What’s the Good Business Success Formula?

Is there a secret formula that will ensure your good business is set up for long-term sustainability? This is what I have been discovering over the last 8 years and my summary of what I have discovered so far.

When I graduated from Sussex University nearly a decade ago, I was dead set on uncovering why 20% of start-ups fail in their first year and 60% do not make it past 3 years. I believed that if I could get clear on what barriers were getting in their way, I could focus on what truly matters to support the right sorts of ideas to survive the test of time and contribute to making the world a better place than when I found it.

This curiosity lead me down a varied career path:

From working as employee #1 for a couple of startups, seeing firsthand what founders were dealing with on a day-to-day basis
Getting trained in ‘Teaching and Training’ as a tool to better translate lessons to those I wanted to work with
Designing and delivering business support programs and event series
Helping create and nurture 5 communities both in-person and online
And co-founding a social enterprise - The Good Business Club

What I have learned personally, and from working with 100s of business owners across this timeframe, is that although there isn’t a formula per se to ensure you’re setting up a sustainable business (sorry folks), what is evident is that there are 5 key pillars that, if attended to, will give good businesses the best chance of success.

Importantly, if these areas are ignored or left unattended I’ve found this dramatically reduces the chances of that business being around in 5 years time and founders will struggle to make it work (for themselves as much as for the business) during that time.

Here are the 5 pillars that we’ll delve into deeper for the rest of the article:

Mindset
Finance and Funding
Marketing
Sales
Network

Mindset

Ever feel like everyone else has a better grasp on what they are doing and that you’re winging it every day? Well, that’s actually more common than you think. If someone is running their first business they are likely to lack confidence, stemming, understandably, from inexperience. And although it makes a lot of sense, we unnecessarily give ourselves a hard time about it.

The mindset that I’ve found most successful business owners possess is one commonly termed ‘growth mindset’, meaning they are ready to accept where their knowledge gaps are and are open to developing themselves, through the process of developing their business.

These founders are people who are open-minded and although the - imposter - dialogue in their heads doesn’t disappear, they learn to live confidently alongside it by not trying to hide it (from themselves or others).

Finance and Funding

It did not surprise me to discover that the most inspiring good businesses I have identified are the ones set up by people who have commercial experience that they bring to the table. What I believe this means is that they are stronger in knowing the true value of their offer, they unapologetically price for profit margins, and they take the full cost of running the business into account.

This is critical to long-term sustainability but what about in the first few years of launch, when being profitable isn’t necessarily the objective?

From bootstrapping a business to raising hundreds of thousands of pre-seed investments, I have heard about the challenges and gruelling experiences from both sides and don’t think one path is better than the other.

What I will share is that what too many good businesses, particularly social enterprises, fall into is ‘the funding trap’. This is the innocent plan founders map out to access funding to get their business idea off the ground and then get locked into focusing just on deliverables for that project without any resources focused on developing flexible income. Then when the funding runs out, they go back for more funding to bridge the gap but actually, this just locks them into the same situation as before.

Marketing

Marketing is a broad topic but what I have found to be critical to success is not necessarily the tactics or platforms businesses use to communicate with their audience, it’s understanding their audience in the first place.

If a business founder hasn’t done the necessary work to identify who their customer and other stakeholders are (and aren’t) this leads to badly targeted communication techniques that drain the business' resources without adding value.

Mapping our customer profiles, working on messaging that relates to them, and creating a brand that builds trust and credibility, at every touch point, is what successful good businesses invest their time into. Choosing what social media platform to be on should only come after this initial work has been done.

Sales

Alongside the word ‘profit’, ‘sales’ is a word that turns off many good business owners, myself included. This is usually the case because, unless trained in effective selling, founders assume every potential customer is ready (and should) buy at the first interaction and, rather than understanding how to serve them, we push our offers into their space - normally putting their backs up.

These painful experiences, which I have since learned isn’t what good selling looks like, leave a bitter taste for everyone involved and leaves businesses stale before they have even had a chance of success.

I’ve seen successful business owners skill themselves up in the first instance and then build teams to take on the selling side of the business, freeing them up to focus on parts of the business they are actually skilled in.

Like finances, sales is the lifeline to sustain a business and if ignored or attempted without confidence, even the best products or services don’t stand a chance.

Network

A lot of people dread the term ‘network’ and wish they could lock themselves away and run a successful business in a silo. But a business needs a network to survive and the best good business owners use their networks to thrive.

The first step is surrounding yourself with people who are more experienced as well as people who are your biggest cheerleaders. You also want to be connected to people working in the same sector as you as well as business owners running the same sorts of business to you.

Then comes the magic. When you are approaching something new or aren’t sure how you are going to take the next big step, reach out to that community and - wait for it - ask for help.

If you can do both those steps continuously, you’ll find that running the business isn’t just easier but you’ll get further, much faster, as well.

So, while there may not be a simple formula as such that ensures success, I believe that attention focus on these 5 areas gives any business the best chance of being around in 10 years time, which I’ll continue to test.