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Plan to Become a Successful Business

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When planning a new business or developing an existing one, it is useful to have a gut feel for the characteristics of a successful business. Here are some criteria against which to measure your business or its plan:

    1. Be sensibly financed (with prudent mix of equity and debt).
    2. Have a strong cash position (with access to follow-on or contingency funds).
    3. Offer above-average profitability (in terms of return on capital invested).
    4. Aim for rapid growth in revenues (with profits lagging but in prospect).
    5. Target expanding, or otherwise attractive, market segments.
    6. Develop a strong franchise or brand.
    7. Devote substantial resources to innovation (R&D, offerings or market).
    8. Compete on non-price issues (e.g. quality, service, functionality).
    9. Be very close to customers and responsive to their needs.
    10. Seek a specialist/leadership image with superior offerings.
    11. Be 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, for #1, a startup might decide to raise external equity and place minimal reliance on borrowings or an established business might set a limit of 50% on its projected debt/equity ratio. 

For more help on setting strategies, see Developing a Strategic Plan and Devising Business Strategies. Use the free Online Strategic Planner to create a 3-page strategic plan.

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This page contains a single entry by PlanWare published on July 6, 2011 4:06 PM.

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