The people at E-Myth Worldwide have just produced their State of the Business Owner report (SOBO) for 2014.
This looked at the specifics that determined success among the 4000 business that took part, mapping them against input from business sale brokers who were able to see links between the high value, profitable companies that they sold and certain characteristics.
Here is a quick summary of the key points:
1. The best predictor of how quickly a company would grow is by how much time the business owner personally spent on marketing and sales for the company.
Those who spent at least 40% of their time on marketing and sales for their companies grew their revenue 60% faster than those that did not, and they grew their profits at an even faster rate.
2. The more a business owner believes he/she can control the future, the less it is true. To believe you can control everything yourself is a major occupational hazard for entrepreneurs. Their overconfidence meant that they had much less profitable businesses than those who were more cautious and more open to reading signs about changes in the market, in technology etc.
3. When asked what were the best and worst decisions made in the past year the answer was clearly those related to personnel and hiring and firing. The most important factor was that the owner believed that their team’s ability to generate innovative ideas was a competitive advantage.
4. One factor that better predicts success than any other is having owned at least one business before their current business. Second time around, business owners were far more likely to be entrepreneurial and to professionalize the business, put great systems in place etc.
5. The “Expert Entrepreneurs” had a clear idea of how they all fit together their “Framework” for their business, based around 3 areas: vision, unifying sales and marketing efforts and identifying the most profitable clients.
Please post a comment or let me know if you agree with these findings.
For a full copy of the SOBO report, click here