A business is considered as being successful if it makes consistent profit and experiences progressive growth in the scale of its operations.
Some of the factors that lead to the success of business may include:
- Right choice of business-A good business opportunity needs to be evaluated on the basis of ability to capture many customers, make reasonable profit for the owner(s) and provide an opportunity for growth. Making the right choice of a business or product ultimately contributes to the success of a business.
- Proper managerial skills-An entrepreneur should be able to carry out management roles effectively. A good manager will carry out roles such as;
- Hiring staff-The process of acquiring new employees to take up new positions or to replace employees who have left the business.
- Assigning duties-Allocating employees duties according to their qualifications.
- Supervising-Ensuring that employees carry out tasks that are assigned to them
- Training-Enabling employees to acquire knowledge and skills necessary to perform duties assigned to them.
- Motivating-giving employees inducement to perform their duties.
- Proper location/availability of customers-The business should be situated in a place convenient for its operations e.g. where customers are easily available.
- Adequate finance/capital-Money is needed to acquire other resources that are required the business. A business that has adequate capital is likely to do well as it is able to finance all its operations.
- Lack of competition-Most businesses are put out of operation stiff competition. Therefore, a business operating in an area where there is little or no competition is likely to succeed.
- Commitment to business
- Proper financial management-Proper management of finances is necessary for the success of the business. It ensures that money is available and is used for the intended purpose.
Management of finances includes:
- Acquisition of finances-This involves raising of the required amounts of money. This can be done through a variety of ways such as loans from financial institutions and owner’s contributions.
- Managing cash-This ensures that the available money is only used for the activities that are beneficial to the well being of the business.
- Proper record keeping-This involves having a record of finances raised and how they are used.
- Proper debt management-Care should be taken to ensure that credit is only extended to credit worthy customers (credit worthy customers are those whose chances of paying are high). Debt collection should also be carefully planned to ensure that they are collected when due.
- Good public relations-This involves creating and improving a good relationship between the business and other people. Good relations are necessary for attracting and retention of customers.
- Being creative and innovative-This involves finding new uses of a product, new channels of communication and new ways of doing things. This enables the entrepreneur to be ahead of others.
- Proper market research-The business environment usually changes at a high rate. This makes it necessary for an entrepreneur to study his/her customer’s preferences, tastes, spending patterns, income levels, competitions, and behavior and substitute products.
- Good/proper time management-Time management is the ability to carry out planned activities within the allocated period.
- Proper skills and attitudes of employees-Employing qualified staff results in work being done in a professional manner. This enhances the performance of the business.
- Proper pricing of goods and services-Pricing should be done appropriately. If the prices for the products are too high, the business will lose customers. Very low prices may attract customers but kill the business. It is therefore important to create a balance between price to charge and the profit margin to realize.