It is important to know the key success factors (KSF) of your business, as it will determine your success and potential growth. Business growth is only possible when it is competitive and financially successful. Therefore, we have to actively review our approach, competitive abilities and competencies continuously.
5 key success factors
According to the Total Success Center, there are five KSFs that any business needs to succeed:
- People – Those who make up the business.
- Purpose – The reason and strategic focus for working together.
- Processes – The activities people undertake to fulfill their purpose.
- Physical resources – The workplace, right equipment and money to pay the bills.
- Customers – People willing to pay money in return for the products/services rendered.
3 focus areas
There are three focus areas that anchor our business’s relevance: our customers, our competition and the environment in which we operate. A brief analysis of our customers should tell us who they are, what they want from us, what they purchase, and when and why they purchase. What do your competitors offer, and what is their pricing structure, their service and their perception of their offering?
Porter’s 5 Forces framework
This is a magic tool to examine our competitors. It analyses five forces that determine your competitive intensity and therefore the attractiveness of your business. It helps you to determine what you need to beat the threat of the following forces:
- The potential of new entrants to your industry.
- The bargaining power of your suppliers.
- The bargaining power of your customers.
- The threat of substitute products.
- The existing competition that you face.
We do not operate in a protected, artificial space. Internal and external factors in the global environment, which are out of our control, impact on our business. The PESTEL framework remains a reliable tool to analyse the macro-environment. Be honest and explore the impact of the following:
- P – Political matters, e.g., policies.
- E – Economic matters, e.g., the trends.
- S – Social matters, e.g., the trends.
- T – Technology – Are there new ways of doing things?
- E – Environment – How eco-friendly are our products/services?
- L – Legal matters, e.g., compliance and the cost and impact thereof.
Lastly, explore who your stakeholders are, what they expect from you, and how the business benefits from them. Your family, staff and the community are valuable stakeholders to consider in the sustainability of your business.
“Quality is never an accident; it is always the result of high intention, sincere effort, intelligent direction, and skillful execution; it represents the wise choice of many alternatives.” Will A. Foster
This is the fifth in a series of six articles dealing with managing your business growth from Betsy Ings, founder and managing director of Tradelane Training & Project Management. For more information, visit www.tradelane.co.za.
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The views and opinions expressed here belong to the author and do not necessarily reflect those of the YALI Network or the U.S. government. YALI Voices is a series of podcasts, videos and blog posts contributed by members of the YALI Network.