There are multiple factors that directly influence the health and wealth of any given business venture. These factors may be diverse and different depending on the nature of the business. The Critical Success Factor, however, is common to virtually all business ventures.
The Critical Success Factor: Earn a Profit Solving Customer Problems Better than the Competition. It is do, or die. A venture dies for one of three reasons: 1] It didn't earn a profit; 2] It didn't solve its customer's problems; 3] It wasn't better than the competitive alternatives.
Earn a Profit Solving Customer Problems Better than the Competition ... The Critical Success Factor for all business ventures.
Critical ... having the potential to become disastrous
Success ... attains prosperity
Factor ... a circumstance that contributes to an outcome
* Earn ... Teamwork! A business employs a team of people working together to continually and profitably solve customer problems better than competing alternatives. Healthy, growing ventures follow a clear business model. An educated, experienced, collaborative, communicative team with key core competencies is paramount to success.
* Profit ... The monetary value captured by a business is appropriately called earnings. After all expenses are accounted, earnings become profit. Profit is a reward for doing a good job solving customer problems. A key source of growth funding for a business venture is earned profit. While the profit reward is "financial", the reward can and should have other elements, too. In a healthy venture culture it can actually be "fun" going to work and being part of the team, and their may well be some "fame" that results from delivering valued solutions to customers.
* Solving ... Solutions to customer problems are typically combinations of products, services, process, and methods. However, the world keeps changing as do customers and competitors. Solving customer problems, new and old, is a continuing process for sustaining a healthy venture.
* Customer ... Customers are the primary source of revenue for a business venture. Some business ventures may have only a few key customers, others may have many. A group of customers that share similar traits comprise a market segment. Many business ventures may serve multiple and varied market segments. A business venture exists to serve its customers.
* Problems ... Customer needs, wants, desires, and situations that can be adequately addressed and resolved in a reasonable time and expense are good opportunities for a business venture.
* Better ... Continually improving value is critical to sustaining a competitive advantage. Scientists and engineers often think about innovative solutions in terms of the fit, form, function, features, and performance. The entrepreneur thinks in terms of the benefits customers will receive. Value is measured by comparing the benefits to the price. Value can be increased by delivering better benefits to customers, by lowering the price, or both. Customers decide what offers the better value. In the long run, the products, services, processes, and methods that deliver a better value win the business. In short: Value = Benefits / Price
* Competition ... There is almost always competing solutions and ventures from other sources that are directly comparable. Other competition may be indirect alternatives, substitutes, and replacements that could serve customer requirements. There is always competition. However, competition is not always a bad thing ... competitors can help validate and build new markets, and sometimes competitors can become collaborative partners.
Accounting Advertising Advisor Analysis Balance Sheet Barriers to Entry Beachhead Benefits Better Books Brainstorming Brainwriting Budget Business Flow Business Model Cash Flow Commercialization Communications Competition Competitive Advantage Consultant Corporate Entrepreneurship Creativity Critical Success Factor Culture Customer Decisions Deploy Design Develop Differentiation DXpedition Earn Education Effectiveness Elevator Pitch Entrepreneur Entrepreneurship Environment Evolution Executive Summary Exercise Expertise Failure Finance Financial Objectives Flowchart Focus Funding GizmoGadget Glossary Habits Healthy Venture Hiring Hypothesis Ideas Ideation Income Statement Industry Industry Research Innovation Innovator Intellectual Property Intrapreneurship Invention Inventory Investor Iteration Knowledge Launch Leadership Lean Startup Learning Legal Luck Machines Management Manpower Market Research Marketing Marketing Brochure Material Media Mentor Methods Mindset Mission Mistakes Money Motivation Myths Name Niche Market OLLI Venture Operating Agreement Operations Opportunity Passion Patents People Planning Positioning Presentations Price Problems Process Flow Product Development Profit Progress Promotion Prototype Refine Research Resources Resume Return on Investment Roadmap Sales SCAMPER SCORE Scorecard Skills Slides Solution Development Solutions SPLUCK Start-up Stimulation Strategy Structure Success SWOTT Target Market Team Teamwork Technology Readiness Levels Terminology Thinking Tools Transformation TRL Validation Value Venture Venture Capital Venture Creation Venture Plan Vision Work Worth Writing