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New research finds what makes a business successful. Whilst there is a list of factors one thing in particular makes all the difference.
A paper just published this week in the Journal of Social and Development Sciences conducted a review of hundreds of previous research studies looking at the success factors of small businesses.
What the study found was that the three key areas which are critical for small business success:
The attributes of the entrepreneur:
- Resilience
- Interpersonal skills
- Communication skills
- Management skills
- Motivation
- Determination
- Decision making-skills, and
- The ability to be able to learn and un-learn rapidly (flexibility)
Attributes of the actual business:
- The learning capability of the business
- Innovation capability
- Strategic approach to management
- Customer orientation
- Efficient use of human resources
- Focus on a market niche
- Adequate financial and technological resources
External environmental orientation:
- Staying up-to-date and being able to deal with legal, political and economic changes.
The critical importance of change
Whilst numerically most of the factors centre around the attributes of the entrepreneur, they discovered that it was the agility of the enterprise as a whole in the face of change that underpins business success. There is central theme in all of the research of remaining observant and noticing what are called the ‘weak signals’ of change which enable businesses to embrace change, pivot and move with the continual changes occurring in the environment. These include technological, political and economic changes for example.
So as long as the factors and attributes of the entrepreneur and the business combine to create an agile, change aware process and business, they should be successful.
Personally I don’t think this just applies to small businesses.
Reference
Okreglicka, M. (2016). Key Factors of Small Business Success: Literature Review. Journal of Social and Development Sciences, 6(4), 30.
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2stitching
I really agree with everything in this article. The top 3 attributes that an entrepreneur should really have is in order for the small business to survive:
1 Resilience – in order stay strong when the business is going down. This is very important in assessing problems.
2. Interpersonal skills – talk to fellow entrepreneurs and ask for advice
3. Decision making – make wise decisions to solve those problems and put the advice to good use.
Hi Sam,
It is interesting research isn’t it. The communication skills also extends to communicating with team members and importantly customers as well.
I am glad you are finding our research briefings useful and interesting.
Regards
David