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 succeeded. 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. Another aspect that you need to plan out is your business contract management. Your organization, no matter how small you start, will be dealing with a massive amount of contract data. It is crucial to your company’s success that all of the KPIs are met and the terms complied with. Take note that a huge success indicator, especially for a startup, are successful contracts with positive results.
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 about 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. After all, your business won’t expand without gaining profit for every sold unit.
Read the following articles:
- How to Run Your Home Business Lean – and Profitable
- Five Routes to Greater Profitability
- How to Increase Profit: 4 Simple Steps
- 5 Ways to Increase Your Revenues
- When Cutting Prices: Are You Giving Away Your Profit?
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.
Cutting down your overhead costs can help your business minimize losses and boost profitability, but do take note that necessary overhead expenses shouldn’t be eliminated. The non-negotiable expenses that you should never remove from your list include utilities, rent, insurance, vital supplies and equipment, and salary costs.
Read the following articles:
- How to Run Your Home Business Lean – and Profitable
- Creative Ways to Cut Monthly Business Costs
- How can Shipping Costs Affect Your Business?
- Do’s and Don’ts in Cutting Down Overhead and Business Costs
- Top Tips to Reduce Office Related Running Costs
3. Broadening your business’s reach to online platforms.Â
In this era of digitization, only a foolish entrepreneur would remain with traditional forms of advertising alone. Sure, you can still maintain conventional marketing materials like posters and billboards, but the online landscape is the best avenue today. Thus, make good use of it by introducing your business without boundaries.
The first step is creating your business’s website, which will establish your company’s credibility within your industry. Also, having your own website helps potential customers and investors know more about the business without having to contact you immediately.
Although designing your website for the first time can be challenging, this will guide you how to create a website for a small business. Take note that this is only a guide, so feel free to emanate your business’s identity on your website.
4. Develop new products while maintaining the high quality of existing products.
Whether your products are flourishing or struggling, you should always aim for continuous, progressive product development. Developing your products delivers an important message to your customers: you want to give them the best value for their money.
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.
Read the following articles:
- Where to Find New Product Ideas
- When to Launch a New Product
- How to Test Your Products
- First Question to Ask When Launching a New Product
- How Great is Your Product?
5. 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.
Read the following articles:
- How to Keep and Retain Clients
- How to Foster Loyalty and Get Repeat Customers for Your Online Business
- 6 Ways to Increase Your Customers
- How to Nurture Loyalty in Your Clients
- How to Get Loyal and Repeat Customers
6. 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.
Read the following articles:
- Excellent Customer Service: A Must for Small Businesses
- Customer Service: How to Knock the Socks Off Your Customers
- How Your Small Business Can Become the Leader of the Pack
- How to Provide Good Customer Service
- Is Your Home Business Delivering Quality Customer Service?
Wrap Up
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.
Recommended Books on Key Success Factors for Business:
- The 100 Absolutely Unbreakable Laws of Business Success
- The Outsiders: Eight Unconventional CEOs and Their Radically Rational Blueprint for Success
- School for Startups: The Breakthrough Course for Guaranteeing Small Business Success in 90 Days or Less
- The 12 Factors of Business Success: Discover, Develop and Leverage Your Strengths
- Shark Tales: How I Turned $1,000 into a Billion Dollar Business
 Article originally published on March 31, 2013. Updated on January 10, 2020
