Small Business Advisors at Scotiabank learn from the thousands of small business start-ups we support every month across Canada. From this vantage point, we enjoy the benefit of a great perspective as to why some small businesses succeed while others struggle. It would be a stretch to suggest that there is some magic formula, but there are definitely some key attributes that tend to rise to the top for owners of successful businesses.
Successful businesses owners are “all in”
We don’t see it spelled out in any loan application, but there are certain attributes that characterize small business owners who spearhead successful enterprises: drive, passion, a sense of urgency and a willingness to work hard, among others. Strong businesses don’t just happen. They are the product of hours of research, planning, learning, trial and error. They are led by people who have the ability to take a calculated risk, as opposed to a flyer; people who are able to bounce back from failures and still keep a positive attitude; people who are willing to build strong relationships with advisors, suppliers, customers and employees. You can see it in their eyes. For these people, business is personal and they are “all in.”
Eyes wide open
When it comes to understanding what will make a business succeed, we usually see two types of business owners. On the one hand, there are those who are convinced they have a great business idea and just want to roll up their sleeves and get to it, come hell or high water. Then there are those who are convinced they have a great business idea and have carefully considered the market, their potential customers, competitors, and suppliers. They understand the fundamentals of the financial frameworks that will support their success and have a written business plan that lays out both the results of their research and their planned strategies, as well as a Plan “B” which covers the risks. While both types of business owners may succeed, the path to success for the business owner who has done the legwork to fully develop a plan will be much more assured. They are going in with their eyes wide open.
Rising above the crowd
I call it the “if you build it they will come” illusion. Business owners who have a realistic view of how their product or service will compete in the marketplace have the best chance of success. They know they will be up against competitors across the street and, in today’s web-enabled environment, potentially anywhere around the world. They have developed an understanding of what they need to do to create visibility for their new business, actively reach out and engage customers, actually close the sale and then build a long-term relationship where the customer will buy again. That’s entirely different than believing the attributes of your product and service, in and of themselves, will attract buyers. It’s the difference between believing “if I build it they will come” and planning how they will rise above the competitive crowd and drive sales.
It’s not a perfect world
In a perfect world, all our plans would unfold exactly as we predicted. Customers would press through the doors on opening day, all suppliers would deliver on time at the agreed price, and we would have all the money we need, when we need it. While nobody believes this is reality, it is surprising to see how many prospective business owners have not considered how they will respond when the road to success takes a bit of a detour. The best have a plan “B.” They have considered the three or four things that are fundamental to their business and have a backup plan they can resort to if needed: an alternate supplier in the wings; an emergency fund to cover that unplanned cash shortfall; a training plan to ensure a key person can be replaced in the event of an emergency. While there may be a natural reluctance for an optimist to consider the potential for a negative event, the best invest by planning for the reality that it’s not a perfect world.
For Scotiabank Small Business, there is nothing we enjoy more than supporting the success of business owners. Working with partners such as the Canadian Federation of Independent Business (CFIB) and CFIB’s My StartUp program members our coast-to- coast network of hundreds of Small Business Advisors offers our exclusive Running Start for business program.
We look forward to helping start-up businesses achieve their owners’ vision for success.
We understand that business is personal.