What does a start-up need to get right in order to fledge into an established business? In this blog, we explore the key ingredients of business success.

The business idea can be unlike anything the world has seen before. The product may be of the highest quality and yet…

8 in 10 companies fail in the first year, a startling statistic found when a research company scrapped data from Companies House.

What is not included in this data are those sole traders or partnerships that didn’t register with Companies House as they were still in their infancy but didn’t make it.

There are many reasons why businesses fail. And yet, despite knowing these, the rate of failure is still high.

We live in an ever-changing world where consumer demands, wants, needs and expectations change at a lightning-fast pace. As a business, new or established, it is essential to keep step and to make changes that satisfy customers.

And yet, a business can be slow to respond or fail to read the signs that times have changed.

There are many other ingredients to business success. Building your knowledge is an essential factor to establishing your company, there are plenty of business management courses to help you along the way. What is the perfect combination that signals success?

1.   Getting the product or service RIGHT

This can trip up established companies just as it can new businesses but a poorly thought out and a poor quality-controlled product can spell D-I-S-A-S-T-E-R.

In effect, this is all about impression. And when you make the wrong impression, it takes a lot to come back from this negativity.

But it isn’t just that, its about producing a quality item that will enhance a customer’s life. Sounds far-fetched, but just think of the humble potato peeler and how much that has helped people over the years to peel potatoes easier, and without too much waste.

As well as quality, you need plenty of product research finding out what works and what doesn’t.

It is also about getting the branding right, something that can be far more complex than first realised.

HINT – If your product does fail, that doesn’t mean the end of it because there are valuable lessons in failure.

2.   Marketing and promotion

There are two reasons why a business fails when it comes to its marketing;

  1. It didn’t do enough market or none at all
  2. It did the wrong kind of marketing

Both spell disaster for a business and so getting it right is an important ingredient of business success.

Not doing enough means that customers are not alerted to a business or its product. But it isn’t just that: marketing can be a valuable avenue of letting customers know why your brand can be trusted.

It is often assumed that any marketing campaign is, therefore, better than none. And so, leaflets are printed, adverts designed, and tweets sent out.

This scattergun approach rarely gets the results that a business needs thus, many entrepreneurs must learn about marketing.

Effectively, marketing needs to target the right customers and in the right way. And this means understanding who your customer is.

3.   Understanding customer demographic

Effectively, a successful business has answered the question ‘who is our customer?’

How old are they? Are they male or female? Where do they live? What do they do? Why do they need the product or service? What problems is the product solving?

Defining your customer is not a hard thing to do but clearly, a business who has an in-depth of understanding of who they are aiming their product are, are far more successful than ones that don’t.

Customer demographic defines everything – from the packaging of a product to branding, to the marketing message to the marketing methods used.

HINT – businesses that have an innate understanding of their customer demographic also realise the importance of staying in tune with customer expectations and needs.

4.   Talent

A successful business will have, at its heart, a pool of talent, skilled people that will drive the business forward.

And yet, so many businesses fail to seek our fresh and new talent to help them do this.

At one time, people left school and went to a ‘job for life’. They weren’t expected to or had little expectation of moving from one job to another.

The workplace has changed and is changing: people no longer want to be with one company for all of their careers. They want new and exciting opportunities, and they understand that to find these, they may need to look elsewhere.

This sounds bad news for a business that it could effectively leak talent at a time when it needs it most.

What it can do, however, is breathe fresh air through a business, with new people bringing new ideas and new ways of doing things.

On the other hand, however, a transient workforce in and out means larger recruitment cost and stunted growth as you continually induct new members of staff into your way of doing things.

Finding and holding on to talented people with key skills is essential and critical to the ongoing success of a business.

If you look at a successful business, you will see that the reason why they hold on to people and why people apply for roles with them in the first place is the culture within it.

Collaborative, creative, free to explore new ideas and so on, all contribute to a workplace where people want to be.

5.   Financial control

Effectively, the first four ingredients examined have been important but of all the ingredients listed for a successful business, this is the one that most commonly stops a business in its tracks.

The recent recession has seen big brands disappear from the high street and online. From Woolworth’s, a long-established and favourite high street to the recent demise of Toys R’ Us, alongside tough trading conditions and failure to adapt, it was also spiralling financial issues that finally put paid to their trading.

Finances can soon be out of control and once it starts its spiral, wrestling it back is something few manage.

From managing cash flow to balance sheets that show the business net worth, being pedantic about the financial health of a business will pay dividends.

Keeping outgoings low means you keep your business competitive. Reducing financial waste by looking for the best deal is something that could have saved some smaller businesses, and for bigger businesses, keeping borrowing under control would no doubt have helped their survival.

From employing your own financial experts to investing in software accounting packages to working closely with your accountant, understanding the financial shape your business is in, makes you and it more responsive. A business administration course can be used to help teach you the skills you will need to help keep you on top of some financial elements of the business.

HINT – ‘cutting costs’ isn’t always the solution. Investment and borrowing have their place but there needs to be careful financial forecasting too.

6.   Passion

As a business grows, it almost takes on its own character. It becomes a ‘thing’.

For the person or people who started the business, it represents their life’s work in many ways.

They have lived and breathed it. They have asked tough questions and placed themselves in uncomfortable positions. They have believed in their business idea, what they are offering. They have believed in themselves.

They have kept going when others have disparaged them, ridiculed their ideas or criticised their product.

Dogged and determined, their business did flourish. And it continues to do so because this passion still burns.

However, there can be a pitfall and that is leader dysfunction. As a business owner, there comes a time where maybe, you have to admit to yourself, you are not the right person to take the business further.

Heart-breaking it may be to sell or move on, but in other ways, it is a relief. This is no reflection on the person – far from it, it takes courage to admit when you no longer have the skills to grow the business – but a clear indication that you have created a successful business.

In summary

A successful business is a combination of ingredients from marketing strategies to branding, along with a sprinkling of luck.

It starts with a business idea and morphs from there but along with these ingredients, a successful business could be in the offing;

What else do you think makes for a successful business?

Whether they were distance learners, returned to education or worked their way up from the very bottom, here are some inspirational case studies of people who didn’t do the expected thing.

Not everyone follows the same path on their life journey and that is certainly true when it comes to education and making your way in the world of work. Increasingly, students fresh out of school and those looking to return to education, find that the traditional route is debt-heavy. Who wants to come out the other side with a degree, but a large bank of debt?

With this mind, as well as the fact that life sometimes has a habit of getting in the way of lectures and seminars, we take a look at some case studies of people known for their contribution to business, politics and society but who chose a different path to the university route.

Deborah Meaden

A member of the Dragon’s Den panel, Deborah Meaden is a successful businesswoman. Leaving school at 16, she attended Brighton technical college before her first job. She set up her own glass and ceramics business at 19 and has always been keen to let people know that there is more than one route to success, and university isn’t always it.  She now has a string of businesses and is worth an estimated £40 million. Follow her on Twitter @DeborahMeaden.

Sir John Major

Politics has long been traditionally dominated by white, upper-class males, most of whom will have attended Eton or Oxbridge. This pattern is slowly changing with former Tory prime minister John Major breaking the mould. Leaving school at 16, he didn’t complete higher or further education but by the age of 21, had been elected to Lambeth Council. Climbing the ranks through local government, he was prime minister from 1990 to 1997.

Sir Richard Branson

Possibly one of the most famous entrepreneurs, Richard Branson is known for pushing many boundaries such as introducing a ‘take as much annual leave as you need’ policy within his business. He left school at 15 years of age with no more than a few O levels to his name. His business empire began when he started to produce a magazine called ‘The Student’ but it was his record selling business, Virgin, that he is best known for. Now worth billions, he has always said you ‘learn by doing and falling over’.

Julie Burchill

Leaving school without A-levels or any kind of higher education courses under your belt is almost unheard of but this best-selling author and newspaper columnist did exactly that – and has never looked back. Cutting her journalistic teeth at music newspaper NME, Julie has since said that as a child, she wanted two things. One was to be left alone to read her library books and the other was to leave her provincial town behind and live in London, as a writer.  Despite not having the qualifications expected of most journalists, Julie has gone on to do exactly that, and successfully too.

Steve Jobs

Whether you prefer Android or Apple, there is no getting away from the runaway success of the late Steve Jobs. He did start to attend university but dropped out – possibly through boredom, something he struggled with during formal education – finding what he needed by studying Buddhism in India instead. He was always clear that success is not something gifted to people but something that is worked for. His advice is as true today as it was when he was talking about the start of his now global technological empire. He said “Be early. Stay late. Send the extra email. Do the extra research. Help a customer unload or unpack a shipment”. In other words, go the extra mile.

Life Long Learning

There was a phrase used extensively throughout the 90s and into the 21st Century that encouraged people to not see learning as something that ‘just happened in school’. And neither is the only learning with value in the classroom.

Employers have long realised this too and although they look for evidence of basic qualifications – good grades in maths, English and possibly Science too – they are just as interested in the experiences, soft and transferable skills that someone will bring to a role.

There is no denying that home learning courses from GCSE Maths and English to additional learning awareness courses for those in education and training are incredibly valuable. They allow you to study and consolidate your learning and skills at your own pace and in your own time.

Which of these stories have inspired you?