Start-ups abound, but not all of them have the staying power. The Small Business Association says that “only half of new businesses will survive the first five years and only a third will make it past 10.”
An example is Virgin Brides, which was launched in 1990 and catered to wedding services, but it eventually closed because the operational costs did not match the market demand. Sir Richard Branson, Britain’s seventh richest billionaire and founder of the Virgin Group, says in a Virgin blog post, “Those start-ups were founded by passionate leaders and offered interesting products and services. What some of them lacked, unfortunately, was the ability to survive and thrive over the long term.”
That much is true today. Individuals may have the passion and the motivation, but those are not enough to keep the business afloat. What else can be done then? Here are some ideas.
Identify the Target Market
Market research is one of the most basic steps in starting a business. You have to find out what people want or need today and understand their behavior. The catch is that your company must have a unique way of addressing what people need or solving that problem. You should have an edge over your competitors in that respect.
Doing market research helps you identify the available opportunities for you, whether they are big or small. It allows you to focus on specific targets, avoiding wastage of effort and resources on bad ventures. It also guides you in developing or improving your marketing strategies.
Once you have identified your target market, you can create a business plan. This document is your blueprint and clearly defines what your company’s goals are and what you and your teams are going to do to achieve those goals.
Plan the Company Finances
Every business venture is a risk, but that doesn’t mean you can simply wing it and see where the wind takes you. Have a sound financial plan that takes long-term company plans into consideration. Identify the expenses you will make at the launch and at certain periods (e.g., monthly, every three months, in a year).
Take note of trends and your progress so you can forecast which periods generate low revenue and you can prepare for such times. Determine which expenses should be prioritized, and make sure you have enough reserve funds to keep the company running during lean months.
Develop an Effective Marketing Strategy
Your products will not sell by themselves, especially in an environment where the competition is tight and consumer behavior is somewhat fickle and occasionally unpredictable. Product development becomes relatively easier when you can determine the methods you can use to develop brand awareness and gain customers’ trust and confidence in your brand.
Digital marketing and social media are potent tools for reaching out to a bigger audience without the fear of geographical barriers. As long as you can optimize your online presence and create a multifaceted approach that can appeal to many people, regardless of culture or beliefs, you can sell your product.
Establish an Efficient Recruitment Process
To begin with, you need to hire people who have the right attitude and qualifications for the job. You can only do this if your recruitment process is streamlined.
For one, candidates should be informed about the competencies, knowledge, and abilities required for the position. They should also be given a timeline of the recruitment process. This sets clear expectations and saves time.
Your tools for sourcing and selection should also be effective. Identifying the quality of your hires, the hiring cost, and the time needed to fill vacant positions will help shorten the recruitment period.
If your company deals with safety-sensitive or high-security services, for example, you can call applicants’ character references to verify the candidates’ employment history and check if there are criminal records. In states where the use of recreational or medicinal marijuana is approved, applicants may subject themselves to blood tests to check if their tetrahydrocannabinol (THC) levels are below toxic levels.
Whether it’s with suppliers, business partners, or the employees, a healthy working relationship is crucial to company growth. Your relationships with business partners and suppliers open up opportunities for expansion and equitable exclusive deals.
Keeping your employees happy and motivated is just as important, too. Compensate them properly, mentor them, listen to their concerns, and reward and recognize their efforts. Give them avenues for professional and personal growth so they become your best pool of talents. Allow them to head projects that will test their leadership skills and explore their creative and analytical sides.
Starting a business and keeping it operational are two things that must be thought of carefully if you want to be successful. It is imperative to sell high-quality products and deliver excellent customer service. These ensure customer loyalty and help you gain a following, after all.
But you also have to look inward in order to see which parts of your business need improvement or change. When you can look at your business from different perspectives, you can spot existing or potential problems and come up with solutions.