— July 19, 2018
If you’ve ever been advised to, “shoot for the moon, because even if you miss, you’ll land among the stars!” be sure to say thank you for the worthless platitude. A business philosophy based on the idea that if you are working as hard as you can, you are living up to your potential can be just as harmful as having a lazy outlook. What is your metric of success?
Even when numbers look good, businesses need to apply other measures of whether they are hitting their targets and achieving a successful liftoff. Here are three solid indicators that your new business will succeed.
Your reputation is coming from users, not media hype
Marketing can go a long way. In fact, when a promotional campaign is done well, a product or service may end up achieving an unwarranted reputation before it’s even released. Once consumers are interacting with a product, they no longer care what it’s makers claim about it. They want to hear it from each other. When a new device or social media platform gains cultural traction, it is the users who are introducing it to each other and even teaching one another how to use it. Don’t rely on sales reports alone. If users are sharing your product with each other, find out why. What are you giving them that they don’t see in the competition? If you can identify that “it” factor, you may be able to exploit it further.
You’re watching your burn rate
Confidence is a wonderful thing if you can get the dosage right. Initial growth is a volatile period and achieving positive numbers early on can be deceiving. If you’re encouraging the rapid growth of your business because early sales were positive, you may be setting yourself up for failure. There is a more important question than whether you’re making sales. Are you spending more or less than you’re taking in? If a business is booming and growth is coming with it, are you still putting more cash in to cover your overhead than you’re making in profit? If so, slow down. All the positive hype in the world won’t keep your staff employed if you go cash-broke overnight. Successful businesses manage their growth strategy by watching their burn rate. Remember to walk before you run.
Your turnover is low
Word gets around. The worst indictments against a growing business come from ex-employees. Regardless of your current success on paper, a relatively high turn-over rate will be a red flag to consumers, investors, and prospective employees alike that this environment is not stable.
On the other hand, a strong retention rate will lead to a different narrative. The employees there must be happy right? The must-have “bought-in” to the mission, content with their salary and work environment. Otherwise, they would leave, right? With a solid team in place, trust will only grow and the vibe will stay positive. Take care of staff morale so your staff takes care of you.