If the business equivalent of Simon Cowell came across your company, would he think it had the X-factor? Chris Barling examines the key drivers behind a successful business.
For every business that succeeds, there are many more that fail. While some people attribute this to luck, some people seem to be lucky over and over again.
So it’s interesting to ask if there is such a thing as the business X-Factor, and if so, how do you know if you’ve got it?
Practice makes perfect
In his best seller, Outliers, Malcom Gladwell explains that talent is a necessary, but not sufficient requirement for success on its own. Years of effort are also required and ten thousand hours of practice seem necessary to achieve world class performance. This principle is epitomised by the golf legend Gary Player who famously said “the more I practise, the luckier I get”.
We may think that Ronaldo could bend the ball with natural talent, but he spent a large part of his childhood practising. In fact, when Alex Ferguson was asked for Ronaldo’s secret, he said that “the important thing is practice”. It turns out that Bill Gates did a vast amount of programming – in fact around the magical ten thousand hours - before he hit the big time. The list goes on.
Business is no different, and hard work in gaining the right knowledge and skills is crucial. Luck also plays a big part, being in the right place at the right time, but that won’t do any good if you haven’t put in the graft.
I come from an IT background. But before I started my business, Actinic, I made sure that I had studied sales and marketing extensively and had been involved in running businesses at board level for several years. In other words, I tried to practice first.
Profit is oxygen
Some people start a business because they want to get rich, others want to change the world, no one wants to fail. To succeed in businesses you have to make a profit. Profit is oxygen, and is necessary even if the principle objective isn’t about money. No profit means no reserves which means that the slightest setback kills you. So forget the X Factor if you haven’t set profitability as an early objective – you won’t be around to find out whether you’ve got it or not.
Having a compass
To arrive at your destination, you need to know where you are going. Occasionally a business succeeds by accident, but that’s unusual. You must create a plan which gets to your objective. So spend time working out who are your customers, what you are going to provide, what they will pay and how you will market. Then you need to understand your costs and find out what the competition is doing.
Simon and Amanda Walker run Cult Pens
, an online store selling specialist pens. They realised that to satisfy their target customer’s desires, they would have to provide a massive range. So they offer the “widest choice of pens on the planet”, currently over 6,000. . They knew what was required; they set out a plan to get there; and now they have a booming business. Job done.
My company had a customer who grew his business from nothing to £23m in a few years. Talking to founder Steve Hanbury recently, I was reminded of his total commitment to customer service and value. Customers pay the wages; if we forget this we’re in trouble. All successful businesses need to centre on their customers.
The newspapers take great delight in recounting stories about hapless travellers whose satnavs took them up a track, across a river or over a cliff. They thought they had the route cracked. It’s is no different in business, when disaster is imminent it’s critical to be flexible.
It’s also important to be flexible if you see a great opportunity. Going back to a previous example, the Walkers stumbled across the idea for Cult Pens when they were running a stationery shop in sleepy South Devon. They noticed that some visiting holidaymakers looked around their store to see if they had any unusual pens. They didn’t dismiss the idea because it wasn’t their current business. Instead they grabbed the opportunity with both hands.
Fun makes good business sense
If we find something enjoyable, we are generally good at it. Starting a business takes a lot of energy, and it is much easier to focus on an area where you have some expertise and interest. These are the same areas where we are likely to exhibit the X-Factor. If we are exceptional at something, we are very likely to enjoy it. So try to find a business you will enjoy, it makes sense on every front.
I wonder if any of this comes naturally? Concentrating on customers, having a plan yet being flexible enough to change it and enjoying the whole process is a tall order. Is this the business X-Factor?
If you watch the ITV show you know that the truly talented are sometimes hesitant about their capabilities. The crazy ones often come with the most certainty and the least talent. The best ones always want to improve, and maybe that’s it. The X-Factor could be a commitment to listen to advice, practise and continually improve. It could be that’s what really matters.
Chris Barling is CEO of ecommerce supplier, Actinic