What sets a good business apart from a mediocre one?
If you were to ask 20 different business owners, you’d get many unique answers. Many characteristics turn a potentially good business into a successful one, and we rounded up the top 10 key traits below.
1. A Well Thought Out Plan
Any successful business needs a clear vision and a well thought out plan. While it doesn’t need a complex plan, it should involve marketing strategies, financials, product development and product distribution as the minimum.
2. Strong Leadership
Business leaders are the ones who carry an organisation. Before you make the decision to purchase a business, take a look at its leadership history. How has the business been directed over recent years? There should also be a strong support staff in place and ready to take on management roles at different levels, to ensure a seamless transition/handover.
3. Financial Literacy
The business will have years’ worth of financial reports and documentation that prove its viability. Go over these reports and check the cash flow of the business to get an idea on sales growth and see how well the business budgets for its expenses.
4. Positive Culture
A good business is motivated by more than achieving financial success. If you’re going to buy the organisation, you want to see management teams that have a love for the business, or employees who feel passionate about the products and services being sold. Ensuring the business has a positive culture goes a long way in inspiring loyalty and getting the best out of every staff member.
5. Systems and Structure
Every efficient, dynamic and quality-driven business needs a strong underlying structure. Having structure means there is an existing system in place that ensures consistency, productivity, efficiency and predictability.
6. Flexibility
Flexibility, and the willingness to take risks, are very important to the success of a business. Businesses need to have people who are passionate enough about growth to take calculated risks in order improve their market performance. Make sure the business is flexible enough to keep up with new technology as it becomes available as well. However, there should be a plan in place to mitigate these risks and to ensure the benefits outweigh the drawbacks.
7. Identity
Business identities fall into three potential categories, including “blends in”, “nondescript”, or “stands out”. “Nondescript” businesses and businesses that “blend in” have nothing that identifies them against their competitors. Businesses with an identity that “stands out” can really wow customers. They display the complete package, and their identity is evident in everything, from the website, social media and print materials through to product placements, menus, team personality and the venue fit out and design as a whole.
8. Feedback and Assessment Systems
Check the business’ feedback and assessment system and see if it keeps employees and business practices on track. It should uncover weak spots that the business can address by revising its methods. Employees need feedback to let them know if they’re meeting their goals and performing well.
9. Community Involvement
A business’ character is defined by how it interacts with and gives back to the community. Take a look and see how the business interacts with its local community. Does it put on fundraisers or do the owners of the business donate their time or products to any local community events?
10. Customer Service
Providing customers with excellent customer service and building a loyal customer base is critical for a business’s ongoing success. See how the business handles concerns or complaints and make sure it addresses them fairly and quickly. The goal is to make your customers heard and help them feel appreciated.
Get a Business Appraisal from JBB
Would you like to see how well a business is doing before you buy it? If so, contact JBB at karli@justbusinessbrokers.com or call 0409 965 540 with any questions or to set up an appraisal today!
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