Whether it’s in the tech industry or retail, startups are popping up all the time. But the hard truth is that 90% of startups fail in their first year.
As intimidating as this statistic may be, it’s something all entrepreneurs must come to terms with before launching their startup. While there’s no sure-fire way to guarantee success, there are some factors you can control as a business owner.
By utilizing a few business-savvy techniques, it’s possible to boost your company’s chances of survival. It’s a tough world out there, so read on for three tips to ensure your startup success!
#1 Know Your Startup’s Market
You wouldn’t advertise a surfboard company in the middle of Kansas—and the same logic should be applied to any startup’s marketing strategy.
Understanding your target audience is the first step to a foolproof startup launch. From there, you’ll want to study market trends, and figure out where the best place to advertise is.
Depending on your product, service, and clientele, consider which marketing technique will best serve your unique brand:
- Social media marketing (LinkedIn, YouTube, and Twitter are particularly hot for startups)
- Television commercials
- Billboards and bus ads
- Newspaper or magazine spreads
- Telephone marketing
The bottom line: Advertising costs money, but it’s usually a good investment. Just be sure to do your research before making any concrete decisions. Use a software like Marketing360 to keep your advertising more organized.
#2 Choose Your Team Wisely
Startup budgets can be skinny, to say the least. That’s why you want to choose your team wisely and make sure you’re hiring the best people for each job. When you have a small number of employees, you’ll want people who are dedicated, passionate, and effective.
A startup’s success often hinges upon its initial members, and different industries demand that these individuals have different skills and areas of expertise. For instance, if you have a startup in the retail industry, you’ll ideally want to bring some great communicators onto the team – people who excel in customer service with the ability to recognize and meet the desires of the modern consumer.
Over time, you can work on expanding your staff, but startups in their early stages should focus on filling key roles only. These positions include:
- Sales manager
- Chief of marketing
- Product director
- Operational manager
In addition to these roles, you’ll also need a CEO (most likely, this person is you). However, many startups benefit from having multiple founders, who pool their funding and create a stronger vision.
The bottom line: Keep your team small, but strong. Fill key positions first and hire trustworthy people you can collaborate with. Make your hiring process more thorough with multiple interviews and a background check. Use a dependable screening service, like ShareAble for Hires, to ensure there’s nothing you need to worry about.
#3 BUDGET, BUDGET, BUDGET!
Studies show that the #1 reason most startups fail is because they run out of money.
This probably comes as no surprise, since the point of launching a business is to make a profit (and making a profit isn’t an easy thing to do). That being said, the best way to avoid financial demise in your startup is to budget wisely.
Many new businesses crash and burn due to overspending on needless expenses. Places to avoid splurging in your company’s early stages include but are not limited to:
- Business lunches – Conducting meetings over pricey meals may feel like what you want to do, but it’s not an activity most startup budgets can handle. Try to keep food costs below 5% of your profits, until you gain more financial stability.
- Office parties – Rewarding your team for their hard work is important, but office parties are a costly way to do it. Rather than splurging on alcohol, decorations, and catering for these lavish celebrations, opt for employee bonuses to show your appreciation instead.
- Traveling – Unless absolutely necessary, traveling for your startup should be avoided at all costs. Airline tickets, rental cars, hotel rooms, and meals can rack up quite a receipt for even the shortest business trip. If you can, keep meetings close to home (or virtual) rather than draining your bank account by globetrotting.
The bottom line: You have to spend money to make money but try to spend it in moderation. If you’re struggling to find balance in your startup’s budget, use a small business accounting software like Wave to keep track of finances.
Start the Journey to Startup Success
There will always be unknown variables when launching your own company. That’s why being prepared, having a vision, and hiring the right team are such important steps to a successful startup.
Remember that every thriving business has to start somewhere. Implement these tips into your company’s launch to solidify your place in the market. Be frugal, be smart, and only spend your money on the absolute necessities. Our last note: every little bit adds up.