Startups are what the name suggests, starting an enterprise from scratch. If you are planning to strike off on a journey of entrepreneurship, then you should be passionate about your product or service, disciplined, hardworking, and have a financial plan chalked out.
About 90% of all startups fail. Hence, you must persevere in your passion and start right. Only 2 in 5 startups are profitable, and other startups will either break even (1 in 3) or continue to lose money (1 in 3).
Here are a few essential ingredients to make it in the startup world
Do not follow the herd. Go into entrepreneurship if you believe in it implicitly. You don't need to have a unique business idea, but what it needs to do is fill in a niche or a gap in the service industry or product cycle.
Doing thorough research and number crunching regarding the market size, customer base, industry growth figures helps. Study the numbers, future prospects of the space you intend to enter into.
Essential For Startups to Succeed
Since you plan to get into the business, we presume that you have your funding worked out. Is it going to be a business loan? Then you need to work out the interest rates and installments.
Be informed of any government schemes or relief that is available to you. If you intend to use your money, then budget it well. It is not a continual source of money, so every dollar has to count and earn its worth.
Crowdsourcing is another method that is increasingly being employed for funding. But for that, you need to show a well-executed product or service.
Make the Money count
A fundamental business rule is that you need to put in money to earn more money. Once you have your money sorted out, get a financial plan or budget ready.
Do not make the mistake of going on a hiring spree or setting up an office. First, set the enterprise up. Decide on priorities and the bare essential team that you need.. Hiring indiscriminately and spending money on salaries is not conducive to good budget practices.
If you are not good at managing the money, then take professional advice.
According to a market research company, running out of money is the second most common reason for startups failing. Almost 20 percent of startups fail due to this reason, it says.
Many startups get taken up with setting up the business, getting a customer base, and talk about monetizing it later. This is a fallacy; every enterprise needs to be earning from day one. Monetize the idea rather than run an experiment.
Most people are so taken up with their idea that sometimes they miss out on the pitfalls. If you realize halfway through your journey that the plan needs to be tweaked, abandoned or drastically changed, be prepared to incorporate all such hiccups.
A business evolves as it takes shape. Your idea may need a bit of tweaking or even some drastic changes once you start a business. The trick is to be able to adapt and innovate. Do not stick with your idea and refuse to change your path, otherwise, you may end up being a part of the failed statistics.
It would be best if you continuously were on the lookout for ways to adjust and make changes, rather than letting your emotional connection to the idea or process get in the way.
Another reason that 42 percent of startups fail is that they misread the market demand.
You should have goals and achievements figured out at the outset. A business action plan needs to be in place. it is easier to miss the trees for the forest. But it is the small bushes and saplings that grow to be the fruit-bearing trees.
Hard work, and not getting disheartened by small failures is what defines persistence. Learn what needs to be done. If in the journey, you need to do some heavy lifting on the job, then learn the skills or apply them or gather experience to do it right, but persist in your goal. The process may take time but see it through.
Two percent of successful business owners admitted that they had the right qualifications and backed up experience to run a company, even with limited cash flow.
Making use of professional networking sites, business connects, industry events, and being part of professional groups, is essential to stay relevant and informed.
Right from financing to marketing to supply chain building, if you know the people, then the process becomes more manageable.
In today’s world, it is essential to have a digital presence. According to KPMG’s 2017 Global Consumer Report. , almost 50 percent of consumers search online for a product or service, and 47 percent visit the company websites, so having a good digital footprint will help your business.
Your business should be scalable and not replicable if you want to succeed. If you are in an organic products business working int he cottage industry space, then scaling and duplication are an ever-present threat. Many businesses are selling the same product, so you are always under threat of being swallowed up by a bigger producer or unable to scale up production to meet the demand to compete.
It is a fine balance that one needs to tread if you are not in a unique product/service space.
Do not scale up prematurely, the financial strain will slow you down. First, build up a strong presence, consolidate, and then start the hiring process and team extension. Focus on a market segment and learn the ropes. Once you have found your feet, then only think of expanding.