So we mostly hear about the generally negative nature of the stats surrounding the formation of new businesses, particularly Small to Medium Enterprises (SMEs) which are essentially the backbone of any strong and thriving economy, but how about we flip the script this time and discuss the other side of the coin? We’ve distilled some data, which admittedly is publically available, but it takes a bit of doing to interpret it in a way that presents some of the positives to draw out of the manner in which newly-formed businesses develop.
So as much as most SMEs fail within the first 1-3 years, we’ve drawn some of the main pointers which come together to make up the anatomy of those which typically succeed.
A good core product or service offering
While in this day and age things don’t quite “sell themselves” anymore, you definitely need a good product or service to make up your core offering. This gives you a fighting chance at survival at worst and at best it gives you the chance to thrive. Successful SMEs simply have a good core product or service offering.
This is one element which forms part of the anatomy of a successful SME often hidden from sight; because it’s not something which is ordinarily spoken about or identified as a key ingredient in the operation of a business that will go on to succeed. And leverage doesn’t necessarily have to exist in the pure monetary sense, like it would in the financial industry.
If for example you’ve established a good relationship with a supplier of some raw materials you use to manufacture or produce your final product, being able to take delivery and pay for it later is a form of leverage.
Effective market targeting
This perhaps goes back to having a good core product or service as part of your offering. Nothing sells itself these days, no matter how good it is, so the successful SMEs have simply mastered the art of effectively targeting the right market with their offerings.
There is not much to this requirement as part of what it takes to make up the anatomy of an SME which goes on to realise some success. Good management is a requisite, which simply means as the major decision-makers of the business you have to take responsibility.
Certain things that must be done must simply get done, but that doesn’t mean you’re always going to make the right decision. The key to success is getting it right more times than you get it wrong.
Good record-keeping as part of the anatomy of a successful SME is applied to both the financial dealings as well as the core operations. With the former, the most effective and cost-effective way would exist in the form of very simple yet intuitively complete solutions such as The Business Backer, which by the way is web-based and free, while the latter’s complexity largely just depends on the line of business in which you’re operating.
Either way, keeping accurate records of the business’s data is often the major key to success.