How do entrepreneurs take a startup company and turn it into a real success? There are many more ventures that have failed than ones which survived and became profitable. Here are some essential practices you’ll encounter in a lot of successful startups.
Know your strengths
Many startup founders today almost take it as a given that they will be wearing many hats. Until a business venture proves successful and they can start hiring people to fill in specialised roles, the typical entrepreneur will have to drum up PR for their product, conceive and execute marketing campaigns, do the accounting and taxes, and at least half a dozen other functions. All of these skills are required to some extent – and even among seasoned entrepreneurs, you won’t find many who are good at all of them. The opposite is true; these skills can be shortcomings for most business founders. Knowing their strengths – and playing to them – is what gets successful entrepreneurs over the hurdles. When resources are scant, and the venture hasn’t proven to be profitable yet, constantly realign your vision with your real domain expertise, and you’ll have a winning strategy.
Run the numbers backwards
In a five-year study, more than 4 in 5 failed startups founded in 2014 cited cash flow problems as the main reason behind their business failure. Given that almost the same proportion (80%) had survived to at least the second year, the problem may not be securing initial funding, but rather how soon the company can turn a steady profit. Run the numbers backwards at the outset, and you can avoid this problem by determining the correct price point. When you create a budget and factor in not just the cost of manufacturing, but also the cost of marketing campaigns and the services of an experienced delivery company in Singapore where same-day delivery is expected, you may find that your price point needs to be set higher to be profitable.
Work upwards for exposure
When you’re trying to introduce something new to the market, it’s vital to reach the people for whom it solves a problem or addresses a gap. But without access to a lot of funding, you need to work upwards. Take a page out of the typical crowdfunding playbook and offer special perks to early adopters of your product. Then you can target small online communities and social media influencers who’ll help get your product mentioned. From there, pursue small news sites and try to get written about in length. Eventually, this strategy of working up to get mentioned and featured will build you enough press coverage to help you reach your target audience without spending thousands of dollars.
Test as much as possible
Whether it’s a product, marketing strategy, or sales channel, you may start with a few different options which you could pursue, but no certainty of which one – if any – will work. The only consistent strategy for success is to test as much as possible. For example, before you commit to a prototype, try to create online listings for different product types and run analytics to see which one generates the most traffic. Double down and pursue the option that leads to the most success, and apply the same approach in testing other areas.
There’s always an element of risk in business, but these measures will increase consistency and minimise the risks of making errors which can be easily avoided.