You may have heard some sobering statistics about the number of startups that survive long-term. Some people say a majority of businesses fail, and the truth is, many do eventually.
Data from the Bureau of Labor Statistics present a somewhat different picture. Of small businesses that were started in 2014, 56% survived into their fifth year. While that can be encouraging for entrepreneurs, it’s still essential to go into your venture prepared for success while anticipating challenges — from choosing the right marketing and IT services to securing proper funding. These tips will help get you started.
Have a Business Plan
A business plan outlines the future of your startup, touching on the necessary steps and activities your organization will undertake in the coming years. It also describes your vision and goals, identifying time frames, financial concerns, threats and opportunities, marketing, publicity, sales strategies, and so on.
It’s only natural that businesses with clear steps explaining how they intend to operate and earn money are more likely to succeed. With a plan in place, you’ll know what to do next, whether you’re making money immediately or finding difficulties.
Do Your Due Diligence
Market research is essential for getting your business off the ground. You need to know whether your idea is viable, as well as the competitors that already exist. Do your homework by gathering feedback from users and prospective clients. You should be making sure your product is meeting their wants and needs. Use surveys, focus groups, and other methods to gather data to inform your strategy and adjust your product or service as necessary.
It’s also important to make sure you’re not starting a business that’s too similar to another one that already exists. Unless you’re filling a hole in the market or doing something better than someone else, there’s no reason for people to turn to you over an established brand.
Fill a Need
As we’ve discussed, you need to be addressing a need somehow. So, what problem is it that you’re trying to solve? Focusing on a niche is probably the most effective way to go here. That way, you’ll be targeting a specific user base and can hone your product to serve the wants of that population. If you cast too wide a net and try to solve too many problems, you’re more likely to fall short.
Make Solid Investments
What equipment and personnel do you need right now, and how will they serve you in the future? Think about which employees are important to your success and will help you grow. You may opt to use IT staffing services for temporary assignments or as-needed projects right now, rather than employing a full-time team.
You might also outsource software development. Keep your staff lean while you’re starting out, focusing on core employees who meet the specific needs of your business. For example, you might have a marketing manager but not a marketing assistant.
By the same token, you may not want to invest in an ad campaign that appears on every subway car in New York City just yet. A smaller Facebook ad could be the way to go instead.
The amount of funding you should have will vary from business to business. The important thing is to secure resources that will help you meet your needs as a company. Common sources include:
• Angel investors
• People from your network, such as friends and business contacts
• Bank loans
• Venture capitalists
• Your personal savings
Networking is an important step not only for getting the word out about your burgeoning business but also for identifying potential investors. You should be attending industry and startup-focused events and meetups, asking for introductions to people who might be interested in investing in your startup and speaking with former colleagues, mentors, and associates.
Spread the word on social media and elsewhere — you never know who might come through for you.
Think About Scalability
How will your business grow? Consider its long-term potential and future. It can be helpful to set goals for expansion in terms of both profit and number of employees. Be careful about trying to move too quickly, though. It’s important to be realistic and not attempt to expand beyond your means right out of the gate. Don’t be too hard on yourself if you’re not able to meet your goals, though — many startups take time to become profitable and achieve their objectives.
Starting a business is a milestone. You may be realizing a long-held dream, after all. And while it requires a considerable amount of time, effort, and planning, there are some ways to move things along. These tips can serve as a guide for when you’re just getting your company off the ground, and you may want to return to them as you gain footing in your industry. Remember to be patient: nobody ever said being an entrepreneur was easy, but it can be very rewarding.