Owners of small businesses must constantly be aware of the need to change the business strategy under the pressure of factors such as increased competition, changes in the economy, the emergence of new regulations. It can also be factors such as reduced productivity, increased business costs, high staff turnover, increased production costs, changes in prices for materials and components. Dozens of business essays are devoted to these issues so we also decided to find out what factors make your business work.
Main Factors That Are Relevant for Any Business
- First of all, this is the market where the company is represented. Successful companies work in the world, large markets or the market must actively develop. Only, in this case, business, both beginning and developed, has many opportunities to realize its goals and objectives.
- Popularity and uniqueness of the goods or services offered by the company. It is hardly possible to find a company that has achieved success without offering a unique product. The sale of goods or services “like everyone else” understates the value of the offer and is an obstacle to higher profits. Therefore, first of all, a successful company reveals the value of its product or service in terms of uniqueness and relevance.
- Multiple sales. Moreover, it is not only the presence of regular customers who make repeated purchases but also the availability of this type of activity, which involves further partnership. For example, it can be the sale of cars with their further services or services that are used periodically (Internet, telephony, and others). The absence of multiple sales leads to an increase in the costs of the enterprise because the search for new customers is more expensive than constant interaction with the available ones. This is a very laborious and costly process with the exploitation of both temporary and material resources.
- Increasing the efficiency of the company. First of all, we are talking about the effective expenditure of the main resource – time, by investing in the development of business, and not in its maintenance.
- Continuous improvement of the quality of service. Successful companies constantly care about the level of quality of their goods or services. Especially in the case of a company that has just opened up and started its journey to success. The quality of the offered goods or services is the guarantee of repeated sales, of which we have spoken above. The client will not return to the company if he is not satisfied with the level of service. Therefore, it is important to prioritize the needs of the client, not the company.
- Preservation of good reputation. Developed communications in a matter of minutes can destroy the reputation of any company. Often, reviews, especially about the negative experience of contacting the company, remain on the Internet for a long time; therefore it is important to monitor this situation.
Key Success Factors as a Management Tool
Some companies year after year increase their sales, thereby strengthening market positions, while others fail on this path. What is the difference between them? It’s a matter of skill or, conversely, inability to handle such a management tool as “key success factors”.
This scientific model was created by top manager Ron Daniel in 1961, and since then for more than 50 years it has been used by both multinational corporations and private entrepreneurs.
The model well explains the reasons for the success of companies and their units. According to Ron Daniel, if a firm or an individual businessman achieves a positive result in a limited number of areas of activity, competition will be won. The “key success factors” model implies that attention should be focused on certain areas of business. It is needed to achieve maximum results in them, not to allow any failures – and success will certainly come.
6 Facts About Key Success Factors in the Industry
- People responsible for the organization’s strategy are required to understand the sphere of the company’s activities perfectly. The fact is that each industry has its own success factors.
- There are two areas where key success factors play an extremely important role: workflow management and personnel management, and none of them should be neglected.
- One of the important components is the task assigned to the firm. Its logical continuation is precisely the key factors of business success.
- Modern realities are such that the firm’s competitiveness often depends on its ability to modernize the process with the help of modern technologies. (We will explain this issue in further paragraphs in more detail).
- Companies involved in marketing should take care of brand strengthening, advertising and be providing guarantees to customers.
- With regard to the human factor, the company can lead to success by improving the communication culture of employees, their ability to accept change and work in a team, and the development of an effective communication system.
7 Types of Key Success Factors
- Factors associated with production:
- high labor productivity;
- quality of production;
- availability of low-cost production and its effectiveness;
- optimal placement of production,
- minimizing its costs; high capital productivity;
- availability of qualified personnel;
- cheap design and maintenance;
- the ability to rebuild production in the event of a change in its size and models.
- Factors related to distribution:
- the availability of a trading network;
- availability of revenue-generating retail trade;
- the presence of an impressive network of distributors/dealers;
- the possibility of fast delivery of goods.
- Factors related to marketing:
- a large assortment;
- good design and packaging;
- professionalism of employees;
- proven methods of working with clients;
- great service;
- the ability to meet customer requests;
- availability of product warranty.
- Factors related to qualifications:
- the availability of technology experts;
- the presence of experts in the field of design;
- the presence of talented employees;
- improvement of quality control;
- accurate, comprehensible and simultaneously interesting advertising;
- the possibility of bringing new products to the market.
- Factors related to the organization’s capabilities:
- the ability to adapt to new conditions;
- professionalism of the leader; availability of know-how in the management system;
- availability of information systems of high quality.
- Mixed types of key success factors:
- protected patents;
- awareness of the company’s leading position;
- excellent reputation and good image of the company;
- convenient location of offices;
- high-quality service;
- adequate financial capacity.
- Factors related to technology:
- the use of innovations in products;
- the use of innovations in production processes;
- competently conducted scientific research;
- availability of technology experts.
So let’s move to the question of how IT services can run your business efficiently.
IT Services Run your Business Effectively
According to the research, small companies work more efficiently outside the office thanks to modern technologies and flexible schedules. Small businesses account for 99% of business in Europe, and 9 out of 10 enterprises have a staff of fewer than 10 people. According to a study by Ipsos MORI commissioned by Microsoft, 40% of employees of such micro-companies believe that cloud technologies contribute to the development of their business.
Considering that more than half (54%) of employees of small companies have flexible working hours, and every third (37%) regularly works at off-site hours, the demand for technology for remote work is natural. Availability of reliable and affordable remote work services is especially important for a segment of start-up businesses that can not always afford expensive corporate software packages and servers.
In addition, about a third (35%) of micro-business employees have the opportunity to use their laptops, tablets, and smartphones to perform work tasks and integrate them with the internal corporate system. The introduction of the BYOD (bring your own device) policy, when employees use personal devices in their work, allows them to be more flexible than small (28%) companies with more than 10 employees.
Thus, today small companies have got a new opportunity to use modern cloud technologies, which were previously only available to large corporations. And this can be their main competitive advantage. In conditions of limited budgets, cloud solutions are more attractive, since they can offer higher productivity in comparison with traditional infrastructural solutions. In addition, cloud tools provide an opportunity to scale the business and pay only for the resource that the company really uses.
At the same time, 50% of employees of small companies believe that their enterprises spend less on IT than they should, and further investments in modern technologies will allow the company to improve business processes.
On a Concluding Note
In order for a company to develop, its specialists need to identify key factors for success. To do this, they must be able to forecast changes in the market segment and take into account possible competition, determine the types and amount of required resources. It is also necessary to have the ability to clearly analyze the current situation and choose the best strategy at the moment. Also, one should not forget about innovative solutions that give flexibility, economy and higher productivity at the same time.