Startups are slowly but surely revolutionizing the business world and grabbing center stage across many industries. If there is a group of people with the right incentives and they are organized into a startup, one can unlock tremendous human potential and can achieve incredible things. But if startup ideas are so successful, ever wondered why so many startup businesses fail within the first year of its inception?
Launching your startup is probably one of the most important things to get right so that you get much momentum going in the beginning and have as many people to use your product or service. While there are hundreds of steps involved in launching your startup, we have narrowed it down to 6 most important ones that will help your startup to take off.
MAKE A BUSINESS PLAN
We have heard that great ideas make successful startups. But that’s not enough. It is the ability to formulate and execute the idea into a plan that separates success and failure. A business plan is a blueprint of your business which will map out, organize, and direct the startup. A well-defined business planning has proven to help you grow your business faster by 30%. The process of writing your plan and updating it regularly will help you set and update your milestones, track your progress, achieve your goals, and be successful. A well-charted plan will also prove to be an asset if you ever want to sell it down the road.
A classic example of venturing into a business without a proper plan is that of Overcart, the first Indian fintech startup platform to buy and sell refurbished and pre-owned electronic devices. Overcart never really seemed to be focused on their business. A lack of vision combined with poor customer service and late deliveries forced the startup to shut shop within a few years into the operations.
Starting a business requires a lot of money. A good amount of investment is needed in the initial stages until the business starts generating revenues. A lot of startups don’t reiterate this fact which leads to their downfall.
A study states that 82% of the small businesses fail in the first five years due to poor cash flow management and an understanding of their cash requirements. Creating a detailed cash flow budget is the first step toward intelligent funding. Funding can be secured from venture capitalists, angel investors, and through loans. An adequate supply of funds is needed to meet the day-to-day expenses as well as for business expansion through new locations, products, and market research. A safe estimate of contingency funds also needs to be made to tackle unexpected times such as the current pandemic scenario. A dearth of funding leads to the death of the startup.
Zomato, a well-known food delivery startup has marked a successful 10-year mark in 2018 due to detailed budgeting and funding through various national and international investors. With a solid funding backup, Zomato currently enjoys a stellar presence across India.
SURROUND YOURSELF WITH EXPERTS AND SUCCESSFUL PEOPLE
The people in your business are everything. Successful companies don’t always comprise of an individual but a group of people motivated towards a goal. The people you choose as a team will significantly shape your company’s performance, values, and ideas. In this era of intense competition, it is imperative to conduct proper research and to consult people who have the expertise, experience, and knowledge about the industry. The business owners can take advice from the experts who keep analyzing the market trend and are updated with the new trends. Have a team of lawyers, accountants, financial advisors, insurance agents who can guide you in the correct direction. Active listening to industry professionals and is actively involved with your company people is key to a successful startup.
BUILD YOUR DIGITAL PRESENCE:
Social media marketing is a huge opportunity for small businesses to connect with customers, grow brand awareness, and drive sales. Businesses leverage digital channels such as search engines, social media, emails, and websites to connect with their current and prospective customers nationally and internationally. A digital presence and marketing are highly beneficial for bootstrapped startups who are looking at relatively smaller marketing budgets. Experts claim that digital marketing costs 62% less than traditional marketing and generates 5 times more leads.
Practo, a health tech company kick-started in 2008 has prospered greatly due to its strong presence in social media space with a series of campaigns, tongue-in-cheek videos, and health events. HubSpot, an all-in-one platform for marketing, sales, and service software that helps your business grow is a pioneer in digital presence. The company claims that more than 75% of their leads come from social media tools and they have as many as 3.5 lakh subscribers and around 2 million visitors on their website.
LEARN SKILLS THAT ARE NEEDED TO BUILD A BUSINESS
As a business owner, you need to build on several skills to run and succeed in your business. Skills such as marketing, and sales pitch, presentation skills, networking, time-management, and work delegation can help you in several ways. Having sound financial management skills will help you run your business profitably. Strong leadership skills will enable you to motivate your staff and improve productivity. Knowing the finance terminology is equally important as it helps you understand your business’s financial future when you meet your investors, bankers, auditors, and accountants and discuss important aspects of your companies finance.
BUDGET AND PREPARE FOR RISKS AND UNCERTAINTIES
Be Prepared for everything, especially the worst. As a small business owner, when uncertainty hits your company, you should be equipped with the necessary tools to survive the threat. Be aware of the latest economic trends and forecasts and make well-informed decisions. Review your business plan regularly and adjust your strategies as per the current situations. Aim at having a strong cash flow position at all times to deal with uncertainties and growth.
Many startups have been affected by the COVID-19 pandemic wiping them out from the business world. The NASSCOM survey states that as many as 40% of the Indian startups may have shut shop due to a decline in revenues and being cash-strapped. Uncertainty is inevitable but being observant will enable you to respond quickly and avoid devastating consequences.
Reach out to us to get clarity on registering your startup and getting your business up from Day 1. Follow our social handles for regular updates.