Did you know that around 20% of new businesses fail during the first two years of their existence? Approximately 45% fail during their first five years, and 65% during the first ten years. Only 25% of new businesses make it to 15 years or more. So, how do you build a business that avoids that initial 20%? And how do you ensure that you successfully make it to that ultimate 15 years? While we can’t give you the magic recipe to longevity and success in business, we can share some of the top rules for building a successful one, backed by some of the most successful entrepreneurs out there.
Rule #1: Have a plan
Having a concrete plan, a detailed roadmap is the first and best way to set your business up for success. Without having a solid plan in place, how will you know what to work towards, what action needs to be taken, and what to do when things don’t go according to plan?
The first step to creating this plan is to develop a watertight business plan, marketing strategy, mission statement, vision, and goals. Then, pulling together all your strategies, tactics, operational plans, and financials into one place will give you a clear picture of what to do next to make your business a success.
Your plan should include clear goals as to where you want the business to be in the next three months, six months and so on. It should also include how you plan on reaching these goals and what steps need to be taken to be successful in relation to your goals. These steps should be your priority.
Successful entrepreneur and business coach Brian Tracy says, “If what you are doing is not moving you towards your goals, then it’s moving you away from your goals.”
Rule #2: Measure everything
The best way to implement any plan is to measure its success as you go. How will you know if your strategy and tactics are aligned and working unless you measure them? How will you know how close you are to your goals if you don’t keep track of performance? If you do not measure everything, you won’t get very far.
Use metrics to understand how your business is performing. Take time to determine what metrics matter to you and how you plan on measuring them and how often you’ll check in on these metrics. This should form part of the plan mentioned above.
Successful business owner and CEO H. James Harrington says, “Measurement is the first step that leads to control and eventually to improvement.”
Rule #3: Serve your target market at every turn
Business owners are often tempted to try and sell to everyone. Obviously, you want as many people as possible to buy into your services or your product. But by trying to appeal to everyone, you may not appeal to anyone. Instead, by selecting a specific target audience and tailoring your offering to their interests, needs, and pain points, you’re far more likely to grow a successful business.
“Everyone is not your customer,” says former business executive Seth Godin.
Once you’ve clearly defined your target audience and how you can meet their needs, it’s important to aim to serve this group of consumers at every turn. From your marketing, package design, and even your communications strategy – aim to cater to your target market at every turn and with every decision you make.
Rule #4: Create an outstanding USP
If you’ve got a great idea and you’ve carefully selected a target market, you now need to figure out what really differentiates your business from the rest. It may sound simple, but these days it’s hard to compete with the thousands of advertising messages people are bombarded with every day.
How you stand out is by having a clear and powerful unique selling proposition (USP). Your USP is a few words that quickly and succinctly communicate why your ideal customer should do business with you and not a competitor.
Businesswoman Rebecca Mark says, “If you don’t distinguish yourself from the crowd, you’ll just be the crowd.”
Rule #5: Always exceed customer expectations
Another important rule for building a successful business is to commit to exceeding your customer or clients’ expectations. Through excellent customer service and going the extra mile whenever you can, you can create a steady flow of returning customers who become word-of-mouth advocates for your business.
“My metric for success can be summed up in one phrase: earn customers for life,” says Mary Barra, Chair and CEO of General Motors.
Rule #6: Plan for the worst, hope for the best
In the business world, mistakes and failures are bound to happen. For this reason, it’s important that you build up your resources for when these things take place. Set a portion of your budget aside for the unforeseen and have a strong crisis plan in place so that you can bounce back quickly using considered tactics.
While we’re not saying you should focus on what could go wrong, it’s important to have a backup plan so that you can confidently focus on what could go right.
In their book, Mission in a Bottle, Seth Goldman and Barry Nalebuff write, “Build up reserves of money and energy for bad luck and mistakes.”
No many how many books you read, courses you take, and podcasts you listen to, there is no one definite rule for building a successful business. Rather, what does lead to success is building your business on solid foundations. One way to do this is to consider the rules above when laying the foundations for your business. As American businessman and investor Henry Kravis says, “If you build that foundation, both the moral and the ethical foundation, as well as the business foundation, and the experience foundation, then the building won’t crumble.”