What’s the Formula for Small Business Success?

What does it take to build a successful small business?  Maybe less than you expect.

As a CPA, I’ve been working with small business owners for a long time.  My staff and I are privy to the financial results of nearly 200 businesses every year – some are very, very successful, and some are not.

One of the most common questions we’re asked is “What makes a business successful?”

I think most people expect us to reply with an insightful theory about business models, or an obscure financial ratio.  I wish it was that easy…

Successful businesses are those with people who repeatedly attract good customers and good employees.  That concept is easy to understand, but difficult to execute on.  Outstanding people make a business successful.  I’ve never seen a successful business that didn’t have people who cared about the business and were willing to do whatever it takes to make it work.  Businesses don’t grow, people grow.

Consider the two lists below.  In my experience, the items in the first list are almost always present in successful businesses, and the items in the second list are often not present:

Present in Successful Businesses:

  1. Passion for the business
  2. Dedicated people
  3. Working long hours and LOTS of hard work
  4. A culture of learning
  5. An attitude of “Let’s work this out together”
  6. A servant’s mentality – “How can we be of service to you?”
  7. Teamwork and accountability
  8. An owner spending time and resources on managing the business

Not Always Present in Successful Businesses:

  1. Brilliantly talented business owner
  2. Impressive university degrees and honors
  3. Bullet-proof business plan
  4. Rock-solid business model
  5. Plentiful financial capital
  6. Lots of connections in high places
  7. An owner with charisma and dashing good looks
  8. Impressive offices and leading edge technology

Obviously, there’s nothing wrong with having the items in the second list – the more of these present, the better.  But make no mistake – if I were starting out in business and could only choose five items from the two lists, I would probably choose all ten from the first list.  Those are the items that are most likely to ensure my success.

Very few of us will look at the first list and feel that we’ve mastered them all.  Fortunately, I’ve found that businesses often start out with only a few of the attributes on the first list, and they add the others over time.

What items from the first list need improvement in your business?