Every business has a different focus and aspects that are crucial to its success. There is no one size fits all solution for every company. For example, if you’re running a bakery, then labor cost is a huge part of your income. If you own a consulting company, the quality of your teamwork is essential to making money. Whatever industry you’re in, these six crucial aspects of business success represent the difference between growing and going out of business.
6 crucial aspects of business success
Businesses succeed or fail based on their ability to sell to customers at a profit.
Sounds simple, right?
Well, it’s not anywhere near that simple. It takes a strategic plan that’s crafted in sufficient detail from research on both internal and external factors that impact business performance. It takes monitoring to modify your efforts so you optimize your outcomes. And, more than anything, building a strategic plan involves focusing on those crucial aspects of business success rather than getting sidetracked by trying to do too much and getting distracted from these key aspects.
To help you focus, we developed these 6 key aspects of business success that transcend individual business models and should guide you on where to place your efforts.
#1 Customer service
If you want success, the first thing you need to do is make sure your customers are happy. If they aren’t happy with the goods and service you provide, don’t expect repeat business or referrals anytime soon! So if you can get this right from day one, it sets the tone for everything else in your company moving forward.
If you can’t deliver on quality, then transparency and communication are key to fixing problems. That means getting back to dissatisfied customers quickly, resolving issues efficiently, and making their experience a positive one overall.
In addition, you should make sure that your employees are happy, too. If employees feel like you care about them, they generate higher levels of productivity and work to make customers happy. Happy employees equal happy customers.
#2 Marketing strategy
Marketing is essential for any business, regardless of its size, since marketing is the only activity that brings money into the business. Financing, on the other hand, brings debt along with money, so it’s a cost. Thus, building a strong marketing strategy is a key element of a strategic plan. The marketing plan should identify the needs of customers, how well you meet these needs vis-a-vis the competition, as well as specifics regarding product choices, pricing, advertising, and channels of distribution.
But again, it’s important to tailor these strategies specifically for your company and the environment in which you operate. So experiment until you find what works best! Remember: just because a certain strategy worked well for another business, doesn’t mean it will work for you too. So be sure to test everything before committing significant resources to it.
Product innovation is a key aspect of your marketing strategy as customer needs and competitive pressures change over time. Build market sensing into your business and encourage innovation so you’re ahead of the curve. Promotion involves coordinating across channels with a consistent message that resonates with customers and prospects. Choosing the right distribution channels means your customers can easily acquire goods at the right price, in the right place, and at the right time.
To keep all marketing strategies running smoothly, don’t forget to partner with a reputable company such as National IT Management Solutions to ensure your systems don’t get hacked and you can meet the needs of your business in an increasingly technology-driven world.
#3 Labor costs
Labor costs are an often-overlooked aspect of running a business. Not only do labor costs directly impact the value delivered to customers, but they also represent a tool for achieving employee satisfaction. In a world dominated by the Great Resignation and rising labor shortages, labor costs are increasing. In labor-intensive industries, these costs trickle through the economy quickly.
You need to ensure you pay your employees what they’re worth and not overpay them either! Remember that labor rates not only translate directly into product costs but contribute to overall labor costs. For instance, paying low wages might help keep product costs down but they also contribute to employees leaving your firm for higher-paying options. You must hire and train new employees (with associated costs) and face lower productivity and, potentially, lower customers satisfaction as new hires learn the ropes.
It’s important to remember that the right wage rates vary depending on your region, so it’s best to do some research beforehand. For example, in areas with high living costs (like San Francisco or New York City), labor rates are much higher than in rural towns. Allowing employees to work remotely reduces these differentials.
#4 Quality of goods and services offered
Your customers should always come first. If they aren’t happy with your goods or service, you won’t get repeat business and word-of-mouth recommendations going for you either, which hurts your brand reputation in the long run! And no matter how great a company is at marketing their products – if those goods/services represent poor quality, people won’t pay as much for them.
Yet, low price alone isn’t enough to overcome poor product quality. In fact, some potential buyers may decide to never buy from your company again at all (no matter what kind of deal the company offers). This doesn’t mean under-pricing yourself so that you can compete on price instead of quality. It means investing enough money into research & development so that you create the best possible products (for the price). Competing on quality is sustainable as it’s hard to copy while reducing the price to compensate for poor quality means only the company that can withstand losses will survive.
#5 Value for customers’ money
Pricing is an often misunderstood aspect of marketing, as reflected in some of the comments above. If there isn’t enough demand for your products at current pricing levels, then offering lower prices might not bring new customers through the door – but rather push away those loyal customers who stuck around through higher prices if you must change other aspects of the business to save money.
Thus, rather than focus on prices, focus on the value you provide your customers. Are they getting a good bang for their buck? If not, then it’s time to re-evaluate what you’re offering so you create greater value. Maybe consider introducing a new product that provides more value for the same (or even less) money. Or find ways to improve your current offerings, so customers feel like they’re getting more for their hard-earned cash. For instance, consider bundling products and offering a lower price than the combined unit price. This offers greater value while encouraging customers to consume higher quantities of products.
It can be difficult to increase prices without making customers feel like they’re being taken advantage of, but if you can provide added value on top of the increased price, then it becomes much easier. For example, if you raise your rates by $20 but include an extra month of customer support, then you’re still giving them more value while not increasing your prices drastically. The candy companies absorb increased material costs, for instance, by decreasing product size so they can offer a somewhat smaller product (a change that most customers don’t even notice) but keep the price the same.
#6 Management team
Last but not least, the management team is crucial to the success of any business. This includes the owner/CEO, key executives, managers, and other essential personnel. If you don’t have a good team in place, it is challenging to make smart decisions to help your company grow. And even if you do have a great team, they still need adequate support and tools that support teamwork, team cohesion, and communication.
Using a bottom-up management strategy where everyone feels they have a voice in how the business operates offers a distinct advantage over more traditional management structures that rely on a top-down approach through a very structured organizational chart. Also, involving employees in decision-making means gleaning insights from the folks who have unique knowledge of what’s going on at a granular level as opposed to the CEO who may know little about how the sausage gets made.
In conclusion, these are just a few of the most crucial aspects of business success. You can help your company grow and succeed by keeping these in mind!