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Rabu, 15 April 2009

Characteristics of Successful Businesses

A successful emerging growth business is likely to display many of the following characteristics:

  1. Sensibly financed (with prudent mix of equity and debt).
  2. Strong cash position (with access to follow-on or contingency funds).
  3. Offers above-average profitability (in terms of return on capital invested).
  4. Aims for rapid growth in revenues (with profits lagging but in prospect).
  5. Targets expanding, or otherwise attractive, market segments.
  6. Develops a strong franchise or brand.
  7. Devotes substantial resources to innovation (R&D, offerings or market).
  8. Competes on non-price issues (e.g. quality, service, functionality).
  9. Very close to customers and responsive to their needs.
  10. Seeks specialist/leadership image with superior offerings.
  11. Well managed with high-grade staff & good people-management.

Behind every characteristic there should be an explicit strategy designed to increase the chances of success and not simply aimed at reducing the likelihood of failure. For example:

  • A growth business needs a cash war chest and not merely "adequate" debt facilities.
  • Likewise, its management team must have the capacity to manage the present business as well as its growth.

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