Entrepreneurs at most times define a successful business by considering businesses that make profits only.

The factors that make a business successful are however not solely dependent on the profit-making aspect but on other aspects, such as the level of customer satisfaction, and having an understanding of the market dynamics.

Other factors are having a business with effective processes, a strong management team, one with the potential to grow, a business with a clear strategy and businesses that have a focus on creating a long-lasting impression to its customer.

The factors that define successful businesses are:

Business with a clear business strategy. A business with a clear strategy is considered successful since a clear strategy defines the goals, values, and the business culture giving the business a sense of direction.

Businesses with a clear strategy have a clear set-out vision for the business, mission, and values, ensure efficient allocation of resources, and are sustainable.

A clear business strategy ensures all the relevant stakeholders work towards achieving the specific goals set out for the business.

Strong leadership or management capabilities. Successful businesses are those with an effective team of managers.

Managers possessing qualities such as integrity, accountability, effective decision-making, effective communication, innovation, and forward-thinking motivate the employees to work towards the business goals.

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Businesses with effective managers more often than not perform better and are successful as compared to those led by incompetent managers.

Processes. Businesses that are considered successful are those with effective and efficient processes and systems in place.

Effective processes ensure that employees run the business smoothly, reduce costs, and ensure quality in production and motivation to work thus increasing productivity.

Business with a focus on the customer rather than the product. Most entrepreneurs are product-centred and start businesses to sell the available products to the customers.

However, Businesses that focus on the customers tend to be more successful than those that are product-centred.

This is because customer-centered businesses will incorporate the customers’ needs into the product and deliver according to demand needs.

The creation of a product according to the needs of the customers boosts the business-customer relationship and ensures customer retention, and positive feedback that translates to more sales and sustained business growth.

Understanding of the market dynamics. Businesses that are considered successful are those with an understanding of the market.

Businesses that invest in market research tend to be successful since they identify the market needs, the competitive advantage, and the customers’ preferences which tend to change from time to time.

Businesses that tend to change their strategies to fit the customers’ preferences tend to be successful since they gain a competitive advantage in the market.

Innovation. Businesses that foster innovation and encourage innovation among their employees tend to be successful.

Innovation may involve the creation of new products, a new line of business, adopting technology, and improving processes.

Innovation ensures the business is ahead of other businesses and has a competitive advantage.

Scalability. Successful businesses have the potential to grow without negatively impacting the business e.g. through increasing costs.

Businesses that consider growth should therefore put in place systems that may allow for expansion and can accommodate growth.

Businesses that invest in the technological aspects of the business and plan strategically on the growth of the business tend to grow and ensure quality in production leading to the business’s success.

Financial planning and management. Businesses that plan for their finances and have effective tools in place for the management of cash are successful.

Cash flow management, budgeting, forecasting, and determining the company’s profitability are all part of financial management.

Aspects of financial planning and management guarantee that businesses are forward-thinking, that no shocks arise, that capital is available for growth, and that business stability is maintained.

Brand Visibility. Businesses that invest in marketing and branding ensure brand growth thus increasing sales and their brand reputation.

A business with a strong brand benefits from having a loyal customer base as compared to its competitors, and communicates the business strategy and value proposition.

Ms. Whitney Khaluyi is a Business Analyst at WYLDE International. You may connect with Whitney via email: [email protected]