The 5 Critical Business Success Factors

There are five critically important core profit principles (success factors) that all businesses share - whether a small business or large.  Understanding these principles and incorporating them into your thinking can often make the difference between just getting by... or getting ahead. And, in times of crisis - they are essential.

Here, we'll explore what they are - and how you can put them to work for you in your own business. These principles form the basis for most success in business achieved by entrepreneurs, business owners, business managers, and professionals. Without following them at least to some extent, you'll find business to be a struggle - and much less rewarding than it could be.

As you read this, see how well your own thinking and actions in business stack up to these five core principles:

1) Profits are essential for your business to succeed - they are what pays you.

You don't have to look far to find examples of businesses imploding due to lack of profits. (Just look at the current banking and financial crisis... Or, remember the dot-com bubble?... the spend, spend, spend your way to market share type of thinking.) And, those are just some larger, more visible examples... small businesses are at even more risk.

Ultimately, profits are the essential key ingredient for business survival - and your focus on them is key. Your very business existence depends on a steady stream of profits to pay your bills... your salary... your employees... your vendors and suppliers... and to secure your financial future.

Profits make the difference between the success or failure of your enterprise. They are the fruits of your labor and the essence of why you're in business. Without profits (or deep pockets), you can't last long.

2) Most businesses miss profit opportunities on almost every transaction or customer/client relationship - and are limiting their incomes without even knowing it.

Here again, you won't have to look far for examples. Just think of all the leads that don't get proper follow-up, the customers/clients that receive only occasional communications (if any), the up-sells, cross-sells and add-on sales that could have been part of a given transaction, the unrealized intangible opportunities that exist in your customer/client or vendor/supplier relationships - and you can begin to see a sad pattern.

It's a pattern of profit opportunities gone by... wasted utilization of assets... or under-realized profit potential in your transactions. In many cases, business owners, managers and professionals are completely unaware of their lost profit opportunities.

Make your expenditure of time, energy, capital, and resources produce more for you - and capture the money that most businesses miss. Consider your advertising, marketing and sales efforts as a complete process - and design, test and implement transaction processes that harness your business strengths.

3) Stability and security comes from creating a "Web of Profits" in your business.

Do you have a number of different sources within your business to support you? Or, are you relying on only a few? Or, even worse, relying on only ONE primary source of profit?

The majority of businesses rely on fewer than five profit sources - and think in terms of "profit centers." In other words, a collection of different channels of profit from individual sales of products or services (retail), bulk sales (wholesale), joint ventures, ownership interests, licensing and/or other arrangements, and so on.

But, when you create a "Web of Profits" in your business - that is, an interconnected approach that integrates a variety of profit sources and activities together into a single unit of functionality - you stand a better chance of leveraging your business in new ways.

4) The focus on Increasing Profits is more beneficial than the focus on Cost-Cutting.

There are times of crisis or recession where cost-cutting is the only sane and logical choice. If you're bleeding... you stop the bleeding before anything else. But, when it comes to cost-cutting, the effect is temporary and fleeting. Once your expenses have been drastically reduced due to crisis cost-cutting, additional efforts could harm your business's ability to be effective or survive.

Crisis management aside, it's much better to focus on getting more business, to create new profit sources, run better promotions, do better advertising and marketing, and generally operate your business in a more customer/client oriented way.

That's what eases the pressure from high-costs... and provides you with what you need from your business. The thinking that goes into a profit-oriented focus and mindset can often provide innovative and inspirational breakthroughs in results.

5) Strategically plan for Profits - and take the specific action steps needed to implement your plan.

Being laser-focused on profits - rather than just being revenue-focused as a cornerstone of your strategic planning - takes you to the next level in your business plan. It allows you to see alternative profit opportunities - and the action steps needed - so you can build them directly into your plan.

Business plans by their very nature are bottom-line profit focused - but are usually just focused on the immediately obvious profit sources - not necessarily on the alternative profit possibilities.  And it's these alternative profits that most businesses miss... profits that could even eclipse what's being produced by your current business activities.

Often, the biggest difference between those who are able to implement new profit sources and those who aren't - is simply the willingness to identify what potential alternative profit sources exist... to prioritize the order in which you want to implement them... and to itemize the action steps needed. Then, of course, to simply get started - and systematically put them into practice in your business, one-by-one.

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