Starting the journey of a startup business is a daunting task and unfortunately, ninety percent of startups fail. If you have startup idea and want to succeed and survive, keep these five tips in mind:
1. Start with a niche market
While you eventually want to reach a large market, starting with a small, niche market is important. During a lecture at Stanford University, PayPal co-founder Peter Thiel said that entrepreneurs need to start in a very small market, so they can take over that market and slowly expand. He also stated that young entrepreneurs make a mistake when they try going after large markets first because large markets have too much competition for small startups to handle.
One example of a successful startup that started in a small market is the on-demand butler service, Alfred. Alfred is a service that provides trained ‘butlers’ for young professionals who don’t have time to run errands or clean their houses. While Alfred could have offered their services to anyone in need of a butler, they decided to focus specifically on young professionals in order to establish excellent service before expanding to other markets.
2. Devise a solid marketing plan
Once you know your market, you have to come up with a plan on how you’re going to reach it. When you’re starting a new marketing tactic, it’s important to implement it quickly so you don’t continue repeating the same tactics.
Almost all marketing tactics need some trial and error to see what works and what doesn’t. If you see a tactic working, don’t be afraid to fine-tune it to make sure you have the best marketing effort possible for your startup. However, if you see the tactic not working, modify it and try again.
3. Hire the right employees
You can’t develop your startup all alone. You need to rely on the support and expertise of others. That’s why it’s important to hire the right employees. Successful entrepreneurs will take the time to find, hire, train, and motivate skillful employees. Once they have good employees, they also work to keep them happy and productive. However, each stage of business requires a different team with different skills. As a result, entrepreneurs sometimes also need the willingness to restructure their team to ensure they have the strongest employees available.
4. Manage your finances wisely
To have a successful startup, you must be good at managing the finances and operating with a very lean budget. Every part of your operation needs to have its own budget and you have to make sure you’re avoiding all unnecessary expenses. You also need to know what your startup needs to meet its budget while reaching key milestones. This is when having excellent bookkeeping and accounting tools come in handy.
For example, you can get essential cloud accounting software from Sage One to help you monitor whether you’re burning through your cash or making money. This type of accounting software can also help you save money and increase income. You can also use it to email invoices so you get paid faster. Additionally, when tax time rolls around, your accountant can easily pull up all the information he or she needs, which saves you time and money.
5. Focus on the customer
Bryan Roberts, a partner at the venture capital firm Venrock, notes that some startups create their product for one group of customers who love it, only to discover that the rest of the world doesn’t like the product at all. However, they don’t change anything because they’re still focused on the initial group of customers. Successful startups listen to customer feedback, whether it’s positive or negative, and change their product or target market accordingly.
To build a successful startup: focus on your target market, find the right employees, manage your finances wisely and consistently listen to feedback from customers. What struggles have you faced while building your business and how did you overcome them?