Starting a small business can be an exhilarating venture. It can be easy to get caught up in your dreams, assuming everything’s going to be amazing and your business will be wildly successful.
It’s definitely a possibility, but you also need to be practical and look at the facts. Statistics show that 50 percent of small businesses fail within their first five years of operation. Assuming you have a successful startup, there’s no guarantee that your business will be lucrative over time.
Fortunately, there are steps you can take to improve your odds of starting a business that’s both long-lasting and thriving. Keep reading for our top five tips.
1. Be Different
To be a successful startup, your business model needs to bring something new or unique to the table. Whatever industry you’re in, you need to think about the possible “game-changers” you can incorporate. Otherwise, why would consumers choose your products or services over another company?
Distinguish Your Business from Competitors
Start by figuring out what will help you stand out from your competitors. The harsh reality is, there are thousands of other businesses doing the exact same thing you’re doing.
You can take a different perspective on products or services or find a unique niche or sub-niche to specialize in. Additionally, you can appeal to consumers by telling an amazing story. Use marketing to set yourself apart from the other players in the industry.
Be All About the Consumer
Consumers will choose you over your competitors if they genuinely believe you care more about their needs. At the end of the day, people don’t care about your company – they care about what your company can do for them. People won’t patronage your businesses out of a sense of obligation or charity.
The more you can make your business’s products, services, messages, and mission statements about the consumer, the better.
Be Prepared to Work for It
Finally, recognize that startups take a lot of time, resources, and dedication to get up off the ground. However, it’s not just about getting your business started, it’s about putting in consistent effort to keep it running at full capacity.
Eventually, you may get to the point where you can take a step back and earn ridiculous amounts of money, but you have to earn that privilege. If you’re not willing to put everything you’ve got into creating a successful startup, you may want to rethink your priorities.
2. Do Your Homework
Working hard for your future business starts from day one. Before you get financed or even start talking to potential business partners or investors, you need to do your homework.
Conduct Thorough Market Research
Start by diving deep into market research. Learn everything there is to know about your industry. You need to ask yourself vital questions, such as:
- What are the current and historical industry trends?
- How saturated is the market in your area of operation?
- What companies are your biggest competition?
- What are your most successful rivals doing right?
- Where have others failed before you and why?
- What are the current rates for the products or services you’ll be offering?
- What is your growth potential?
- What will your minimum costs be?
- How difficult will it be to make a profit?
Create an In-Depth Business Plan
Your startup success will heavily rely on your financing. But before we get into your financing options, we need to talk about how you can get third parties to believe in your business enough to invest.
This is where you put your marketing research to work. Based on the data you uncovered, you need to build an in-depth business plan. It should include:
- An engaging and compelling overview of your business
- A description of your company
- A detailed layout of your products/services
- An analysis of your industry and its market (from your market research)
- Your strategy/business model
- The structure of your business (organization and management)
- The finances (startup costs, operational costs, and financial projections)
3. Consider Various Funding Options
Next, remember that there is no singular formula for a successful startup. Therefore, if one door for funding closes, move on to the next. Here are the most common options.
Traditional Business Loans
Most business loans are granted through banks and other lenders. They offer relatively low, fixed interest rates. However, bank business loans often require a respectable credit history and credit score, which can disqualify some borrowers.
Lines of Credit
There are also revolving lines of credit. This funding option gives the borrower a maximum amount they can borrow at one time, like a loan. However, they can take money out, put some back in, and take some out again, as long as they stay under their cap.
If you can’t get approved for a loan or line of credit, your startup success may depend on third-party investors. You can look to angel investors, crowdfunding, friends, family, and more to get the funds you need. You can even consider bringing on a business partner with deep pockets.
4. Start Small
One of the biggest mistakes people make when starting a small business is jumping in head-first. While you need to commit to and believe in your business, you should still start small with a minimum amount of overhead.
While you may be tempted to go big right off the bat, doing so could overextend your finances and make it nearly impossible to make ends meet. Instead, start smaller than you think is necessary and allow your business to grow with your customers. Expand once your business model has proven successful.
5. Don’t Go It Alone
Finally, remember that you don’t have to do this alone, nor should you. Unless you’ve studied in multiple fields of business, you may not be fully qualified to run certain aspects of your business. Furthermore, it can be quite helpful to gain different perspectives on the various issues facing your company.
A successful startup business owner knows when to ask for help. This could include hiring marketing specialists, IT specialists, and legal aids.
We also recommend looking into hiring business advisors who can help you maximize your profits and minimize costs. This blog post can explain more about how they can benefit your business.
Do You Want to Build a Successful Startup?
If you want to have a successful startup, you have to work methodically. Take nothing for granted and remember the tips listed above. There’s no reason you can’t be within 50 per cent of successful businesses.
And if you’re looking for more great advice and information for your business, be sure to check out some of our other articles before you go!