Since the early 2000s, many startups have been sprouting in efforts to follow the trailblazing path of Facebook, Twitter, and other top businesses.
But building a sustainable business model is hard; in fact, recently FreshBooks deduced that business failures increase with years of operation, and nine out of ten startups will fail.
So if you’re just getting your company up and running, there’re a few key things you should consider:
1. Raising Funding for Your Startup
According to Fortune, lack of capital is a major reason why most startups fail. To avoid this, monitor your books regularly and find investors who’re willing to sink money into your business ideas.
Others fail because they depend on a single client who makes the most purchase; when the client disappears, they take the company’s funding with them. So, it’s also good to seek lenders to stabilize your money flow.
2. Learning To Build a Solid Business Plan
Michael Dell, chairman, and CEO of Dell said, “…Ideas are a commodity but the execution process cannot be bought nor sold.”
This means that an execution plan is a key to success. It can help you secure loans and investments, and prepare for unforeseen circumstances.
To get the right business information, consult legal advisors to learn how to register your business and file taxes, or financial advisors to know the number of employees to hire and set a budget for your business expenditure.
3. Motivating Your Workers
Get a team of workers you can manage and deal with diligently. It’s wise to hire the best people you can find to help you augment your ideas and build a product you desire.
You also need experts who’re capable of helping you accomplish your product’s potential. You can invest in your talent by training, guiding, and motivating them regularly to enhance their performance.
4. Assessing the Product’s Potential
Many startups waste millions before they realize that their products are overvalued or are facing a significant competitor.
Assessing product potential is a huge challenge. However, even if you’ve invested thousands of hours in the idea and the product development, don’t pursue it if it’s not going to return its investment.
To make consistent profits, your product must address a vast market. You should, therefore, be keen on your investors’ and customers’ needs to avoid a business shut down.
5. Developing a Marketing Plan
Dropbox and Evernote marketers are amazing tools that help people do everything in the cloud. However, when they tried to sell the idea of project management, their customers never showed interest.
This indicates that to make sales, you’ll have to change your unique selling point to something that resonates to your target audience.
The sooner you figure out customers’ needs, the faster you can grow your business. You’ll need a resilient and persuasive marketing team that understands the trends and markets within your industry.
If you’re serious about venturing into the startup business, then prepare yourself for both success and failure. It’s wise to observe and learn from those who succeed and failed before you to avoid making similar mistakes.
For instance, in his post-mortem diagnosis, co-founder and CEO of Shyp, Kelvin Gibbon, said that even though their customers and small businesses were enthusiastic about their product, Shyp executives did not focus on building a sustainable business.
The company’s profit didn’t have the potential to beat the expenditure. Therefore, they lost more money with time. In conclusion, Gibbon advises other founders to emphasize building repeatable, scalable, and sustainable business models before they run out of resources.