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Success, they say, is "where preparation and opportunity meet."
But how do you define and measure success in your business? How do you know
if your business is a success? Can you tell if you are on or off course? If
you are off course, what corrective action(s) can be taken?
An important part of planning your business entails knowing the key
things that can tell you when you have reached your goals. Called key
success factors, these are indicators or milestones that measure your
business achievements and help determine how well you are progressing
towards your goals and objectives.
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Without determining your key success factors, you run the risk of needing
to make expensive changes of direction later on as you have not aligned your
objectives to the success of your business. You must sit down and think what
you really need to do to make your dream business a success.
The process of setting up your key success factors need not be tedious or
difficult. Simply ask the question: "What are the key things that, if
you do them well, will ensure your success as a business?" Then fill in
the blanks of
 the sentence: "If I ______________________, then I will
be successful."
Your business plan must contain a list of key success factors for your
business. Jan B. King, in her book "Business Plans to Game Plans: A
Practical System for Turning Strategies into Actions" offers a number
of key success factors applicable for any start-up small businesses. Below
are some of them:
1. Sell each unit at a profit.
Evaluate each and every product that you
sell and determine if you are selling them profitably. If not, you may need
to identify how to make its current sales profitable, whether by reducing
your costs for that product or increasing its price.
2. Continue to reduce overhead costs.
A lower overhead should be a
continuing objective for your business. You can cut costs by evaluating your
insurance needs, reducing your reliance on outside consultants and service
providers, or cutting down unnecessary supplies and equipment.
3. Develop new products while maintaining the high quality of existing
products.
Ensure that your products are created or chosen in response to the
needs of your customers. Ask for customer feedback through surveys or direct
interaction with them to find out what are the items that they need and
expect from your business.
4. Find and retain high-value customers.
The 80-20 rule of business
states that 80 percent of your business will come from 20 percent of your
customers. It is therefore critical that you exert the extra effort to
ensure that you retain the business of your top customers.
5. Create and maintain the highest level of customer satisfaction.
A very
important success factor needed to sustain your business is to provide the
best service to your customers. Satisfied customers are more likely to come
back to you. Better yet, give your customers more than they expect.
The above are but a few of the key success factors that you can use for
your business. Your key success factors must encompass all the important
areas of your business, from finance, marketing and product development,
sales and customer service, and human resources.
As a small and home
business owner, understanding what you must do to make your business a
success is the first step to your path to entrepreneurial success.
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