Actual parents may have my head for this, but I’d say having a business is kind of like having a baby. A lot of people wait until they are ready for it – they read a lot and do their homework, they make sure they’re as financially stable as they’ll ever be, they mull it over again and again, weighing the pros and cons… And yet, no matter how prepared you try to be, you need to come to terms that you simply can’t be 100% ready for something like this. You may have read all there is about it, you may or may not have wholehearted support from those around you, you may even feel ready and feel like luck is on your side, but the fact is that you still have to brace yourself for the unexpected.
Preparation in advance is incredibly important, but so is being flexible. Starting a business – and maintaining it for hopefully years to come – needs you to be able to think on your feet. Things will inevitably crop up and you will need to think fast and act faster, and adjust accordingly on the fly. It’s exactly like Dwight D. Eisenhower said: “... plans are useless, but planning is indispensable.”
Obviously, this is a bit of a terrifying concept - and thank your lucky stars this is where the analogy with parenthood ends; while you’ll definitely have to carry your company for a while and it will depend on you for ages, at least you don’t have to go through actual pregnancy, which I’d argue is a hell of a lot more terrifying.
It’s natural to be afraid. Having your own business is a massive investment and you obviously want it to succeed – but you also need to make sure that the fear of failure doesn’t ruin your chances completely.
This is where the preparation comes in. If we take a look at what’s needed for a company to succeed, we can also see the most common reasons they fail. Let’s see what it takes to avoid being just another statistical failure. (You can also check out this nifty infographic made by Embroker about business failure.)
Funding and Finances
A lot of people start businesses with skewed projections of just how much it will take to run it. Budgeting is a tricky business, and not everyone has what it takes to secure financing. Most companies have to rely on their own initial investment while they go after other options such as investors, venture capitalists, and bank loans – which is a standard, but not always successful way. You need a lot to persuade others that your business is worth investing in. In fact, if you haven’t prepared a good enough pitch, your business may fail before it even starts.
Even if you’ve already got the leg-up you need, you need to make sure to stay relevant. It’s easy to see that a lot of industries are overly saturated, and that the market can be a highly competitive, even cut-throat environment. This is why companies sometimes feel like they need to start off by setting lower prices than their products and services deserve, in order to get clients interested to begin with, but this can lead to not earning enough. The costs of labor, production, marketing, delivery, etc. can very easily outweigh your revenue, so you need to be careful to find the golden middle.
Meeting the Needs
If you ask people why they think small businesses and start-ups fail, the expected answers are usually the lack of money and funding (which is true), management that leaves a lot to be desired (which is also true), and so on. However, there is another big factor that research and statistics confirm: not being familiar with the market demands and misinterpreting what it is that people want and need. To sum it up – miscommunication with the market.
Let’s assume that you’ve got a fantastic company vision. Let’s say you have already thought that part through and defined your business clearly (this is actually another hurdle a lot of companies face). You still need to be on your toes – do a thorough analysis of the market.
What does the market need? What are your opportunities? Where is the minefield of risks and threats? Who is your competition? Big questions with even bigger answers.
One piece of advice is to avoid trying to make your business attractive to everyone. Don’t spread yourself too thin and risk being vague about what it is you actually offer. Find your niche and specialize – know your target audience, anticipate their needs, and market yourself as an expert at meeting them.
Branding and Marketing
They say, “If you are not growing, you are dying.” Seems a bit over the top, but growth should not be underestimated. Marketing is crucial in general, but especially in the early stages of your business. Even if you don’t have the best, most innovative product out there, people will believe that that’s exactly what it is, as long as that’s how you present it and market it. The sooner you launch successful marketing initiatives and marketing campaigns, the sooner you will reach your target audience and grow.
When does a start-up become a legitimate, big business? What marks the transition from a start-up to a larger, more successful company? When do we stop calling it a start-up?
Well, according to several sources, it’s to do with the number of employees and offices, generating revenues higher than $20 million, being merged or acquired by a much larger business, etc. How are you going to achieve any of that if people are not aware of you in the first place?
You need to know what you are before you can communicate it to the market and to your prospective clients. Define your brand, define your identity, define your image. Perhaps most importantly: go digital. We have partially covered this topic in our other article, [Branding for Start-ups], but let’s dig a bit deeper.
Investing in good digital branding solutions and good digital marketing can make or break your business. If you can’t do it in-house, then try to hire a digital branding agency. After all, according to Forbes Magazine, all US-based businesses need three things: identity, website, and social media presence.
Social Media
Logos
Take a look at this picture:
There are no actual logos or brands there, but your mind definitely auto-filled it and had immediate associations, right? That’s the true power of a logo – the ability to instantly represent and be recognized. If you manage to stick in someone’s mind, they’re bound to look you up sooner or later - which brings me to my next point.
Websites
Much like your headquarters and offices, you need to have a digital central hub too. Your website is the main place everyone will visit to learn more about you and get in touch with you. Now, you wouldn’t let people into your office if it’s under construction, or a complete and total disorganized mess, would you? The same goes for your website. Be presentable.
First impressions do matter, and you leave a much more memorable one with smooth, user-friendly web platforms (and accompanying apps and blogs) that have all the information easily visible and accessible. Your prospects and clients will have questions that your website needs to answer. Beyond that, it needs to be responsive and SEO-friendly. Once your website is up, there are two things to keep track of: getting good, regular traffic and maintaining it long-term. Using heat maps and other sophisticated digital tools, you need to keep a low bounce rate and keep accurate track of your prospects’ movements about your website, so you’d have better insight into what you need to do to convert them more successfully. A lot of people simply click around out of curiosity, but you need to be more remarkable and exciting than that.
