Everyone deserves the opportunity to earn a livelihood, provide for their family and support their communities. Jobs and economic opportunities are a vital pathway out of poverty. For many people, starting a business of their own can be empowering and life-changing. However, great talent and good intentions are not necessarily a guarantee of a successful business.
What does business success mean?
A business is any organisation that makes goods or provides services. There are many types of business. These range from small enterprises owned and run by just one person, through to large companies which employ thousands of staff all over the world. An entrepreneur is someone who sets up a business.
One of the most important aspects of business success is earning a profit. A profit is the money you have left when you have received all of your income and have paid all of your operating costs and loan repayments during a certain period.
Small businesses that do not make a profit will eventually have to close. However, there is a lot more to success than just financial returns. Some businesses operate as a social enterprise, which creates social as well as financial benefits. These businesses will often accept lower financial returns in order to bring about greater social impact. For example, the company Sanergy uses a business approach to tackle the sanitation crisis in Kenya by making hygienic toilets affordable and accessible in Nairobi’s slums.
Business success is also determined by how ethically a business conducts itself. Businesses can choose to follow environmentally responsible practices and provide fair wages and good working conditions for any employees.
What does a business need to succeed?
There are a number of common skills and attributes that a successful entrepreneur and/or business will display:
- Motivation and attitude: It takes time and effort to start a new business and begin making a profit. It is important to have a clear understanding of the reason you want to start a business, and the passion and positivity to stay motivated and see the business succeed.
- Business plan: Successful businesses need to have a clear business plan, which gives an outline of the business and how it aims to achieve its goals. It needs to be simple and concise, and to show an understanding of the market (eg who you will be selling to and how many other companies are already selling similar products). It should also explain how the business aims to make money, and over what time period.
- Good record-keeping: In order to understand whether your business is on track for success, it is important to keep good records. These records will help you to manage your business on a day-to-day basis and identify potential challenges that need to be addressed.
- Organisation: Being organised will help you stay focused and complete the tasks that need to be done for your business to flourish.
- Ways of managing risk: Your business can be threatened by unpredictable weather and other forces outside your control. Find out about the likely risks you may face and ways to minimise or manage them (see page 20). This will help reduce the damage they could cause to your business.
- Awareness of competition: Understand the market in which you are operating. There will be other existing businesses that will be competing with you for customers. Be creative and think about how you can make your business stand out from others.
- Consistently high-quality goods or service: Customers want to know that you will provide the same high-quality goods or service each time they visit your business. If you do this, they will be more likely to come to you again the next time!