How do you judge the success of a small business? There are many ways to define success, and yet I believe that many small independent business entrepreneurs have a misconception of what it is to be successful. Not long ago, I was sitting in a Starbucks coffee shop talking to a small business owner who was bragging to me about how great his company was doing and the size he had grown his business. He was telling me how many employees he had.
Nevertheless, the true success of a business would be to have very little outgoing expenses, in other words very few employees, and having incredible productivity from the few employees it had, along with an awesome computer system, great machinery, and absolute efficiency in all other aspects of the business. Just because you have more employees in your business does not necessarily equate to having a profitable business.
Success in business, as far as I am concerned should be judged by the profits the business produces. And to produce a profit you have to deliver goods and services to consumers, customers, and clients that they wish and desire to have. And you must do so in such a way where you can retain a profit from each transaction, as those customers “vote with their dollar” for that which you provide. Far too many small business owners fall into the trap of growing their business and basing their success on the number of employees which they control.
Personally, if you want to brag about something you should be bragging about how much money you are making, with the fewest possible number of employees and how happy your customers are. Meaning you should lots of referrals, and plenty of repeat customers lining up for your products and services. Indeed, I hope you will please consider this.
Lance Winslow is a retired Founder of a Nationwide Franchise Chain, and now runs the Online Think Tank. Lance Winslow believes in small business to boost the economy.
