The 3 Characteristics Successful Businesses Have in Common [White Paper]
September 30, 2015
The Path to Longevity Takes Much More Than Just Hard Work
Building a successful company takes much more than just hard work. Despite their best efforts, many businesses fail for a myriad of reasons. While there are many articles that focus on why companies fail, we would like to highlight how to attain business success.
Regardless of size and sector most healthy companies share three characteristics – the following Thomson Reuters article reviews these three characteristics that lay the foundation for business success.
The Three Characteristics:
1) Revenue Paving the Way: To determine how much revenue your company needs to be profitable, perform a profitability breakeven analysis. The Thomson Reuters article includes a sidebar called “Crunching the Numbers.” The results provide a baseline for setting revenue goals.
2) Production Costs in Check: For most companies, labor is their biggest production cost, particularly when benefits and taxes are factored into the equation. You need to ask whether your labor force increases the value of products or services enough to offset its high cost. If not, consider such solutions as providing more training or better incentives, improving production processes, or investing in more modern facilities.
3) Toward Leaner Operations: Operating expenses — costs you incur to run your business that aren’t directly attributable to production — also should be minimized. In addition, regularly revisit your R&D budget and the progress you’re making toward established goals. Are you squandering resources on projects unlikely to come to fruition? It may be time to redeploy resources.
Unfortunately, a company with strong revenues, low production costs and minimal operating expenses can still fail due to poor management decisions and other pitfalls. However, these three areas serve as ideal starting points for building a foundation for long-term success.
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