Top 3 reasons new businesses succeed — Clever|Little|Business

It's not all doom and gloom in the small business space. Plenty (in my experience - most) of small business owners succeed.

So what's the difference between a nice idea and a successful business? While entrepreneurial journey is a very individual experience, there are some common traits that successful business owners share.

Below are my three reasons why businesses succeed:

#1 Good planning

You've probably come across many articles, such as this one in Forbes magazine that proclaim the death of a business plan. It's really a 'substance over form' kind of argument.

While the form and, subsequently, the use of a business plan has evolved over the years, the role of planning in business ventures has not diminished.

Your business plan does not have to be a bound 50 page document. In fact, it better not be. However, the business plan has to address a couple of key concepts:

Where is your business at the moment?
Where do you want it to be?
How to get there?
Who is your customer?
Who is you competition?
What are the milestones of your business's development
Key financial projections and indicators

This article on entrepreneur.com , although focusing on external uses for business plans, is one of the best summaries of what to include and not to include in you plan. The key take out from it for the purpose we are talking about :

Do not include anything in your business plan that is not supported by solid proof.

Whenever someone's claim is backed up by "everyone knows this", I wouldn't hesitate to put my money on the fact that the real data will prove it wrong. Do your research and dedicate a particular time each week to planning - the odds for your business will improve dramatically. If you feel like you just don't have time for this - check you my article on time management.

#2 Timing

There is no easy answer when it comes to timing and some of the most important timing decisions will depend on intuition, particularly when you operate at the forefront of any particular industry.

Quite often simple research and cost-benefit analysis will make your timing in business terms much more accurate.

There is an exceptional TED talk by Bill Gross, a serial entrepreneur called "The single reason why start ups succeed" . I highly recommend to listen to the whole talk as Bill makes some excellent and often overlooked points.

As a founder of many start ups, Bill Gross found that the main contributing factor to success is timing.

For example, video sharing has been around for a while and Youtube hasn't always been as big as it is now. However, the development of Youtube has coincided with the rapid increase in availability of broadband internet, which allowed the concept of video sharing to be fully realised.

Bill Gross largely focuses on the importance of timing in relation to external environment. The timing in internal environment is just as important. The importance of timing is better looked at from the perspective of decision making as a whole:

Is it the right time for an idea to become a business?
Is it the right time to focus on growth?
Is it the right time to start changing internal systems?
Is it the right time to outsource?

#3 Commitment and determination.

I haven't seen or heard of a business that didn't encounter problems on its journey to success. Even the so called "unicorn start ups" have often been on the brink of closure before their billion dollar valuations.

In fact, the whole process of running a business is mostly about solving problems, both yours and your customers'.

The question is: Are you going to stay put, face the problem and grind it through until you find a solution, or are you going to try and avoid dealing with it. The answer to this question is also the answer to another one - is your business going to succeed or not.

It seems to be common sense and most new business owners will tell me that they are aware of the hard work and the grind that will be required. However, when push comes to shove, lack of determinations and problem avoidance are some of the main reasons as to why businesses stall, or even fail all together.

It is a lot easier to be passionate about making a great product or delivering a great service to you customer. It is a lot harder to find the same passion to deal with bureaucracy to make your product available to the market. Or to curb your growth plans and stay within budget.

The best way to make sure that your commitment and determination don't wain when your business needs them most is to create a mechanism of holding yourself accountable.

When you are your own boss, holding yourself accountable can be your biggest challenge.

A good start is to communicate your immediate plans and goals to your support network and keep written records of that. You'd be surprised what a difference it makes when you know you that the people you trust expect you to follow through with certain things. As long as you keep your goals realistic, you also won't be faced with excessive pressure when working on your goals. Just enough pressure to push you through if you feel stuck.

Check out my article on what are the most common reasons I see for businesses to fail as well.