Working in the startup world involves learning not only from your own mistakes but also those of others’. The ultimate demise of new, cutting-edge start-ups is daily news here. According to the U.S. Small Business Administration, about half of all the startups in the U.S. fail within five years, and roughly 20% of them do not even make it a single year. Having said this, there are also businesses that survive and end up having success.
So, what differentiates the companies that succeed from those that fall flat? You need to spot the lessons so that you may not make the same blunders while pursuing your venture. Fortunately, there is a plethora of business wisdom from experts in the field that can ensure a painless start-up journey.
Here are some tips that can help you avoid some common mistakes that entrepreneurs make, and ensure start-up Success.
Start with ‘Why’:
This also makes the title for Simon Sinek’s book “Start with Why”, which is a highly recommended book for businesses and leadership. Successful startups clearly articulate why they are in the particular business beyond making a profit. Rather than just being able to describe what you do and how you do it, you should constantly refine your ideas as you move on with the company. Even after setting up a company, you should constantly question yourself, ‘why you do what you do?’ Because you cannot succeed in something if your heart is not in it.
Early motivation and enthusiasm are great, but it should better be fused with some prudence. Taking a cautious approach in the start rather than rushing into the market without recognizing and being fully aware of your product can give your business a good first impression.
The most important measure of success in business is whether or not your product or service meets the market need. You can have a product that is highly imaginative, but if it doesn’t meet the need of the customers, it won’t have a healthy market. It is cited as the most common reason for startups failure by the data analytics firm CB Insights. You have to identify the needs of your customer and offer a product or service that solves a problem in a better way than your competitors.
Cash flow management:
One of the biggest factors in stumbling and falling of a startup is poor cash flow management. According to CB Insights, running out of cash makes the second most common reason for startups failure. You need to know about your inflows and outflows to avoid putting your business in a dangerous position. After all, any idea no matter how good it sounds is useless when you do not have the money to implement it.
Put the right team in place:
It’s important to get comfortable with the truth that you cannot do everything yourself. You will have a tremendous amount of responsibilities, and you need the right individuals who can assist you with your work. Failing to put a right team in place is cited as the third most common reason for startup failure by CB Insights. Therefore, to reach your ultimate goals, it is critical to surround yourself with supportive people who share your vision and are willing to help you achieve your goals.
Building a successful startup comes with some challenges, and to navigate through those challenges, you need the right mentors. The Small Firms Economic Development Initiative noted that 70 percent of small businesses that receive mentoring survive more than five years. This figure is double the rate of businesses that do not receive any mentorship.
Nothing comes free of cost in today’s world. You either pay with your money or your time. Poor management of time can make you miss your timeline which can have terrible repercussions for your business. Your time has a monetary value to it, so take it into consideration before planning your schedule. It is prudent to make use of sales pipeline templates, and productivity apps and services like those offered by salesmate to timely manage the complex processes of your business. Timing is, after all, everything in sales.
Engage your customers:
The key to successful businesses is to form a relationship with your customer. Building customer loyalty and happiness require time, but it pays you in the long run. Social media is a good option to connect to your customers quickly and informally. Encourage customers to share concerns and questions they have about the product and try to react to them promptly. Engage in discussions and learn about the positive and negative aspects of your product.
Analyze the competition:
Analyze the players who will compete with your product or service in the market. There are direct and indirect competitors in the market but don’t let them put you off. It is a measure that you are onto something and can act as a driving force for improvement. Lack of competition, on the other hand, can make you passive and dauntless.
Protect your intellectual property:
Intellectual property is the most valuable asset you have right from the start of your business. Identify and protect it to save yourself from potential legal fights that can cost you both time and money.
Develop a road map:
No matter the size of your business, as an entrepreneur you have got some goals and a plan to achieve them. Don’t entirely depend on a business plan to achieve growth; instead, implement a business road map and align your entire organization on every team’s efforts to grow the business.
“Be flexible, but stick to your principles,” so says Eleanor Roosevelt.
A lot of startups become extinct due to lack of flexibility. Be ready to adapt and change when customer feedback dictates you do so. Constantly analyze the market, and embrace changes accordingly. Changes that promise to help you deliver a better product or service and expand your market shall be adopted instead of sticking to the mindset which once kept your startup company afloat. Stay loyal to your idea only if you are sure there is market demand for it.