The difference between success and failure?
Discussion
Hi!
I've only recently discovered this fascinating and very useful business forum! Its encouraging to see so many people on here with their own successful businesses
. Anyway, I thought I'd pose a question to you...
What do you company owners/MDs/{anyone who wants to add their bit} think is the single most important aspect of a business to get right to avoid failure? Would you say that its all about the product, or will a single minded desire to achieve overcome all even if you're offering a sub-standard service? I know that at some point in the future I will have a prominent position in a company, even if it is not my own, and I'd be interested to hear what you think is the key to operating a successful concern.
Cheers in advance
Ric
I've only recently discovered this fascinating and very useful business forum! Its encouraging to see so many people on here with their own successful businesses
. Anyway, I thought I'd pose a question to you... What do you company owners/MDs/{anyone who wants to add their bit} think is the single most important aspect of a business to get right to avoid failure? Would you say that its all about the product, or will a single minded desire to achieve overcome all even if you're offering a sub-standard service? I know that at some point in the future I will have a prominent position in a company, even if it is not my own, and I'd be interested to hear what you think is the key to operating a successful concern.
Cheers in advance
Ric
1; Customer service. Never ever let anyone be better than you at this. It's the easiest thing to get right AND the easiest thing to get wrong.
2; Pay your bills on time, every time.This puts you at the top of the heap when you need to call in a favour from a supplier.
3; Best bit of advice I was ever given. Never ever put off 'til tomorrow what you can do today.
4;You don't need to be the cheapest, but make damn sure you're the best.
2; Pay your bills on time, every time.This puts you at the top of the heap when you need to call in a favour from a supplier.
3; Best bit of advice I was ever given. Never ever put off 'til tomorrow what you can do today.
4;You don't need to be the cheapest, but make damn sure you're the best.
Edited by sjc on Thursday 17th May 08:41
tinman0 said:
rick_172 said:
What do you company owners/MDs/{anyone who wants to add their bit} think is the single most important aspect of a business to get right to avoid failure?
the single most important thing - sales.
The single most important thing is receiving payment for sales. 
groomi said:
tinman0 said:
rick_172 said:
What do you company owners/MDs/{anyone who wants to add their bit} think is the single most important aspect of a business to get right to avoid failure?
the single most important thing - sales.
The single most important thing is receiving payment for sales. to generalise, the single most important thing for a business is TRUST. Trust from the customers, investors, employees, neighbours, ...tinman0 said:
rick_172 said:
What do you company owners/MDs/{anyone who wants to add their bit} think is the single most important aspect of a business to get right to avoid failure?
the single most important thing - sales.
Loads of other things are vitally important too.
Good product/service. Market positioning. Quality. Credit control. But if you aren't finding new customers you are fecked. Simple as that.I don't think there is one single thing you need to get right, but if I was stick my neck out I would say the single most important thing is to build a great team, because if the team is right they will understand and be capable of delivering all the points previously mentioned (which are all vitally important).
I'd agree with most points here, obviously getting money for sales is key, but getting people to your product I think is more important.
It's no good having the greatest product, best customer services and best prices, if no one knows about you - and I find that the hardest thing, telling the right people.
Get that right and then at least you can work with what comes in - like the web and every other business - traffic is king, whether it be on the phone/foot or links.
Cheers,
JC
It's no good having the greatest product, best customer services and best prices, if no one knows about you - and I find that the hardest thing, telling the right people.
Get that right and then at least you can work with what comes in - like the web and every other business - traffic is king, whether it be on the phone/foot or links.
Cheers,
JC
groomi said:
tinman0 said:
rick_172 said:
What do you company owners/MDs/{anyone who wants to add their bit} think is the single most important aspect of a business to get right to avoid failure?
the single most important thing - sales.
The single most important thing is receiving payment for sales. nope
Profit
Indeed, what is a success or indeed a failure? Off target? Different than expected? I worked for a company who grew from a £500k company to £65m in 7 years. Yes they were successful and grew very fast. They considered < £3.6m EBITDA a failure!
For me, we are aiming for our the sales forecast in our business plan. As we are investing all of the would be profit back in to the product, profit inst of much concern at the moment.
So.. I would have to agree with the earlier comments. For a new business, sales is key to success. Once you are established, I dare say the teams and customer happiness is more important. I mean 'sales' in terms of orders converted in to cash. Some people call orders, sales (if you know what I mean).
I don't have the same worries as some as local government tend to pay when you invoice. They even have a KPI for it FFS!
For me, we are aiming for our the sales forecast in our business plan. As we are investing all of the would be profit back in to the product, profit inst of much concern at the moment.
So.. I would have to agree with the earlier comments. For a new business, sales is key to success. Once you are established, I dare say the teams and customer happiness is more important. I mean 'sales' in terms of orders converted in to cash. Some people call orders, sales (if you know what I mean).
I don't have the same worries as some as local government tend to pay when you invoice. They even have a KPI for it FFS!
bjwoods said:
Profit
Depends... I am building a business, creating customers, building and creating IPR and establishing the business in the market place. We will probably not make any real profit in 2 or so years. After that we intend to sell of the business to trade or VCs after 3-4 or so years and make our own profit that way. V8 EOL - Rich said:
bjwoods said:
Profit
Depends... I am building a business, creating customers, building and creating IPR and establishing the business in the market place. We will probably not make any real profit in 2 or so years. After that we intend to sell of the business to trade or VCs after 3-4 or so years and make our own profit that way. utimately assuming not a start up of course...
Very easy to get on the ever increasing turnover (ie sales) cycle, yet runn at an ever increasing loss...
Company i used to work for kept chasing the bigger abnd bigger deals. ie 10 mill one, yet would have cost more to deleiver, maintain gear up for, or ignore 3- 4 sep deals for 1-2 mill (with at least 20% profit)
Guess which path comapny chooose. the big one, ignore existing customers, smaller deals, proj goes belly up, so does the companay
bjwoods said:
groomi said:
tinman0 said:
rick_172 said:
What do you company owners/MDs/{anyone who wants to add their bit} think is the single most important aspect of a business to get right to avoid failure?
the single most important thing - sales.
The single most important thing is receiving payment for sales. nope
Profit
Nope, cash.
Overtrading is very common, if you can't pay your bills it doesn't matter how profitable you are.
Choosing the right market can make life easier, we are one of the cheapest suppliers in our industry but our GM still averages 50%. Even with my customer un-friendly attitude it is hard not to do well.
Edited by david_s on Thursday 17th May 13:47
I would suggest that if something is a fundamental requirement for a business, then success without that fundamental requirement is impossible.
If I was assessing the "success" of a business, one of the key criteria I would want to understand is their credit control and cash flow management.
If I was assessing the "success" of a business, one of the key criteria I would want to understand is their credit control and cash flow management.
coyft said:
coyft said:
Eric Mc said:
Cash is king.
Cashflow is a fundamental requirement to a business not a measure of it's success.
But cash is the correct answer to the OP's question "what do you think is the single most important aspect of a business to get right to avoid failure?" In order to avoid failure you need enough cash to pay you outgoings as they become due. If you can do this you will avoid failure. But again avoiding failure is a fundamental requirement, not a measure of it's success.
10 points each to coyft and Eric Mc for remembering the question!
You can do *everything* else that everyone has mentioned right, but if your cashflow is knackered for only a couple of weeks, you can lose everything.
Anything else you can improve upon and learn from, but a single failure in the cashflow department can mean that you are left with an insolvent company and the bank asking for its money back, closing you down and leaving you with £10-£20k which if you are the MD you may have been asked to guarantee yourself...
I don't always agree with Eric, but on this subject we are in complete agreement. You cannot run a successful business without good cash flow but you can run a successful business with low profit margins.
See what happens if you don't have the cash to pay your employees at the end of the month.
See what happens if you don't have the cash to pay your employees at the end of the month.
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