top of that, decisiveness also enhances efficiency and productivity within a firm. Swift choices prevent holdups, letting teams get on with their work.
According to a study by Harvard Business Review, companies with decisive leadership are 12 times more likely to be high-performing than those with less decisive ones.
Curiosity and willingness to experiment:
If you look at successful business leaders, you will realize that they are curious and always looking for new and better ways to do things.
Francesca Gino, an expert on the psychology of organizations, says that curiosity is the key to success. It helps leaders and employees deal with uncertainty and pressure.
When we are curious, we think more deeply and rationally about decisions and come up with more creative solutions, Gino explained.
Curiosity also encourages employees to form better collaborative relationships and develop trust in their partners. And both are very important pillars of business success.
Good leaders ask lots of questions. They wonder why a customer might be unhappy, how a product could improve, or how an employee can grow. Then, they listen well and ask more questions to understand deeply. They value exploring new ideas and accepting failure because that’s how innovation and experimentation work. This approach encourages the team to try new things without fear. – Vanessa Nornberg, Metal Mafia
Risk management:
Another thing that differentiates successful businesses from those that fail or at least don’t grow is risk management. Taking risks leads to innovation and growth but it’s not as easy as it sounds to it to be. You can’t jump on anything blidly. You need to be parepared and that’s called risk management.
Entrepreneurial leaders need to know how to handle risks and be ready to use them for growth whenever they can.
We usually think of managing risks as fixing problems. But it’s also about finding and focusing on the big risks that can help reach long-term goals.
Professor Ericka Kranitz explains that managing risks helps companies stay ahead and take advantage of the best opportunities.
From famous leaders like Welch and Page to Musk and Bezos, every successful business leader has taken smart risks that have helped them succeed.
Empathy:
Empathy development is a subject that isn’t given much attention in business, but I believe it should be. Empathy is about understanding others—it’s about putting yourself in their shoes and grasping their thoughts and feelings.
But this is more than just emotions; it’s action. We may not have identical experiences or feelings as the other person; however, attempting to comprehend others’ thoughts, needs, and wishes by momentarily putting aside our prejudices is the objective.
In the workplace, empathy can show up in different ways. It’s sometimes overlooked because work often focuses on numbers and facts, not emotions.
However, improving empathy through communication skills has also been an important thing in successful businesses.
Partnership and networking:
To be successful in business, you must establish strong partnerships and networks. If companies team up strategically, they can leverage each other’s strengths, enter new markets, and ignite innovation.
For instance, Apple and Nike collaborated to develop the Nike+iPod Sports Kit, which combines fitness tracking with music playback, to increase their market foothold.
Similarly, every successful business is always looking for partnership opportunities to expand and grow and that makes them stay ahead in their industries.
“Networking is an investment in your business. It takes time and when done correctly, it can yield great results for years to come.”
Diane Helbig
In a nutshell, achieving success and staying ahead in the market isn’t easy. It requires significant effort and the adoption of certain qualities that are often overlooked by many businesses that fail to reach that level. We have discussed some characteristics that you cannot overlook if you want to be successful and a top leader in your industry.