Running a healthy small business is no easy feat. According to data from the U.S. Bureau of Labor Statistics,around 50% of U.S. businesses failin their first five years, while 65% go under within ten years.
That said, most people go into business with a positive mindset. So how do you know if you’re set up for success? Here are 13 signs of a successful small business.
What is a successful business?
What defines a successful business depends on a number of factors. No two companies are exactly alike, and “success” can look different for every organization.
For publicly traded companies, it’s often measured by maximizing shareholder value. For smaller businesses, it might look like generating steadycash flow, maintaining profitability, and having the means to hire a skilled team.
Bottom line? Your business’ version of thriving might look different from your competitor’s. Still, there are some key signs that indicate your business is a success.
1. Your company earns money while you’re on vacation
When your business makes money while you’re out of office, it’s a sign you’ve built a viable company.
“I felt my business was a success when I was able to go on a vacation – a real one, unplugged and everything – without having to worry,” explains Scott Lieberman, founder ofTouchdown Money. “This meant my business was in a good position and, most importantly, had a strong and responsible team in place.”
2. Your website gets plenty of search traffic
When your business ranks for certain keywords, it can bring in significant traffic and revenue. That lets yourideal customeror client find you, and it’s a big shift for a small business.
“We run an online magazine, and our aim is to build a large email list, which we use to deliver personalized messages to our customers’ inboxes and encourage them to return to our website,” shares Logan Nguyen, co-founder ofNCHC.
As Nguyen saw a significant uptick in email subscriptions, website visitor numbers also spiked.
3. Customers sing your praises
Another way to tell your business is on the right road? Customers are eager to sing your praises and leave positive reviews.
“We were bombarded by positive feedback and testimonials from satisfied clients, which we used to benchmark our success,” explains Jonathan Ayala, founder ofHudson Condos. “These positive affirmations acted as a sort of social proof, which helped to reinforce our reputation as providers of credible, reliable business and instill confidence in potential clients.”
4. Clients find you
It’s a big moment for your business when clients you’ve never contacted start finding you. It means what you’re doing is working, and your company is displaying healthy signs of growth.
“Clients started coming to us on a consistent basis due to them ‘seeing us everywhere’ – online, in print, and in person – in addition to steady referrals from strategic partners and happy existing clients,” explains Marie Swift, president and CEO ofImpact Communications, Inc.
That consistent flow of new clients helped Swift hire more staff, add new leaders, and reserve liquid capital to prepare for future revenue fluctuations.
5. Imitators pop up
It's likely you’ve made an impact when other companies start popping up to imitate and compete with your own.
“[We knew we were a success] when we saw other products being created specifically to compete with us,” explain Elizabeth Dodson and John Bodrozic, co-founders ofHomeZada. “While these initial platforms weren’t as robust, we did take it as a compliment, since imitation is the greatest form of flattery.”
6. Customers refer you
Customer referrals can be the ultimate prize for small-business owners. With referrals, every happy customer can turn into five happy customers, allowing your business to grow exponentially without the massive marketing budget.
“Our previous clients were not only returning to us for their next books, but also recommending us to their networks,” shares Vikrant Shaurya, Founder ofAuthors on Mission. “This word-of-mouth growth is a testament to the quality of our work and our commitment to our clients.”
7. You bounce back
Having a thriving business doesn’t mean you’ll necessarily be profitable at all times. You may even have financial low points. But being able to bounce back can signal success.
“I launched VIQU in 2014 with a loan from the bank and my home as collateral," says Matt Collingwood, Managing Director ofVIQU. "In the early days, as with most startups, we made a loss. As each month ticked by, the losses increased. After 18 months of hard work and staying true to our goals, we eventually reached the break-even point. For established business owners, breaking even isn’t anything to celebrate, but at the time, it was my biggest success for the business.”
8. The media notices you
Media attention can help get the word out about your offerings and introduce you to new audiences.
“I woke up one morning to a flood of orders on my, at the time, almost non-existent website,” says Dr. Jenny Woo, founder and CEO ofMind Brain Emotion.“My products also shot up to #1 New Release onAmazon, and I had a merchandiser at a localBarnes & Nobleemail me about getting my card decks. Lo and behold, I realized my cards were featured inThe Harvard Gazette, the official Harvard University publication.”
As a result, her cards were also featured on two news stations, further increasing demand. It was a sign her business was really onto something.
9. Partnerships elevate your status
The right partnerships elevate your status and signal to potential clients that your business is one to watch.
“Our partnerships and collaborations played a significant role in showcasing our success,” says Jon Morgan, CEO ofVenture Smarter. “We formed strategic alliances with key industry players, government agencies, and academic institutions. These partnerships not only provided us with access to new markets and resources but also validated the value and credibility of our business.”
10. You achieve positive cash flow
Without proper cash flow, it’s tough for any business to survive, much less thrive. Even the best product and team in the market won’t save your business if there’s not enough cash coming in.
Achieving positive cash flow – having more money coming in than going out – is a good sign that your business is on the right path.
“In my experience, this achievement makes it possible to assure employees of their job security and contentment. Furthermore, it allows existing businesses to expand their operations and spread their products and services to other areas,” says Raymond Quisumbing, a registered financial planner atBizReport.
11. You’re recognized as a leader in your field
When you start to gain personal recognition as a leader, it shows your business is leveling up. That might mean winning awards, being invited to speak on a panel, or adding expert commentary to relevant thought leadership articles.
“It's one thing to start your business but quite another to see it grow quickly in unexpected ways [like] being invited to speak globally,” says Neelam Tewar, founder ofMaven Magpie Consulting, who has run training and seminars all over the world. “This has always felt like an entirely different flavor of success, rooted in uncovering a deep purpose I've had the privilege of building on over the years, without chasing or having to be loud on the internet.”
12. You have loyal customers
Repeat customers are the bread and butter of small businesses, ensuring consistent cash flow for months to come.
“We were a very new brand, so every new customer was prized and valued," says David M. Burrows, co-founder ofHivessence. "But what we also saw was almost 20% of them coming back to reorder previously purchased or new products. This meant increasing revenues, plus validating which products customers liked. It also meant lower cost on customer acquisition.”
13. Your business goes global
Whether you ship products to international customers, hire a global team, or attract clients from all over the world,going internationalcan show your business is resonating far and wide.
“The biggest sign my digital marketing agency was a success was when I started getting requests from international clients,” says Casey Jones, founder and CEO ofCJ&CO. “For me, this transformation from an Australian company to a global company that is culturally diverse and inclusive means success in every sense."
The Takeaway
While there's no set formula for small business success, these key moments can help build out your route to a successful, sustainable business. Take a pause to celebrate each milestone with your team.
A version of this article was originally published on February 21, 2012.
Images: Getty
