The document identifies factors common among successful businesses and common failures of unsuccessful businesses based on a survey of over 1,000 Canadian firms. Successful businesses innovate often by offering new products/services, adopting new technologies, and improving processes. They seek outside advice, have solid long-term plans and metrics to track progress, hire and retain top talent by offering flexibility and engagement, and build strong supplier relationships. Common failures included over-reliance on few customers, poor financial management, lack of contingency planning, failing to adapt to market changes, and waiting too long to seek help when facing difficulties.

1. 1 Staying ahead of the pack
Staying ahead of the pack:
The essentials of good
business management
Pierre Cléroux, Chief Economist

2. 2 Staying ahead of the pack

3. 3 Staying ahead of the pack
5 Do’s
Identify factors that are
common to successful firms
> BDC/Neilson survey of
1,139 small and medium
firms across Canada
> “Most successful firms”
defined as the top 20%
of firms surveyed
> “All others” are
the remaining firms

4. Innovate–don’t rest
on your laurels

5. 5 Staying ahead of the pack
> The most successful
businesses offer new
products and services
more often
NEW!
Innovate–don’t rest
on your laurels

6. 6 Staying ahead of the pack
Innovate–don’t rest
on your laurels
> The most successful
businesses offer new
products and services
more often
> They adopt
new technology
more quickly

7. 7 Staying ahead of the pack
Innovate–don’t rest
on your laurels
> The most successful
businesses offer new
products and services
more often
> They adopt
new technology
more quickly
> They improve their
internal processes
and enhance
internal efficiency

8. Ask for outside advice

9. 9 Staying ahead of the pack
Ask for outside advice
Use of formal advisory mechanisms,
such as advisory boards and
consultants by successful businesses
34%

10. Have a solid plan and
measure your progress

11. 11 Staying ahead of the pack
Have a solid plan and
measure your progress
Have a medium-term business
plan with specific targets
70% 66%Reported having three or
more metrics in place

12. 12 Staying ahead of the pack
Have a solid plan and
measure your progress
Communicate
your plan
to your
employees

13. Hire the best and
keep them engaged

14. 14 Staying ahead of the pack
Hire the best and
keep them engaged
Are willing to take
several months longer
to hire the right person60%
34%

15. Go beyond financial
compensation ─
employees are also
looking for flexibility,
trust and the chance
to develop as part of
a team.

16. Kicking
Horse Coffee
■ Flexible work hours
and daily stretch
breaks for line
workers
■ Introduced official
fun days for
kayaking, skiing or
Christmas
celebrations

17. Build strong relationships
with your suppliers

18. 18 Staying ahead of the pack
Build strong relationships
with your suppliers
Supplier
relationships were
ranked by far
the most importantFelt supplier
relationships
were vital to
their success
1/3

19. 19 Staying ahead of the pack
5 Don’ts
Identify the most common
firm-specific factors and
events that led 118 firms to
become unsuccessful.
Average firm:
> $7.8 million in revenue
> 56 employees
> 24 years in business

20. Don’t rely on too
few customers

21. 21 Staying ahead of the pack
Don’t rely on too
few customers
Can you afford to lose your
biggest client?Q.

22. 22 Staying ahead of the pack
Nearly 1 in 6 firms
Don’t rely on too
few customers
that ran into difficulties did so
at least in part because they
lost a single major customer

23. The Mandala Group has
started to diversify its
client base by partnering
with smaller firms that it is
helping expand globally.

24. Don’t underestimate the
importance of effective
financial management

25. 25 Staying ahead of the pack
Do you know your cost of goods sold?
Do you have cash flow problems?Q.
Don’t underestimate the
importance of effective
financial management

26. 26 Staying ahead of the pack
Don’t underestimate the
importance of effective
financial management
The lack of financial management
expertise is probably the single
most-common factor that causes
successful firms to run into difficulties.

27. Bonté Foods
■ Restructured
operations after
severe cash flow
problems
■ Unloaded lower-
margin divisions,
narrowed focus
■ Better manage
receivables,
payables and
inventory

28. Don’t leave contingency
planning until it’s too late

29. 29 Staying ahead of the pack
Don’t leave contingency
planning until it’s too late
Could your business continue
to operate in the case of an
unforeseeable event?Q.

30. 30 Staying ahead of the pack
Don’t leave contingency
planning until it’s too late
Loss of
one or two
key employees
Increase
in the cost of
raw materials
Loss of
a unique
supplier
Natural
disasters
like a fire
or a flood

31. 31 Staying ahead of the pack
Don’t leave contingency
planning until it’s too late
You need a contingency plan!
of firms that encountered financial
difficulties reported unforeseeable
events as a common source
of problems30%

32. Don’t ignore what’s
happening in your market

33. 33 Staying ahead of the pack
What will your market
look like in 2, in 5 years?Q.
Don’t ignore what’s
happening in your market

34. 34 Staying ahead of the pack
Don’t ignore what’s
happening in your market
Failing to adapt to market changes
can cause even the most successful
businesses to fall behind

35. Don’t wait too long
to get help

36. 36 Staying ahead of the pack
Don’t wait too long
to get help
Reach out regularly to people
interested in the success of
your business
Q.

37. 37 Staying ahead of the pack
Don’t wait too long
to get help
In our sample, businesses that waited
had much lower chances of success

38. 38 Staying ahead of the pack
Thank you
BDC
BDC Entrepreneur
BDC_News
Follow us:
bdc.ca
@PierreCleroux
#EconoBDC