The 10 squared principle seeks to identify specific traits that appear to apply to successful businesses.
1) Richard Branson Factor
You should never be part of the operational team – ever! (Even if a train driver is off ill, you never see Richard B step in to take over!). The same principle applies here – you are the business owner.
Work on it, not in it.
2) A recurring income stream
Have one or more recurring revenue streams built into the business model. One-off sales should not form a core of your business. Aim for 50%+ of the income to be of a contractual recurring nature.
3) The service / product offering should be well established or known
Trying to educate the marketplace on a new product or service can be very expensive. Stick to what is already known and well established.
Just execute better.
4) The business model should be high-touch
If the business model could be outsourced to offshore centres, it should be avoided.
5) If it “puffs your chest” then it should be a “no”
Vanity projects are normally expensive and destined for failure.
6) It should not rely on government policy or specific laws
These can change in an instant. You want a business for the long-term.
7) No long sales cycles
High value B2B sales can drain your cashflow as deals can take an age to complete. Smaller, cash intensive services / products via regular transactions are better.
8) Minimal specialist expertise needed
Trainable to staff (locally) so no need to suffer from limited resource pool and specialist (spiraling) wages.
9) Doesn’t have to be your startup
It could be the acquisition of an existing business that just needs to execute better (just so long as they adhere to these principles and the price is right!)
10) Make appreciable improvements day-in-day-out
The small things count if applied and compounded day after day.
Please let me know if you think I’ve missed any hidden success factors…