Indications that your small business is built to last are a bit more complicated than a healthy balance sheet, says Donna Novitsky, CEO of employee rewards company Yiftee and a professor of marketing and entrepreneurship at Stanford University. “There are a lot of factors that go into building a successful company besides growing the top line,” she says.
True, every small-business owner has his or her own barometers of success, but thriving enterprises have a few common denominators.
1. Positive Workforce Climate
Thriving companies have employees who enjoy going to work each day. And those employees feel as if they are making an impact with their contributions to the company, says Novitsky. “If you want to know if your employees are satisfied, ask questions such as ‘Is the development team innovating in creative ways to differentiate our products?’, ‘Does the marketing team love finding the sweet spot in messaging to connect with prospective customers?’ and ‘Is the customer service team building great relationships with customers so that they become true advocates?’”
The bottom line is that your team must believe in the mission and goals of your company, says Novitsky. “An employee who gets discouraged and loses faith has to go.”
A healthy company has optimal team play, agrees Frances Moreno, managing partner of Vaco Los Angeles. (Her company was recently named the “#1 Best Place to Work in Los Angeles” small employer category, for the fourth time.) “Five signs of great team play include commitment, trust, resolving conflicts quickly, results and accountability. This goes for everyone in the business.”
2. Clearly Defined Market
Early on, it’s not about sales and profitability at all, says Novitsky. “The first stage of success is about proving a product-market fit. From the very beginning, you must define a market need and a solution that has clear benefits to customers and is a big enough opportunity to be worth your dedication for several years,” she says. “Then you have to build the solution and cultivate relationships with your initial customers.” This is a process successful companies repeat as needed in order to grow.
3. Adherence to Values and Objectives
Thriving companies have a transparent set of objectives and values to which they adhere at all times. A clear set of company goals allows everyone to understand the purpose of the company and their roles within the company, which results in a healthy business.
“Successful companies have a purpose and a future plan and make sure the company is unified in moving towards a common goal,” Moreno says. “This results in an overall healthy corporate culture.”
4. Ability to Scale
The ability to scale allows your company the bandwidth to comfortably and effectively handle an increasing amount of work. This includes hiring capable employees to ensure that you keep up with demand. If you create a product for sale, this means building it at a cost that the market will bear and getting customers interested and invested enough to buy the product and offer repeat business—all of which helps ensure that you make a profit.
5. Expert Status
Those small-business owners who cement their status as leaders in their fields help ensure that their companies thrive, says social media expert and LinkedIn specialist Karen Yankovich. “The owner of a thriving company finds the time to give back,” she says. “When you’re generous with your products, services and expertise and are able to leverage that to establish your company as an expert in the industry, your expert status leads to greater profits and higher margins and that allows the entire cycle to continue to thrive upwards.”
If you have achieved success and your company is thriving, then by all means bring out the champagne. “There are plenty of challenges in running a small business and success requires many leaps of faith,” Novitsky says. “Acknowledge the wins, large and small. Remind yourself that you’re going places where no one has been and doing things that have not been done. When it works, celebrate!”
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