Business success is never guaranteed, no matter how better your mousetrap is. There is no magic formula to ensure your startup will be around ten years from now, never mind a year or even one month. * But you wouldn't be an entrepreneur if you didn't give it your best shot. * To point you in the right direction we've uncovered, with help from some successful Utah businesses, a handful of tried-and-true tools that, when used properly, give any good business idea a fighting chance to not only survive but thrive. * Lasting dynasties often have small beginnings, but are not built by accident. They are the result of a series of sound decisions guided by long-range perspective. * Utah companies such as OC Tanner, Zions Bank, Sinclair Oil, Flying J and Management and Training Company have stood the test of time, building a brand, relevance and performance that have spanned successive generations. * Creating such a company is not a linear, static process. Rather, it is an ongoing, interactive, synchronous evolution in a dynamic marketplace. * Enduring companies are established on a foundation of inter-related components: idea; leadership; business model; structure; supporting infrastructure; and leverage. * In this feature, Utah Business examines the elements of a successful business, illustrated by the experiences of three Utah companies; IMCentric, Tahitian Noni International and Wing Enterprises.
UTAH'S ENTREPRENEURIAL ENVIRONMENT
Utah has a rich tradition of entrepreneurial innovation, and remains a national leader for entrepreneurship. In October 2003, Inc. magazine ranked Utah the top state and Provo the top city in the nation for entrepreneurial activity, based on the number of Inc. 500 Fastest-Growing Companies per capita. Entrepreneur magazine ranked Provo third among the nation's mid-size cities and Salt Lake City/Ogden fifth among metropolitan areas for the best cities in which to be an entrepreneur in 2003. The National Association of Women Business Owners has ranked Salt Lake/Ogden the leading metropolitan area in the growth of privately held women-owned businesses for the past two years.
Yet Utah is also a leader in several less desirable characteristics: it tops the nation in personal bankruptcy, and ranks near the bottom for business survival rates. Many companies in the state are set up in a manner analogous to the tape-recorded message at the beginning of the old Mission Impossible episodes: "This company will self-destruct in one year. Good luck, Entrepreneur."
"The reason we have such a high business failure and personal bankruptcy rate in Utah is that people fail to plan and capitalize properly," says Steve Price, assistant district director for economic development at the U.S. Small Business Administration's Utah offices.
Of the Utah companies not falling prey to business failure or bankruptcy, many sell themselves prematurely, or at a fraction of their value--either due to lack of capital or because the founders and shareholders don't recognize the company's true value or potential.
How do Utah companies reverse these undesirable trends, while maintaining their entrepreneurial focus and vitality? "We have a great entrepreneurial culture here," says Price. "We just need the business awareness to catch up with the enthusiasm and ideas before people mortgage their homes and put their life savings on the line for business ideas that aren't fully baked or capitalized."
Price emphasizes that entrepreneurs need to have a clear understanding of the market they plan to serve, their value proposition to that market, and at least a two-year detailed financial and operational plan.
There are three fundamental questions any startup needs to answer in the affirmative to have a chance at lasting success:
Is it a business? In other words, do you have products or services for which enough people will pay you enough money in order for you to achieve a net profit? If not, your idea may be a diverting hobby or a worthy charity, but it's not a business.
Can you keep it? If you do in fact have a profitable business, can you sustain a competitive advantage? Do you have the legal protections, operational efficiency, competency and uniqueness to prevent others from stealing, duplicating or replacing your products or services in the marketplace? If so, you have the potential to be a viable concern. Otherwise, your company will likely be a one-hit wonder.
Can you do it? Do you have the people and pieces in place to effectively execute your plan? Do you have the combination of flexibility and consistency to adapt to changing market opportunities and threats, while maintaining the discipline to recognize and exploit your core...