All entrepreneurs can tell you a thing or two about failure. Although we live in a world in which nine out of ten start-ups are doomed to fail, we do have the advantage of learning from past mistakes. Thanks to research conducted by Shikhar Ghosh, a senior lecturer at Harvard Business School, we can now more easily identify why new venture-funded start-ups seem to fail or success. We have prepared five tips which will allow you to run your small business more successfully and efficiently.
1. Evaluate and Trial Your Idea
It’s not uncommon to hear that one of the leading determinants of a business succeeding or failing is whether an entrepreneur rushes into a concept without carefully thinking it through. While enthusiasm and optimism are needed, research is indispensable. So, before you jump off your Nectar mattress and run out the door to start your business, take a breath and evaluate your idea.
We are not solely referring to using social media or the internet as your primary means of researching. Instead, talk to different business owners and customers to get their take on your business approach. You might even talk to someone completely outside your business but whose professional counsel you trust, like your personal injury lawyer. You want to get as much insight as possible. In fact, sometimes you might need a couple of years before landing the perfect business opportunity and tailoring it to your client market. Imagine that as the ideal time to test recipes for success and the chance to refine your business model.
2. Understand Your Target Market
There is no one-size-fits-all when it comes to business. The ability to conduct research and gain valuable experience from experts will also mean that you acknowledge your market and are prepared to offer it excellent services and products. For many new business owners, concepts such as sales per square foot and inventory turnover are unheard of. A bit of extra studying will go a long way and will also improve your confidence. If not for any other reason, you gain the chance of developing long-lasting relationships with suppliers, customers, or potential investors—some which you’ll be able to use as time goes on.
3. Test Different Business Structures
Failure to prepare is preparing to fail, and that’s why people already in business will tell you that a business structure is vital to a start-up. Not only will it have tax and legal implications, but it will determine the way future decisions will affect your capital and exit strategy. Experts agree that most start-ups should either start operations as an S Corporation or LLC—as they are easier to manage in comparison to a C Corp. As a start-up, you can also consider operational costs ahead of time and plan to save by outsourcing.
You also want to ensure that you have the best structure for your business’s website. And if you aren’t thinking about setting up a website, you’ll want to reconsider. Even if you don’t start an e-commerce business, most consumers nowadays look to the internet to find anything from plumbing or painting contractors to childcare and tutoring. Before you even begin to set up a website—and even if you already have—consider if the web hosting service you have is suitable for the type of business and online traffic flow that you anticipate. Are you using Siteground or Bluehost? Or are you still researching the best UK web hosting? Take the time to research your options to decide what kind of web hosting will best complement your business structure and goals.
4. Adapt to Current and New Technologies
Business decisions should always be flexible. After all, we are unable to predict what the future will bring, and that includes technology. Take advantage of new and current technology trends, such as by harnessing the power of social media or optimizing your online presence. Nowadays, social media makes it easier than ever to connect with potential partners, promoters, providers, and clients. And with effective SEO strategies, it’s even easier for consumers to find you, saving you the time and money on actively pursuing customers. Sites like Scott Keever SEO and Top SEO Brisbane can take the hassle of search engine optimization and do it for you. Moreoever you can incorporate the use of SaaS (Service as a software) to your business operations. With SaaS you can easily make some processes more efficient such as contract management or contract reviewing, which typically takes a lot of time to do. By using GatekeeperHQ’s Contract Management System you will be able to save more time, and with that extra time you can use to scale your business
5. Determine Who Your Future Customer Is
For many new entrepreneurs, concentrating on operation details typically takes priority. While there is nothing wrong with focusing on these aspects of your business, it’s crucial to understand that customers will either make or break your company. In other words, ensure that you understand the psychology behind purchase decisions, what your competition can offer, and what you can provide to increase your target audience’s incentives. Whatever answer you come up with, be sure that it has grounds for market testing and research—rather than guessing.
You might be saying to yourself that you’ll get there once your business is up and running. However, many new owners find themselves overwhelmed or consumed with operational details, which although simple, are increasingly time-consuming. This will leave you with little time to make necessary adjustments, and after all, they shouldn’t be left to chance. The ability to implement the right plan when starting out is much more likely to deliver successful results rather than thinking on the spot and regretting it once it’s too late.
If your start-up succeeds, pat yourself on the back—you’ve done something far better than 90% of new entrepreneurs. However, it won’t all be down to luck, as these five tips are just the starting points for a successful business. If we were to leave you with another piece of advice most don’t account for, it would be to surround yourself with like-minded and supportive people.
We’re not talking about false positivity or even “yes” men. By contrast, we’re talking about building the mindset of success, not having to waste your time or energy on the defense. While some friends or family member will fail to understand your business goals, chances are you can find entrepreneurs who will lift your spirits and provide encouragement. Just remember, while a dose of reality is much needed, optimism is also crucial.