Businesses don’t last as long as they used to. According to studies performed at the Yale School of Management, the average company lasts several decades less today than it did in the 1920s. In addition, several companies just abandon their original business, either by choice or through acquisitions and mergers, to focus on different areas of business.
In a world where the average lifespan of businesses is significantly lower, here’s what you can do to build a business that will stand the test of time.
- Let innovation happen organically
- Build a fantastic work culture
- Don’t be fazed by setbacks
There’s a lot of power in new, fresh ideas. However, not every idea needs to be a completely new concept. Most successful ideas are variations of things that already exist. In addition, sometimes the market may not be ready for an innovative idea.
For example, Webvan and Kozmo were companies that offered on-demand delivery services long before the dotcom crash. Back then, customers weren’t as heavily reliant on the Internet as they are today, and e-commerce was less popular. As a result, both of these companies failed. Today, wildly successful companies like Uber and Instacart use a similar business model. Uber’s success in particular demonstrates the importance of executing an idea at the right time.
Your business idea is only as strong as the team you recruit to build and run it. Sure, you can use independent contractors to set up a business and turn a profit in the short-term. But, over time, more structured businesses can derail such companies.
To build a thriving business, you must assemble a great team and then ensure that they’re happy to work for you. A happy and motivated workforce will ensure more productivity and profits. According to latest estimates, employee turnover can cost companies a whopping $65,000.
It is in your best interest to keep your employees happy. Focus on creating a work culture which encourages innovation and collaboration. Establish clear lines of communication between employees and management. Look at companies like Twitter and Zappos for inspiration.
Success is a product of several different factors. Perseverance is one of the most important ones. As a business leader, you must stand firm in the face of obstacles so your team can rally behind you. Markets evolve and unexpected things might get in your way. A product launch might go wrong or a feature that you’ve worked really hard on might not be received well by your audience. The companies that make it through the tough times have leaders who are gritty and take failures in their stride. Failures provide you with opportunities to learn and grow.
The average lifespan for businesses is lower than it has ever been. But you can be on the right side of this statistic. By building your business on the three fundamental principles mentioned above, you give yourself the best chance to succeed.