What is success?
The last year has seen the highest level of start-ups since the last recession. In 2011/12 there were over 450,000 new businesses registered.
However, the unfortunate reality is most of these ventures are unlikely to be a success; new businesses have a high failure rate. Some do not even survive their first year and only a minority will make it past five years.
At Sackmans we have a service designed especially for start-ups and young businesses. The service is called Ignition and the objective is to increase success rates of the businesses by sharing knowledge.
With this in mind we carry out extensive research into critical success factors. This post and others are based on what we have taken by a report “Success in challenging times” published by the University of Surrey and Top 20 accountants Kingston Smith. The report is based on over 1,000 business owners and managers to share their views. This makes it one of the biggest ever in small businesses in the UK.
It was agreed that although it was good to have dreams, the key to success for businesses was financial success; specifically maintaining cash flow. This includes not growing too fast, as this can suck cash too quickly out of the business. Many businesses which are profitable go bust because of lack of cashflow.
There were other financial definitions of success including:
- Achieve recurring revenues
- Creating shareholder value
However, for some success was also based upon non-financial measures such as:
- A sense of fulfilment or challenge
- Building a lifestyle business and work-life balance
- Enhanced reputation
- Being seen as making a contribution to society
At the beginning of the Ignition Programme we encourage business owners to think and define for themselves how they will determine their success. Getting to breakeven is survival, that is a necessity but what is success for you?
Once you have this you can measure against in.