When starting their businesses, a major concern for entrepreneurs is whether or not their companies will succeed. This can hinder them from taking chances, expanding or starting a company altogether.
While there isn’t a way to fully guarantee your business will do well, there are signs you can look for that might indicate you’re on the path to success. To that end, a panel of Young Entrepreneur Council members described these telltale signs and how to spot them in your own business.
Young Entrepreneur Council members discuss how to tell if your business will succeed.
Photos courtesy of the individual members.
1. You Respond To Challenges And Adversity Well
How you are responding to challenges and adversity is a huge factor in determining your future success. Once your response to a new challenge goes from “This will sink me if I mess it up” to “Why is this challenge happening, how do I overcome it and what can I learn from it?” then your business is out of the volatile early stages and has an opportunity to flourish. People really underestimate how much your initial reaction to adversity helps and hurts your business. In the infant stage of your business, there are infinite ways to fail and sink, but once you are off the ground, you need to respond positively to challenges in order to continue being successful. – Liam Leonard, DML Capital
2. You Have A Sustainable Competitive Advantage
You have to make sure you have a sustainable competitive advantage. Anyone can have a good idea and figure out a way to execute it. What’s important to establish is what makes your company different from others. Can a future competitor have better quality or do it faster, better, cheaper? If the answer is yes, this is something to consider. The concept of trade-offs comes heavily into play here. You have to decide what you can compromise on that wouldn’t affect your sustainable advantage, but would allow your company to compete in the marketplace. – Nic DeAngelo, Saint Investment Group
3. It’s Not Hard To Sell To Your Ideal Customer
If you have your most ideal customer in front of you, how hard do you have to sell them on your service or product? How much energy and time goes into trying to get them to buy, and will the perfect customer buy every time? If the answer to these is “no” or “it is difficult,” you need to rethink that target customer or you need to go back to the drawing board because your idea may not have much of a need in the marketplace. – Marjorie Adams, Fourlane
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4. You’re Able To Pivot When Needed
I have seen so many entrepreneurs who begin with one idea, but find that pivoting opens up more revenue. If you recognize flexibility, adaptability and the power to pivot in your business, you will be successful no matter what. Obviously, you have to commit to steering the ship through each pivot, but you will find a way to make your business work. You might find that a service you never thought you would perform earns you more than the product you first invented. Double down on the service. Don’t shackle yourself to one vision of how your business earns. – Tyler Bray, TK Trailer Parts
5. You Have Loyal Customers
A good sign is when you have customers who are genuinely enthusiastic and loyal about your products and services. Proof of this can be found in customer reviews, repeat business and comments customers make. It’s an especially good sign if people tell you they can’t get anything comparable elsewhere or that they feel they’re getting exceptional value. It’s important to solicit honest feedback at every stage of your business. Create polls, provide free samples in exchange for reviews and listen carefully to criticism as well as compliments. – Kalin Kassabov, ProTexting
6. You Have A Handle On Your Cash Flow
No business can survive without adequate cash flow, so this is a metric entrepreneurs should always be tracking. You could have a great business plan, a novel idea that consumers want and a fantastic team, but if you don’t have enough cash flow to keep the business going, you’ll fail. Therefore, work with a financial expert if finance isn’t your area of expertise and make sure you always have a clear understanding of where your business’s money is going, where it’s coming from and what your cash flow looks like at all times. – Jonathan Prichard, MattressInsider.com
7. Customers Recommend Your Business
You know you’re doing well when customers like your business enough to recommend it to friends. When you start hearing new customers say “So-and-so told me about you,” you know you’re doing something right. You need to continue doing what you’re doing and try to give the same attention to detail to your new customers as they keep coming in. – Syed Balkhi, WPBeginner
8. Your Key Sales Metrics Are Trending Upward
You can tell by your lead growth rate, rate of closure and returning customers. You want to make sure that your leads are growing steadily month to month and come from different sources. If you are tied to only one pipeline or one communication channel, then you will be screwed if something happens to it. You then want to see that you are able to convert your prospects into customers at a high enough rate. There’s no universal benchmark, as this metric depends largely on your vertical, deal size and so on, so comparing your rates to your own rates on similar deals a year ago can paint a sober picture of what your chances are as a business. It’s also not a secret that returning clients cost less to your business than new ones, so seeing an increase on that end is a great sign. – Daria Gonzalez, Wunderdogs
9. Your Market Is Growing Quickly
There is no single determining factor that will predict the success or failure of a business. You have to offer some underlying value, and then, step by step, create and test hypotheses in various aspects, from attraction to customer retention. But when it comes to factors, the most telling is the growth of the market in which you are going to operate. Market growth is more determinant of the success of a business startup than other factors (for example, the number of competitors or the amount of money in the market right now). The reason is simple: Growth attracts both new players and new investment. So your business startup has a better chance of finding its niche and making a shot. – Maksym Babych, SpdLoad
