The path to riches sometimes runs through a startup. Anyone who doubts that assessment can look at the life and career of Steve Jobs. Apple, however, isn’t the common example of the average startup. As the Dot.com bubble of years past proves, startups can crash and burn without warning. How can an entrepreneur determine whether or not a startup will succeed or fail? No proven formula exists to determine where a startup’s fortunes are headed. However, history comes with many lessons about what particular companies did fine as well as those that faltered. Looking over these tales of success and failure helps entrepreneurs gain insight into their own startup endeavors.
Launching with the Right Amount of Capital
A lack of proper capitalization can be the death-knell for a small business. Granted, overspending does not help maintain the fiscal stability of any startup. So, spend wisely. Startups must run on a frugal budget until cash flow increases. That said, a lack of funds undermines the business’ ability to pay for necessary marketing and operational expenses. Before opening the doors of any new business venture, be sure the necessary amount of money to run things is in place. Otherwise, running up debts becomes unavoidable.
Maybe starting out small would be a good plan. Chances of earning a profit increase when the business doesn’t need to spend too much money. A slow expansion could prove to be the workable strategy.
Make Sure Legitimate Customers Exist
Do not assume the customers automatically exist for a startup. Also, try to avoid guessing how enthusiastic they will be about spending money. If a strong customer base exists, a startup could very well be a big hit from day one. Conducting legitimate market research, however, would help with gauging customer interested Conducting legitimate studies on a market research platform, however, would help with gauging customer interested in how strong that interest is.
Sometimes, a startup really does hit in the right idea at a time when customer wants are huge. Just look at all the amazing apps that capitalized on consumer niche demands.
Devise Effective and Careful Planning
Success in business requires deliberate action and careful planning. The opposite of this approach would be a haphazard reactionary strategy. Of course, such a strategy really isn’t a strategy at all.
Those who choose to plan out their approach to running and managing a business establish a definitive direction. Each and every day, the management at the startup can review progress levels to see if things remain on the right path. Without effective planning, this step would not be possible. Managing the startup in the direction of success then becomes more complicated than it should be.
The Business Embodies Integrity
Entrepreneurs news to the world of startups might look at the entertainment industry as a guide. Those morally ambiguous characters on the silver screen may very well achieve their goals. Don’t confuse melodrama with the real world. In business, partners, employees, customers, and others want to deal with someone who embraces honor, honesty, and integrity. A person of dubious character comes with too many risks. When others simply don’t want to deal with a person of questionable character, a business becomes somewhat isolated. Growth suffers. Conversely, someone who has a stellar reputation and known for his/her integrity attracts others. Success, while not guaranteed, might be more likely for this type of person.
Established Lines of Communications
Communications skills play a big role in all facets of business success. Creating a strong social media presence that consistently gets out good news and PR about a startup helps with marketing. Interactions with customers on social media and elsewhere makes them feel their business is welcome. Customer loyalty derives as a result.
Effective communications in simple day-to-day interactions shouldn’t be overlooked either. Do you speak clearly and in a distinct matter? Do your words come off as positive and encouraging? Strong communications skills count for a lot. These skills might help move things forward at strategic times when the business needs such success.
by: Kevin Faber