I have a privileged role here at ABC Business Sales where we are directly involved in placing more than 400 people a year into business ownership. It is our job to appropriately match the right buyer with the right business so all parties achieve a successful outcome. There are some consistent personality traits we see from people who end up becoming very successful business owners. We have identified five of the most common and important traits required to run a successful business. (Highlighted below). This article also addresses the probability of running a successful business and examples of people who have left corporates to enter business ownership.
The most important & common trait of successful business owners is the ability to relate to people and build relationships; “People Skills”. Business owners all have customers, suppliers and staff and if you can build strong and long-lasting relationships with all these stakeholders the probability of operating a successful business is materially increased.
Drive supported by a structured approach is required to grow any business. Drive and structure are joint at the hip and can’t live without each other. The business owners need the drive and motivation to get up early, work the long hours and make the tough decisions but these traits need to be supported by structured goals & targets so all the extra work is channelled into the right areas at the right times. All of us know people who work hard and put the long hours in, but if its not in the right areas you get a sub-optimal result. In the world of business ownership, you don’t have the luxury of channelling work into the wrong areas; to be successful the hard work needs to be dedicated to the correct areas.
Budget and financially minded is something the most successful business owners have in spades; in today’s world business success is very much viewed in tandem with financial success. To achieve financial success and healthy profits business owners need to have a clear understanding of what their current position is and what actions are required to improve this position; hence you need to be able understand and interpreted basic financial statements (Profit & Loss & Balance Sheets). It is possible to employ people who have these skills, but if we are talking about the very best business owners, they are all very financially literate and it’s a skillset we believe is very important in today’s business world.
Resilience is a much talked about trait and one that is very common amongst the elite business owners. Business ownership is the most rewarding career you can have when everything is going well, but it can also be hugely disappointing when you experience setbacks. When you have the tough times and the setbacks it becomes personal and you have no one else to blame; unlike if you work for a big corporate when it’s always the “Companies” fault! The people who can accept failure and mistakes and have the ability to bounce back and come back stronger make fantastic business owners.
Confidence is a trait that is associated with a high volume of successful people across all types of industries; sports people, actors, musicians, business owners, politicians etc. The interesting aspect to confidence is the ability for it to spread through an organisation and the effect it has on staff morale and culture. Successful business owners all have confidence in their own ability and this allows them to make quick and definitive decisions which provides them with a competitive advantage.
The best aspect to becoming a business owner is there are no barriers to entry; there are no essential qualifications and if you have the right attributes and traits as per above the likelihood is you will be successful. Prior business experience is more important than any formal qualification but given the uniqueness of all businesses previous experiences are not as relevant as having the right character traits.
Recent examples of new business owners are we have had an Air NZ airline pilot buy an engraving business and two expat professionals buying a nursery. In both case previous work experience and qualifications were irrelevant and it was their ability to build relationships, work hard, deal with difficult situations and understanding the financial aspects of the business that has allowed them to prosper in the world of business ownership.
Here at ABC, we keep records of all of the businesses we sell and 98% of businesses we sell continue under new ownership; a small minority (2%) end up closing or get liquidated. The numbers are almost the reverse for new start ups where 90% of start ups fail in the first two years.
If you are a person who has the required traits for business ownership; don’t wait as it is the most financially and emotionally rewarding decision you will ever make in your working career. The probability of success is enhanced materially if you buy an existing business and if you have the required personality traits. I’m talking from experience as four years ago I was working at a bank on a salary and now I’m an owner and Managing Director of ABC Business Sales and it’s been the best career decision so far!