Statistics show that only one third of all the businesses which are started live beyond the 5-year mark. Longevity therefore needs to be a major focus of new business owners so that they can break the jinx of so many businesses failing in their infancy. But how can firms attain longevity when the odds are stacked heavily against them? We discuss some strategies through which you can build a company that will stand the test of time and be passed from one generation to the next while maintaining its industry leadership position.

Define your business destination

A good way to put your startup on a firm path to long-term success is by defining clearly where you see the company going. This destination needs to be distilled into a clear vision and mission which are communicated on an ongoing basis to your team and stakeholders.

The vision and mission shouldn’t just be words printed and displayed prominently throughout the business premises; they should be the drivers of everything done at the company so that it gets to a point where they define how the business operates, and its very identity.

This clarity of purpose will guide decision making and execution regardless of who the office bearer is, and that is how longevity is nurtured.

Have a willingness to adapt

If you had any doubts about how rapidly and drastically the business landscape can change, the recent pandemic jolted you awake and demonstrated how quickly epochal changes can occur. To build a business that lasts, an entrepreneur needs to be willing to adapt as and when a situation calls for such adaptability.

For example, you as an entrepreneur may be emotionally attached to a certain product and you think it will be a hit among your target customers. However, market research may show that it will not get the traction you expected and this is where adaptability is needed by way of reinventing that product or even abandoning it altogether in favor of others which stand a higher chance of getting market acceptance.

Adaptability is needed in various aspects of running a business, such as how you hire, which marketing channels you use, the technologies you take on, and so on.

Learn how to delegate

One man armies only succeed in the movies, as no entrepreneurial journey can succeed without a winning team. It is therefore imperative that you learn how to delegate different administrative duties to the members of your team.

Doing so will serve two key purposes. First, you will free up your time and be able to focus on the big picture aspects of the business, such as planning its next pivot or growth spurt. Secondly, as you delegate more and more tasks to your team, you will build their capacity to run the show while you aren’t around, and they will have an opportunity to put their superior (hopefully) skills to work for the benefit of the firm. Don’t be that entrepreneur who thinks only they can get things done!

Control growth

Did you know that uncontrolled growth can quickly kill a business? Yes, even growth has to be managed. For example, do you have a trusted team to run those extra outlets that you want to open for your business after the first outlet registers resounding success? Have you got sufficient cash reserves to pay for the extra payroll and overhead plus other costs associated with expanding the business? Is your production capacity and supply chain able to handle the added demand without compromising quality or customer satisfaction?

So many factors have to be considered before company growth is implemented, and ignoring those calculations or considerations can work against the longevity of your business. Think, plan, and then execute! Don’t let emotions control you as you grow your business. 

View mistakes as learning opportunities

Can the concepts of innovation and risk-taking be taken away from entrepreneurship? Definitely not; these are the hallmarks of entrepreneurship. Entrepreneurs imagine the world as they would like it to be and then take calculated risks to create products and services which bring that ideal to life.

Mistakes and failure are the price of innovation, and how you regard mistakes can determine whether your business will last or not. You can’t succeed if you don’t try, and there are no guarantees that anything or everything you try will succeed.

Let mistakes be learning opportunities and encourage your team to keep trying new things or finding new solutions. Rather than blaming individuals who make a mistake, work with them to identify why something didn’t work and how the lessons learned can be applied elsewhere or in other projects.

In this way, your enterprise will keep the pipeline of new products, services and solutions flowing instead of forever depending on the first products the business founder created.

Let the future guide your hiring decisions

When hiring new team members, don’t look at only the current needs of your business. Assess the medium term and long-term needs of the enterprise and find new hires who will steer the company into that desired future.

For example, when a trends analysis shows you that most businesses are going to operate largely online, don’t just hire employees who can market the business on social media or design cool ecommerce sites. Go beyond those basics and ask how technologies like artificial intelligence, virtual reality and augmented reality can be incorporated into your business. 

You can see that looking at things in that way will lead you to look out for advanced IT skills rather than the commonplace ability to run an online store.

Hiring for the future also means identifying employees who are adaptable, flexible and are always looking to improve things rather than those who are satisfied to do what they are told. You need change agents on your team if you are to attain longevity for the business.

Implement sound financial management systems

Let no one deceive you, a business without cash is simply counting the days to its death. Cash is the lifeblood of any enterprise, and a healthy cash flow goes a long way in easing a lot of things for that business. As Warren Buffett the billionaire investor says, the first rule of business is never lose money, and the second rule is remember the first rule about not losing money.

It is therefore important to design and implement sound financial systems that support the longevity of your business. For example, do you think businesses that had cash reserves which could support them for more than a year fared the same during the Covid-19 pandemic as those companies whose cash situation couldn’t keep them operating for three months?

Financial management is a weak link for many entrepreneurs, and that is where you need to get as much help as possible from experts like experienced accountants or a business coach in order to get a handle on how to design and use sound financial management systems in your business. If you don’t, you are flying blind and could crash at any time.

In summary, each of the strategies above can increase the odds of your business attaining longevity. However, when you combine several or all of those strategies, your business can truly be unstoppable! So, which of those strategies is your business struggling with and how do you plan to turn things around?

To Your Success,

Jairek Robbins