It is one that...
-the owner is passionate about
-solves a huge problem for a large enough group of people
-for a good profit
-over a long time
-and most importantly allows the owner to live the lifestyle he/she DESIRES
-in a legal and honest way
And that for me definitely works out.
As Peter F. Drucker put it, the purpose of a business is to create new customers.
As Warren Buffet sees it, a great business is one that has a consumer monopoly, a strong track record of earning, has a healthy return on equity, has the ability to retain earnings, has a low cash to debt ratio, and the ability to increase prices during inflation without risk of losing customers or eroding margins.
Merge both opinions and that is my answer.
Per Ken Larson, A SCORE Mentor, a successful small business is one that ...
1. Does not promise what it cannot deliver
2. Does not overextend its resources and get a reputation for poor performance.
3. Does not tell the customer what he or she wants to hear. Tells them what they need to know and is respected for it.
4. Is prepared to provide information, samples and valuable service gratis as a marketing tool. Introduces itself and then immediately engages the client with presentation tools available to bring expertise to whatever topic interests the customer. Lets the client take them where they want to go with their concerns and their needs. Applies presentation tools and expertise dynamically on the fly in a sincere manner to those concerns and needs and as a result is in demand for follow up business.
5. Quotes and bills what the client can afford and grows with the customer (in content and resources).
6. Is dedicated to working itself out of a job with a specific customer and having the client take over by training him. Is remembered by that client, who recommends the business to 10 others.
7. Remembers that growth is a function of persistence and foresight. Knows where the market is headed and gets their first - then writes and speak about success indirectly by helping others. Demonstrates humility and a satisfaction in helping others succeed, whereupon the client finds ways to give the business credit. Knows there are ways of tooting a horn without making peoples' lights go out.
8. Word of mouth advertising from pleased clients is a sure ticket to success.