It’s not always easy keeping a young business alive. In fact, the U.S. Small Business Administration says only two-thirds of new businesses make it past two years, half make it at least four years, and only 40 percent survive for six years or more.
How do companies that survive succeed? Much of a company’s longevity has to do with the quality of the company’s founder and top-level management, according to studies by the research firm Gallup.
In a study of 2,500 entrepreneurs, Gallup found those who built companies that survived over the long term had several key characteristics in common.
A clear vision. They were more likely to clearly articulate the competitive advantage of their companies to their clients.
A close relationship with customers. They were more likely to make decisions about pricing, product or service development with their customers in mind. They maintained close relationships with their customers.
A plan for growth. They spent time planning for growth and aligning employee responsibilities with company goals. That practice maximized employee engagement and increased individual performance.
Gallup also found entrepreneurs who shared these characteristics were three times more likely to build large businesses and to grow them significantly. They were four times more likely to create jobs, four times more likely to exceed profit goals and five times more likely to exceed sales goals.