Small Business Success Factors

Entrepreneurs usually go by the rule that only one-third of small businesses ever turn a profit, one-third break even and the rest lose money, according to Gaebler. By the four-year mark, about half of all small businesses fail. Successful small business owners have several factors in common, such as drive, creative and analytical thinking, technical expertise and people skills. Most of the time, its the entrepreneur who determines his own success.

Features

The U.S. Small Business Administration claims that five factors determine the success of a small business owner: drive, thinking ability, people skills, effective communication and technical ability, according to SCORE business counselor Ron Consolino. The drive to succeed is of the utmost importance because owning a small business means putting in extensive hours and a high level of stress. Thinking and reasoning skills are the second most critical factor. Business owners have to ask themselves if they are making rational decisions, do they need help and can they actually plan out their businesses strategically. Technical ability is a given because you must know your product to create your niche in the market.

Considerations

A 2009 study by the Kauffman Foundation, "The Making of a Successful Entrepreneur," asked proven entrepreneurs what it takes to make a business work. 73 percent said that luck plays a significant role. Sometimes, for example, you might happen to meet someone looking to invest in exactly the same type of niche industry as your business.

Misconceptions

Experience and education are essential to a small business because you must know your product, but you cannot rely on expertise alone, according to Entrepreneur.com. Many business owners do not know how they will generate sales or how they will market their product and build up their brand image. They assume that knowing their trade will carry them.

Other Factors

The type of business you start and its industry may determine whether your company has a viable future. First, you must have a passion for your small business because you will run into problems that will test your patience. More importantly, your industry should have good growth potential. Old technology like dial-up modems and VCR's, for example, are on the way out because of prevalence of broadband connections. Emerging technologies or businesses that require few employees to run have the most potential, according to Small Business Advocate Jim Blasingame.

Tips

You can affect many of the factors that go into a successful business. Make sure you save as much money as possible before starting your business. Even though most small businesses need less than $10,000 to start, 53 percent of entrepreneurs felt more capital could have made starting a small business easier, according to 2006 Wells Fargo survey. Create a business plan, even if it is brief, according to FindLaw. A well-thought-out business plan helps you find ways to generate sales and warns you of potential roadblocks.

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