Updated: Aug 31
A successful business is multifaceted. Here are the 3 core characteristics of a successful business:
1. Efficient Management of Resources
There are primarily 4 types of resources in business: material, human, financial, and information. A successful business manager efficiently manages all these.
Material resources. Raw materials are needed to produce products or render services to your customers. A successful business uses quality materials to produce the best output without sacrificing profit. Business owners must also ensure they have sufficient supply of material resources to cater customer demands.
Human resources. Human resources include the essential people needed to produce products or render services. They use their knowledge, skills and experience to meet business goals and objectives. In return, they are paid wages by the business owners. People are considered as the most important assets within organizations.
Financial resources. This pertains to the money business owners use to pay for raw materials, machines, employee salaries, business rent or mortgages, utility bills, insurance, advertising, and other stuff that keep the business running. Careful planning and proper risk management are very important tasks to ensure the business does not drain its financial resources.
Information resources. It is a set of valuable and organized information essential in managing all other resources. Successful businesses use information to accomplish their vision, mission, goals and objectives. They also use it to constantly improve their products or services. Risk, inconsistencies, inefficiencies, and other important issues can be addressed by looking at these data. Some examples of information resources are:
employee training manuals,
policies and procedures manuals,
operational and strategic plans,
accounting and financial reports,
customer or employee satisfaction surveys,
products or services information,
legal documents, and others.
2. Ability to Satisfy Customers
Just as they say, our customers determine our paychecks. As a business owner, your topmost concern is how to satisfy your customers' needs and wants. Money only comes next. Definitely, delivery of poor quality products and services will never result to long-term success.
Determine how you can be better than your competitors. Apply the concepts of creativity and innovation to create something valuable for the people.
In addition, satisfying your customers not only means offering money-worth products or services. Oftentimes, your people skills will definitely influence how well you can market and sell what you offer, as well as reach your customers' expectations. Interpersonal skills include the concepts of:
verbal and non-verbal communication,
problem solving and decision making,
honesty, and others.
Strong interpersonal skills can cultivate loyalty and appreciation among your customers.
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3. Ability to Produce Profit
Production of products and service requires expenses, both fixed and variable. Your profit only comes after these expenses (costs associated with raw materials, machines, employee salary, rent, insurance, etc.) have been deducted from your sales revenue.
Consistent losses, that is when your expenses are greater than your sales revenue, could result to a failed business. Both owner and employees must cooperate to minimize losses while maintaining quality products and services.
Business owners reap the profit rewards of their entrepreneurial risk-taking behaviors only after everyone else (suppliers, employees, lenders, etc.) has been paid.
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