It is a well-known fact that most startups don’t make it past their first year. Some startups are typically doomed even before launching, which may be for several reasons. For instance, the products or services on offer may be redundant or they may not have a unique selling point that differentiates them from other startups in their niche.
Other startups fail simply due to making mistakes that could easily have been avoided with a little foresight. But things don’t have to be this way. Certain mistakes can easily be avoided simply by taking the time to learn from other founders’ mistakes and miscalculations.
But not to worry. Failure is a considerable aspect of running a business successfully. And while learning from other businesses is not the magic formula that will help you avoid blunders when launching and running your startup, it will make you think twice before you take any unnecessary risks that could put your business in jeopardy.
So to help you out, here are 5 things you should know if you are starting your next startup”
Carry Out Extensive Market Research
Carrying out market research is the most critical component of launching a startup. And yet, so few startups and businesses actually take the time to conduct extensive market research. Market research will involve finding out other startups that are already operating in your niche and how they got there.
Another big component of market research is understanding one’s target audience including their characteristics and preferences. To ensure sustained growth, a startup needs a plan for short-term growth and long term as well. This is where it is beneficial for startups to explore new horizons by assessing the best practices to guarantee success.
Doing extensive research before your launch date will help you determine whether your idea is feasible or not. It will also make sure that your pricing is competitive and that you get an adequate ROI.
A Business Plan is a Must
All businesses, whether small or large, need a plan. A well-formulated business plan is the backbone of every sound business strategy. It is only with a well-laid-out business strategy that a startup will completely establish itself within its niche.
A comprehensive business plan is how a startup lists all its goals, its management structure, and any other criteria for hiring staff and compensating them. A business plan is imperative because it also helps a startup with its budgeting. It is often said that most startups fail within a relatively short time owing to budget issues.
More importantly, a detailed business plan is what consequently helps startup founders seek investors. How can one convince investors to invest in a dream without a summary of how everything is going to work? A business plan serves as the footprint that helps others understand one’s dream and vision.
An Effective Marketing Strategy is Non-Negotiable
Marketing one’s startup haphazardly is definitely not the way to go. Marketing requires a strategy for it to work and it all starts with establishing a startup’s strategic position. Once a startup establishes its strategic position, it will then be so much easier to determine how it is that the startup should be targeting to sell to.
Every great marketing strategy consists of publishing high-quality content. When there are budget issues, content marketing can help a startup establish itself at a relatively low cost. The point of content marketing is to build a relationship with potential buyers and customers at scale.
Doing something as simple as educating oneself regarding the latest digital marketing trends and how to apply them to the startup can make all the difference in the world. one such great resource that contains an array of digital marketing resources and books is Digital Authority.
A Good Team
A good and reliable team is the bread and butter of any business according to Healthcare Weekly. Having the right team in place is what will determine whether a startup takes off, stagnates, or fails. Before a startup starts the recruiting process, it must pay careful consideration to each of the potential hires to determine if they will add value to the team or if they bring with them the right set of skills and attitude.
A startup needs a team that is just as passionate as the founders, if not more. That’s because employees aren’t just staff members. They are also advocates and brand ambassadors of sorts. As such, if they don’t believe fully in what a startup is doing, then how can they be the brand’s biggest advocates?
Proper Financial Management
Financial management is a crucial aspect of running any business successfully. At least 20% of startups fail within the first 6 months because they ran out of money. Another 13% fail because they are unable to secure the financing they need to make it to the long haul.
When a startup fails to get enough traction, which means that there is no market need for the business or service it offers, it consequently leads to the failure of that business. Most doomed financial decisions tend to be made in the early stages of a startup when the product is still in development and the business model still needs a bit of refining.
During the early stages, founders are encouraged to conserve cash. This means that there isn’t usually a need for hiring staff at this juncture. Sadly, though, a lot of businesses make this mistake which more often than not leads to unavailability of resources down the line, which causes the business to fail. So as you can see, financial management is extremely important particularly during the early stages of a startup.
Establishing and running a startup successfully is no small feat. So if you intend to launch the next big thing, take some time out to carry out a detailed market analysis to find out if there is a market for your business or product in the first place. This will go a long way in helping to avoid some of the common missteps made by failed startup founders.