If even established companies encounter occasional catastrophes, startups just getting a handle on their businesses will definitely experience a few bumps along the way. In fact, venture capital database CB Insights found that nine out of 10 startups fail due to practical reasons. These include the lack of a market need, financial instability, and cost issues.
These cold statistics make the startup world seem daunting, but professionals and entrepreneurs still enter the business scene to pursue their passions and build legacies. While jump-starting a business can be risky, don’t let this deter you. Instead, treat it as a reminder to ramp up your efforts and help your business thrive!
Here’s the first part of our two-part series on how to prepare your startup business for takeoff:
1. Research the Market
Lack of market research is one of the major reasons businesses fail. It leads to an inaccurate understanding of the target customer’s wants and needs, which causes problems like low productivity, poor sales performance, and difficulty generating new leads.
If you’re a first-time business owner, conduct a thorough market analysis to start on the right note. Gather all useful data about your prospects and competition, and determine how much demand there is for your products or services.
There are two types of research you can explore before taking the plunge: primary and secondary research.
Primary market research involves gathering raw data through focus groups or surveys, field tests, and interviews. Conversely, secondary market research relies on information that’s available on the web, magazines, and newspapers.
The first type of research delivers more specific results than the latter. For example, primary data gives you information directly related to your business. This includes customer feedback and testimonials. On the other hand, secondary research only tells you what customers’ insights about an industry are in general.
This doesn’t mean that one is greater than the other. If you want to make your research more substantial, performing both methods is a great startup business practice.
First, gather data on secondary sources. Find research on demographic information and buying patterns, as well as recent news and events. Then, send out questionnaires or surveys that are fine-tuned according to your secondary data to give you more tangible results.
Once you’ve got all of the data and observations in your hands, it’ll be easier for you to make a strategic plan that will sell the value of your services or products to your target audience.
2. Embrace Changes
People’s needs are fast-changing, and their lifestyles are becoming more demanding. For example, millennials entering the market have become such a game-changer. According to Jeff Fromm, a marketing consultant specializing in millennial data analytics, trends, and insights, millennials are now the largest and most influential of all consumer groups.
As a new company with the ambition to grow, you have to adapt to changes like these in the marketplace to outdo the competition. This involves staying abreast on prevailing market trends and technological advancements that impact your business niche.
Since most businesses are now turning to the Internet for marketing purposes, it can be beneficial to jump onto this bandwagon. This is crucial for startups, especially now that 97% of consumers use online media to search for local businesses, according to a study by advisory firm BIA/Kelsey and ConStat.
Maximize the power of Internet marketing to establish your web presence and reach wider audiences. Use social media platforms such as Facebook, Twitter, and YouTube to your advantage. Create compelling content like blogs, videos, and infographics that are easily shareable to grow your business and expand your product reach.
Rewards don’t come without risks, so it’s best to acknowledge and embrace necessary shifts like this to build solid foundations. Learn how and when to execute bold moves to improve the value your product or service brings.
3. Move One Step at a Time
All startups begin small. Don’t hurry to overtake the big companies.
Take the necessary time to develop your plan and constantly enthuse about what you’re doing. Enjoy managing your business and finding new ways to leverage all your marketing efforts. Remember, it takes patience to achieve that big professional leap.
A product undergoes a long process before it becomes available in the market. There’s a lot of time needed in researching, planning, and actual production to ensure only the best service and quality.
For startups, it’s a similar process of learning and waiting. If you take high risks too early in your venture, you won’t know what you’ll sacrifice. If you give up early, you won’t know what you’ll lose. Avoid spending big just to make your office look grand. Maintain a low overhead and manage your cash flow effectively. If you lose an important deal and client, get up and find ways to improve and rework your processes.
Determination is good, but rushing your ambitions might only create gaps in your growth. Be patient. Do one thing at a time and focus on learning from them, whether they’re failures or achievements. Success doesn’t happen overnight, so take it easy and focus on thriving in the startup scene.
Make It Work
Business success or failure is often influenced by how professionals decide and handle situations in the face of adversity. Startup sustainability can be measured by your willingness to accelerate business growth.
Research the market to identify a business strategy that lets you convert the customer commitment you gain into high sales. Embrace changes to achieve customer satisfaction and leverage your startup business. Be patient. There’s no such thing as an overnight success. Move one step at time.
Success or failure is only determined by where you stop. Say yes to these best practices and make your business work! For more tips on startup success, tune into the next part of our Best Practices series!
Fromm, Jeff and Christie Garton. “Marketing to Millennials: Reach the Largest and Most Influential Generation of Consumers Ever.” USA: Barkley, Inc., 2013.
Griffith, Erin. “Why Startups Fail, According to Their Founders.” Fortune. September 25, 2014. Accessed February 15, 2016. www.fortune.com/2014/09/25/why-startups-fail-according-to-their-founders
“Press Release.” BIA Kelsey. Accessed February 21, 2016. www.biakelsey.com/Company/Press-Releases/100310-Nearly-All-Consumers-Now-Use-Online-Media-to-Shop-Locally.asp
About the Author
Rick Enrico is the CEO and Founder of SlideGenius, Inc., a presentation design agency with clients all over the world. He currently oversees an experienced team of designers, software developers, and marketing professionals who specialize in creating custom corporate presentations and cloud publishing applications. He regularly publishes expert presentation tips on the SlideGenius blog.