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Anyone can come up with the next big idea in the startup industry. However, not everyone is capable of realizing this and bringing it to the public. One of the most well-known figures in the startup world is that only a tiny percentage of new companies make it through their first five years. No one would ever convince you that starting a business is simple in 2021.
Entrepreneurs face the most difficult challenge of all when it comes to making their businesses successful in the startup world: finding a route that maximizes their chances of survival and growth. In other words, you must have an effective expansion plan in place.
It is fortunate that there have been several successful startups over the years and that we have seen several unicorns know and grasp the aspects of a successful startup strategy.
There are several things that entrepreneurs must accomplish before they can put together a startup growth plan that will allow their company to develop for the long term, so let’s take a closer look.
Ensure that there is a market for your concept
If this seems apparent, you’d be amazed to learn how many would-be entrepreneurs try to develop a successful company without first determining whether or not there are enough customers ready to pay for their goods or services to justify the firm’s existence.
To determine whether or not your product or service can be sold, you must first perform the groundwork. This implies that you’ll need to research to see whether there is a market for your concept. Next, take an inventory of your competitors to check whether they’re already in the game, and see if you can improve upon or reinvent their offerings to justify your entry into the market.
First, you must determine whether or not your company concept has a reasonable probability of success. And that doesn’t need that it be a completely original concept. It simply implies that you must have enough customers ready to pay for your goods or service to be profitable.
It’s possible to create your pizzeria even if your town has a plethora of other pizzerias that are all doing well. Why? So why not get a piece of the action? The market has demonstrated that there are plenty of pizza lovers in your neighborhood.
Assert your value propositions
Having a clear idea of what your company can provide for your clients is essential. If you don’t have this ability, you won’t persuade prospective customers to give you their money.
To attract consumers, you need a value proposition, a specific aspect of your product or services. Customer service is all about finding solutions to their difficulties. What can you do to alleviate their pain points? What distinguishes you from your competitors?
With these questions answered in full, you may begin the process of pitching your goods or services for them to be successful.
With no established and verified value proposition, it may be difficult for you to attract customers to your organization. Think about it: How can they know they need you if you don’t understand why they do?
A well-articulated value proposition is essential for a small firm or startup looking to get venture capital investment. To put it another way: why would someone invest in your firm if they don’t know what it offers? That’s why it’s so important to take the time to examine your company’s traits thoroughly, what a potential client wants, and responses, assumptions, and preferences in relation to your organization in the beginning stages.
Define your target market
To obtain the best results when promoting and marketing a new business, it’s essential to know exactly who you’re trying to reach and what they want from your company’s value offer.
Knowing who you’re pitching to makes the process more efficient and reduces the risk of making mistakes. When you know exactly who you’re trying to reach, you’ll be able to make better choices about how to expand and improve your business. When you know who your target audience is, you’ll be able to craft better-targeted marketing messages.
Surveying your consumers is one of the best methods to do this. To provide an example, imagine that you’re the CEO of a software development company. You may debut your product in a low-key manner. Try out your product on a small group of individuals (who you assume to be in the target demographic) and ask them questions along the route to gather their honest opinion.
People who have shown an interest in your company and provided you with their contact information may also be contacted through newsletters and email blasts. In most cases, you’ll have a solid idea of where you should be going based on what individuals who take the time to answer your questions are likeliest to be.
One of the best ways to learn about your audience is to analyze the industry, identify your rivals, and get to know them exceptionally well.
Continue to be relevant
It’s going to be tough to get your company back on the map if your service or product is no longer considered necessary or has fallen off the list of current trends. Don’t wait for anything wrong to happen before you act. Be aware of what others are saying about your service or product and respond accordingly. Make sure to reimagine if necessary. Take a step forward and broaden your horizons. Develop or enhance a service that is already in existence, or create a new service entirely. Any way you look at it, keep a careful eye on how relevant you are.
Offer excellent customer service
You’ll have to work hard to earn your customers’ confidence, but one slip-up and you’ll lose them all before you get a chance to explain yourself. High-quality customer service should be a constant regardless of your company’s reinvention, development, or growth. Your employees must be able to do their duties. To provide your clients with the assistance they need while doing business with your company, make sure they are well-trained.
Embrace the right technology
Today’s startups are aggressively exploring innovations and technology that ease many of the operational tasks. Find out how and when to take advantage of the latest technological advancements, from automated financial management tools to phone systems.
Take risks
Always make an effort to provide something new. By doing things a little differently, you have a better chance of stumbling onto an altogether new and intriguing market segment than if you stick to the tried-and-true approach.
Set goals in writing
Add action items to each objective by writing them down in a list. Short-term goals are more critical if your firm is a startup. Research and development are often required before the long-term result of a new company idea can be reliably forecasted.
Goals may be broken down into two categories:
- Between six and 12 months is considered short term.
- Two to five years is deemed to be long-term.
To get what you want, be as detailed as possible. Personal objectives should be the first step. Then, state your company’s objectives. Next, the following questions need to be answered:
- Do you have a goal in mind for this business?
- Is this going to be a big or a little company for you?
- Does your family want to be involved?
- Do you want to create work, or do you have a strong belief that you don’t want to be in charge of other people’s lives?
- Is there a specific issue that you want the company to focus on?
- Provide details about the quality, quantity, and customer satisfaction of the product or service.
- What is your key competitive advantage?
- How do you see the company impacting your consumers’ lives?
Study your competitors
Observing how your rivals do business may teach you a lot about your own company and its clients. To learn from your competitors and concentrate on your customers, here are some questions to ask:
- First, it’s time to find out what you know about your audience.
- Who are your main rivals?
- What is the competition’s strategy for entering the market?
- Weaknesses and advantages: What are the competitors?
- What can you do better than your competitors?
- Which demographics, lifestyles, and psychographics do you want to target?
Financial Concerns
What are your plans for making money? What is the moment at which you’ll break even with your business? What are your company’s earnings potential? Prepare financial predictions by devoting sufficient time and effort.
Your accounts receivables (delinquent customer accounts) and supplier payment periods should be considered while making these estimates. For example, when it comes to being paid by clients, you may have to wait 45-60 days to deliver your invoices.
During the “gaps” in your financial situation, a cash flow estimate will show how much working capital you’ll require.
Here are six crucial aspects to consider:
- Startup Investment
- Assumptions
- Running Monthly Overhead
- Streamlined Sales Forecast
- Cumulative Cash
- Break-even
Decide on a marketing approach
Developing a marketing plan for your company consists of the following four steps:
- Identify Your Ideal Customer or Market: Identity WHO your ideal customer or target market is. For example, in most businesses, 20% of consumers account for 80% of total revenue. Therefore, it makes sense to focus your efforts on the most significant clients.
- Establish the Highest Target Markets: This stage aims to determine which customer profile has the best chance of success and qualify them further. The goal is to place your company on an even playing field with the vast majority of the customers you want to attract. Discovering your ideal clients and how to position your business in the market effectively are both crucial.
- Develop Tools, Strategies, and Methods: You cannot service a market that you cannot reach. Finding, engaging with, and educating your core market about your goods and services are all part of marketing. Select a set of tools and tactics that, when used in concert, will improve your chances of success.
- Test Marketing Strategies and Tools: The assumptions we don’t validate often might cause difficulties for the firm. If you’re going to be spending a lot of money, make sure you test out all of your assumptions.
Choosing a growth-prospective location
Your company’s location has a significant impact on its performance. If you want to work from home, in a co-working space, or a physical office, you’ll need to figure out the optimal location for your business.
Before deciding on a site, here are some questions to ask yourself:
- Do you prefer a formal work atmosphere or a more informal one? This should be in keeping with your company’s style and brand identity.
- To what extent do you want your audience to be in touch with you? In the beginning, it’s best to be close to your consumer base so that they don’t have to go far to buy your goods.
- Is a vast parking lot necessary? Customers, staff, and suppliers should all be able to reach your company efficiently. Therefore, accommodations should be spacious enough to accommodate as many clients as possible throughout the day.
- How much are you willing to pay for the property? Your budget should be established before searching for a home. For example, is it better to lease or own an office? The more you know, the easier it will be to focus on specific areas.
- Is there a threat of competition? In most circumstances, proximity to the competition is a positive thing. Restaurants, for example, might take advantage of large lines at other eateries.
- What level of exposure do you want for your business? Generally speaking, you’ll want to locate your workplace in an area where many people congregate. Customers are more likely to enter the store as a result of this. A virtual or mobile office is an option if this isn’t an issue for you, but there are many options if it is. Keep in mind that tax deductions for physical, virtual, and mobile workplaces all vary.
Putting together a startup team
A startup’s crew should have a variety of skills and experience. Therefore, you must choose an experienced team of business experts, such as
- A product manager who is responsible for overseeing the strategy and growth of your goods.
- Your company’s marketing officer focuses on your product.
- Your organization needs a sales manager who is capable of generating new leads and bringing in money.
You may not be satisfied with these three roles. In the early stages of a company’s existence, outsourcing is common:
- Accountants
- Attorneys
- Bankers
- Writers of content
- Human resources specialists
- Programmers and designers
- Industry insiders
Set clear terms with your co-founders
You and your co-founders must agree on the terms of your business partners from the outset of your venture. If you don’t, you might face significant legal consequences in the future (like the Zuckerberg/Winklevoss Facebook case). Thus, the founding agreement might be seen as a “prenuptial agreement” in a sense. The following are some of the most critical transaction conditions to include in your formal funding agreement:
- How are the company’s founders divided in terms of ownership?
- Is the proportion of ownership susceptible to vesting dependent on the amount of time spent working for the company?
- What are the obligations and tasks of the company’s founding members?
- The question is whether a corporation or one of its founders can purchase back that founder’s shares if one of the founders quits. What is the cost?
- How much time is each founder required to devote to the company?
- What, if any, compensation is due to the company’s founders? What can be done about it?
- In what ways are the business’s most important choices and day-to-day decisions made?
- Whether by majority vote, a unanimous vote, or entirely in the hands of the CEO, what are the company’s policies?
- What are the conditions under which a company’s founder might be fired from their position as an employee? (In most cases, this would be a decision of the Board)
- How much money or assets does each of the company’s founders give or invest?
- What criteria will be used to determine whether or not the company should be sold?
- Should the founder agreement be breached because one of the founders isn’t living up to expectations? Is there a way to resolve it?
- What are the company’s long-term objectives and vision?
- Does the firm have the authority to buy back a founder’s shares if they want to quit the company? What is the cost?
Get a tax ID number
In most cases, you’ll need to apply for a tax ID number from the IRS. Known as an “Employer Identification Number” (EIN), companies have a Social Security number. When you create a business bank account, you’ll be asked for your EIN. You may apply for an EIN on the IRS’s website and obtain it instantly.
A state tax identification number may also be required (California, New York, and Texas require a state ID, which can be obtained online).
Establish a practical accounting and bookkeeping system
Keep track of your finances by setting up an accounting system to keep track of everything from revenue and costs to capital expenditures and EBITDA. This can help you better understand your company’s cash flow and help you file your taxes.
QuickBooks, Zoho, FreshBooks, and Xero are just a few examples of online software packages that may assist in this aspect.
Final Thoughts
As an entrepreneur, you don’t need to be a hit right out of the gate, nor do you need to keep your company concept intact to optimize your chances of success.
Do not be scared to make a massive shift in your life, even if you’ve already been on the job for a few years. It might be the one thing that saves your company.
