A startup's chances of survival are daunting at best. Nine out of 10 startups fail in their first year. Failure is so common, in fact, that many entrepreneurs have taken to writing post-mortem failures to pinpoint where things went wrong, hoping that others would learn from their mistakes.
Related: 10 things successful people will never do again
Despite the odds, we keep going. Maybe it's for the love of the business. Perhaps it is the desire to create something that belongs to us. But it is also because we believe that we will be part of the 10% who succeed. There is always a need for businesses that are innovative and responsive to customer needs, and we're sure we've got what it takes.
Do you have the chops to lay your business on the back? After creating my startup Owlmetrics, an Instagram analytics tool, I realized that there are 10 hurdles every startup must overcome to be successful. Here's your chance to figure out your weaknesses and build on your strengths.
1. Strong leadership
For a startup to muster the Herculean strength it will need to succeed, it must have determined leaders willing to work hard to make it happen. But don't confuse being a strong leader with a hierarchical, authoritarian boss.
Good leaders understand the need to hire the right people and delegate those people and trust them to do their jobs. They understand the need to develop synergistic partnerships and collaborative relationships. They believe deeply in their business and are constantly working to develop their vision for the future of the business.
Leadership is especially important for a start-up because everything about the business becomes central. He is in an extremely volatile state. Strong leaders are the decision makers, idea generators, team builders and image creators of their company. If you are the head of a young company, you play a crucial role in all of these areas. In short, the rest of the advice below is worthless without a strong leader showing the way forward.
2. Thrive in a competitive market
No matter what type of business you are heading into, your startup is competing for survival. Fierce competition is either going to drive your startup forward, push you and your business to new heights, or eat you up for lunch.
If you want to avoid being turned into sushi, you have to learn how to thrive against direct or indirect competition. In fact, research shows that learning to thrive in the “red ocean” of competition will strengthen a startup for long-term survival.
Related: 8 Essential Startup Tools For Every Entrepreneur
Competition forces start-ups to focus on customer needs and keep costs lower and under control. It also opens up opportunities that start-ups can take advantage of. In the rocky waters of a competitive market, no one has the luxury of spending time in a life raft. It's sink or swim, so you better be ready to start paddling right off the bat.
3. Harness the right talent
If you're a strong leader, you already understand the importance of hiring the right candidates with the knowledge, skills, and personality to do the job competently. But it's not just about hiring the right people; it's about building an exclusive team that can work together, nurture each other, wrap each other up when necessary, and stay excited and focused on the task of launching a successful startup.
Au During the hiring process, remember that these are the people who will make or break your startup, so be careful and discerning. The hiring process takes valuable time away from your company. Your goal should be to spend this time wisely so you don't have to do it again quickly. Refine your search by shortlisting candidates with carefully crafted classified ads that specify exactly the type of candidates you are looking for.
Call references. Ask candidates to meet other team members to see how they fit in. If you create the best team possible in advance, you will save a lot of time and money in the long run.
4. Sustainable Expectations
Your startup has achieved some success. Things are looking up and sales are skyrocketing. The sky is the limit, right? It can be tempting to assume that business will continue to exceed your wildest expectations. Here's your reality:good times don't last forever.
Even when things seem to be working perfectly, it's important to maintain a cautious mindset. If you assume things will always be good, you are setting yourself up for failure. Sustainability requires constant effort and hard work. You can't focus on past successes or rely on unrealistic growth potential.
Whatever your business is, you need to be prepared, keep working hard, and understand that even though you're thriving now, the competition is pushing you. True success doesn't just come when everything is going your way; it's also what you do during lean times. This is how you achieve long-term sustainability.
5. Budget and financial issues
If there's one thing that seems to plague most startups, it's cash flow. It's easy for a young business to get bogged down under stress and financial pressure. Unforeseen expenses and emergencies appear. Sometimes you look profitable on the books, but in reality you expect customers and clients to pay you. The bottom line is that most startups don't bring in a lot of revenue - at least initially - so paying the bills and finding ways to grow is an ongoing problem.
Budgeting and planning - Careful planning is essential to overcome this initial financial difficulty. Write down your cash flow projections and develop a financial plan. Having an idea of what you can reasonably expect in terms of expenses and income will help you plan ahead and spot problems sooner.
Consider accelerating your cash flow schedule by requiring payment more quick on bills. Another option is to require customers to make a deposit for goods or services.
6. Defining your product and niche market
For many new entrepreneurs, deciding what type of product or service to focus on is the first major hurdle in launching a business. This is especially true for e-commerce entrepreneurs, who can struggle to decide which niche to focus on.
For one thing, there are so many potentially successful niches, it's hard to know which one to focus on. your time and energy. On the other hand, all the right ideas have been made, so how do you compete and stand out in a crowded market?
Related: 5 Startup Lessons I Learned From My Immigrant Dad
Now is the time to get down to business with research and introspection. Here are some things to consider when defining your product and market:
What type of client would you like to do business with?
What are your interests, areas of expertise and experience? Your niche should come from an area that naturally interests you.
What are the emerging trends you can capitalize on?
Keep in mind that whatever you do should aim to create a unique brand.
7. Understanding Your Customers
Earning customer trust is paramount in any business if you want to build a loyal customer base. This is what all startups seek to achieve. But here's the thing:No startup will sell to every customer. Not everyone will be interested in buying your product or buying your service. To be successful, you need to know who your customers are and how best to reach them.
It's not enough to know your customer's age, gender, or education level. You need to understand what motivates them, what they hope to accomplish, and what challenges or obstacles they encounter. Spend some time talking to them, to really get a sense of who they are. Consider creating a customer persona, a semi-fictional character that represents a generalized ideal customer. This can help you see more clearly who your customer is, so it's easier to find them.
8. Marketing and Branding
Every business has a personality. It is more than just a logo and a catchy slogan or tagline. It's what this company stands for, how customers see it, and what attracts people. But startups often miss this because they overlook the importance of advertising and marketing. Marketing, branding and advertising play an important role in how a business creates its identity and how the outside world perceives it.
Get a boost on marketing and branding will help a business establish its brand identity, which is huge when it comes to differentiating itself from the competition.
Branding requires a business to understand its customer base and then articulate what makes them makes it different or unique from others. Branding should be part of a startup's vision from the start. It also gives customers the feeling that the company is here to stay.
9. A well-defined vision and objectives
If there's one sure thing that all startups face, it's constant change. It's like trying to jump into a long-distance relay race that started in front of you, with a team you've never practiced with before. To be successful, you better know where you are going early on. Otherwise, you will be lost before you start.
A well-defined vision is a turbo-boost to cross the finish line. It lets you set goals that define the path you plan to take and how you envision your progress along the way. A strong vision, along with clear goals, will give you a strategy for success.
Use it to develop a strong internal structure and you'll have the "muscles" to get where you want to go. Start by creating a mission statement, which states where your business is heading and what you expect it to achieve.
10. Time Management
In the midst of all the countless decisions and issues it takes to start a business, it can be easy to feel that time is the enemy. There just aren't enough to complete all the tasks that need to be done in a day. Learning how to manage your time well is key to staying on track. Working smarter isn't harder, that's fine, but is it really possible?
It is, but only if you stay focused and find ways to reduce downtime, maximize your productivity and know your limits. Be sure to pick a weekly goal, something you want to accomplish during the work week. Just as setting your overall business goals will help you see the big picture, choosing smaller, smaller goals to tackle each week will help you stay focused on what's important.
Finally, be sure to take breaks. Stretch your legs while walking. A short mental break will actually help you be more productive. It can give you the space you need to make better decisions and empower you to be the best leader you can be.
Related: 5 Startup Mistakes Entrepreneurs Can't Afford
