Last year an average of 514,000 new American startup firms launched every month. However, statistics show three out of four of these companies will fail. Following these rules will give yours the best chance of beating the odds.
Think Passion, Not Profit
It takes the average startup company between three and five years to become profitable. During those early few years, you can count on working 60- to 80-hour weeks. You can also forget about taking vacation time while you’re working to establish yourself. If you’re not passionate about what you’re doing you’re bound to burn yourself out. While finances are important for any business, you’ll need more than dollars and cents to keep you motivated.
Build Something That Will Last
It takes about 18 months for most startup companies to hit their stride, and as outlined above, even longer to become profitable. So it’s important your concept is still relevant after that time has elapsed. You may think that capitalizing on a current trend will excite people, but on this timescale they may not know about your brilliant idea until it’s fallen out of favor. It’s crucial to think about long-term solutions to make sure your startup enjoys longevity.
Don’t Undervalue Your Products or Services
While profits shouldn’t motivate you, they’re obviously important for your firm’s success. Far too many startup firms charge too little for their goods and services to try to entice customers. Be realistic about what your product’s worth, and don’t undersell yourself to get ahead. It’ll only undermine your credibility and bottom line in the long run.
Opt for Open Plan Instead of Closed Offices
In its International Workplace Studies Program report, “Offices That Work” of Cornell University found open plan offices encouraged more frequent communication, better team building, and quicker problem solving and conflict resolution than closed office environments. All these are important benefits for startups to consider, as the team must work together to achieve success.
Look for Cheap Marketing Opportunities
Generating brand awareness is crucial for the success of any startup company, but some advertising avenues are pricy. Instead, look to social networking websites like Facebook and Twitter to connect with new clients. If your business has a local focus, printing fliers and posters is another relatively inexpensive way to advertise.
Build and Protect Your Brand
Benjamin Franklin once said, “It takes many good deeds to build a good reputation, and only one bad one to lose it.” Advertising may sell your product, but creating brand loyalty takes a bit more effort. Participating in community activities, donating to charities, and engaging with your customers via social networking sites and email will help you build your brand.
Of course, a social networking presence can expose your firm to criticism. However, engaging with this criticism in a timely fashion can protect your brand. Forty-six percent of customers say they’re pleased when a company responds to their complaints. Twenty-two percent even post positive comments about the firm after the exchange. The Reputation.com news and events Facebook page can keep you up to date with the latest issues surrounding brand protection.
The rate of startup failures is daunting, but with a little knowhow your company doesn’t have to become another sorry statistic.
Lauren Katulka is a happily married freelance writer living on Australia’s Central Coast. When she’s not playing around with words she loves spending time in the kitchen, watching indie films and cuddling her Devon Rex cat, Gizmo.