How to Run a Successful Business
Generally speaking, more startups eventually fail than succeed, and while it is sad to see an idea fail it is also crucial to learn from the failure. Usually, the question becomes ‘what factors contribute to why startups fail?’ But the more appropriate question should be ‘what we can learn from failed startups?’ More often than not, some reasons contribute to a startups failure, and these same reasons are learning opportunities for you to improve the chances of success for future business ventures. The purpose of this article is to learn valuable lessons from failed startups, understand why startups fail and how to run a successful business by applying these lessons. Below are the lessons you can learn from failed startups:
1. Receive customer validation for your product/service
One of the main reasons why a lot of startups fail is that they produce their product or start offering their service without even first making sure that the customers in their target market want what they are offering. Therefore, before doing anything else, make sure that you understand your customer’s wants and needs without copying what some other company is providing or has attempted.
As an entrepreneur, you should always do something that is unique and different from the competition. Embrace that and always test your service or product on a small scale before going big and spending too much time and money.
2. Keep your operating costs as low as possible
At startup level, you don’t need luxuries like fancy offices and nice chairs. You should keep a close eye on every operating expense. Surprisingly enough, you can negotiate prices for almost all expenses. No matter how small the negotiated discount, take it because ultimately it will add up to a lot of saved money that can be used later on a rainy day, or rainy month(s).
3. Make sure you are not serving a small market
While it is essential to serve the market that is interested in your service or product, it is equally important to make sure that said market is not too small to support profitability or growth efforts.
Hence, it is crucial to remember that there is no such thing as too much market research on a startup level or any level for that matter. Market research can help you understand if the target audience will welcome your initial launch with open arms. Also, research the prospect for future growth and the efforts your competitors are making in the market.
4. Double down on sales when things get rough
When things get rough, the wisest thing to do is cut down on costs as much as you can. This situation requires you first to be proactive and then ready to do what is counter-intuitive. Spend more money on sales. Put all your focus on sales because if you have a decent product or service and you are still not generating enough revenue, then the problem is concerned mainly with sales. So, hire and invest in an excellent sales and marketing team.
5. Understand the importance of co-founders and put together the perfect dream team
An entrepreneur understands that he or she is not capable of performing all the tasks required to run a thriving startup. Specific duties may lie beyond a founder’s capabilities, so it is unwise to run a startup as a one-man operation; this is why most successful startups are a team effort.
Every member of the team brings a unique skill to the table and you, as the founder, should have the ability to put together a dream team of excellent individuals, and you should also be able to harness the team’s strengths to lead the startup to success. Technical skills, creativity, communication skills and other traits are highly valuable and should be sought after when putting a team together. Also, remember to allocate specific tasks to people based on their unique strengths.
6. Focus on the company’s finances
Raising funds can be an excruciatingly long process. You can pitch your ideas to over a hundred venture capitalists, and maybe only one of them might find it interesting enough to invest in, so be prepared to stare into the eyes of defeat on a regular basis before finding a victory.
Remember that without money you can’t sell your product or service to even the first customer. You also need enough funds to keep your startup alive till you are healthy in profits and additional funds may be required for growth, emergencies, etc.
7. Marketing, marketing, and marketing
Assume you have an excellent product or service that caters to a broad market which is readily willing to accept it, but your startup still fails because the audience does not know about it; a primary attribute contributing to this failure is an ineffective marketing strategy. Many startups fail because they do not invest too much in marketing and rely on word-of-mouth alone. Word-of-mouth can only get you so far, so you should plan a massive and effective marketing strategy.
The internet is an excellent tool for digital marketing, but it is advisable for you to hire marketing professionals with experience in digital marketing who can bring you the benefits internet marketing has to offer most cost-effectively.
As you can see, failures can prove to be valuable learning resources, and the lessons they teach are essential in how to run a successful business in the future, along with following other good startup practices such as writing a good business plan, etc. However, it is still best to learn from the failures of others so that you avoid failures of your own.