By Isabel Wiliams, a guest contributor and co-founder of BizDb
The popular belief holds that the small and resource efficient companies we call startups can easily lead entrepreneurs to success. The truth is, starting and running a thriving startup is not simply matter of materializing an idea with great potential—it’s also about being on top of all the different requirements of entrepreneurship. Here are some practical tips on how to establish a startup and ensure its success at later stages of its operation.
1. Know Your Market
So, you’ve got this great idea for a product and are ready to make it real? Hold on. Take a moment to reflect on the following: Will anyone want to buy it? You might be all enthusiastic about making your concept a reality, but selling what you like is no guarantee of success.
Instead, you’ll need to research your market enough to get an idea of what people actually want to buy. Instead of creating a new category with no proven market behind it, try reframing your idea to fit an already existing demand. Filling a niche in a large market will yield better results than owning a big part of what has no market behind it.
2. Test Your Product
It’s smart to build a customer base even before you market your product or service, simply because your business can’t survive without it. Try giving away your product for free, always in exchange for an honest review.
Testing your product or service is important—not only will it grant you insight into what the consumers like or dislike about it, but additionally spread the word around – especially if some of the people in the industry get really enthusiastic about it.
Bonus point? It’s never too late to get started on your marketing—do the networking, make some valuable contacts and don’t shy away from talking to people about your product.
3. Cash Flow
Businesses can’t survive long without cash flow. There’s simply no other way to feed your bottom-line profits and ensure the smooth operation of your startup. There are basically two ways to secure some cash for your business. You can do it either through deposits, with an insured delivery by a specific date, or through continuity programs where your clients pay up-front a fee (monthly, weekly, you name it) in order to ensure the availability of the products or service on a regular basis.
As an entrepreneur, you should be ready to creatively deal with various issues—among them, coming up with different ways of getting cash up-front and ensuring that the cash gap will never become a serious concern.
4. Keep Your Costs Low
You’ll only benefit from your cash flow as long as it’s positive—in short, if there’s more of it coming into your company than going out. One way to do this is to keep your expenses and operation costs low. Furnishing your office or retail space with used items is not a bad idea, for instance.
Other than that, you can try to change the ways you do business with other entrepreneurs—paying them up-front will open the door to negotiating better prices (especially true in today’s economy). There are many creative ways of financing transactions out there that can help you to save up on your operation costs—have a look around the web, research the new ways in which entrepreneurs finance their ventures and find some inspiration to apply in your business.
5. Focus on Marketing
Many young businesses fall victim to the conviction that the right amount of investment in their brand will automatically generate sales. This simply isn’t true. You can really benefit from all that money allocated in getting your brand right if you use it instead to buy new customers. Brands are never built from top-down—they grow from grounds up, all the while surviving thanks to the leads converted into sales.
In order to generate sales, you’ll need a well-developed marketing and sales funnel that can be adjusted to any change of the market. It should be easy to re-fit, measure and test—no only for you, but anyone working for the success of your startup.
6. Plan Wisely
It’s best to underestimate your revenues and overestimate your expenses. This doesn’t mean you’re free to get all pessimistic about your venture or that you should accept those numbers at all. Planning your operations on the basis of this information will help you to prepare for the future—whatever it may be.
Having an idea about your prospective revenues will help you to prioritize your activities and efforts applied to sales and marketing. Knowing the upper margin of your potential expenses will allow you to monitor and control your spending.
7. Learn and Grow
Running a successful business means you’ve got to be ready to learn new things about sales and marketing every day. You can either do it on your own or hire an expert who will act as a mentor figure, helping you to re-examine your current ways of thinking and inspiring you to take a leap and develop strategies that can take your business to the next level of success.
8. Test, Test, Test
Measuring and testing should become a regular activity—how else will you know if your business is running smoothly? It’s only through testing that you’ll be able to tell that your marketing strategy works great for your product and really engages consumers. Every big step or decision needs to be properly measured and its results tracked—this information will help you to choose the right course of action.
9. Resource Efficiency
All entrepreneurs know the value of time. Getting things done faster than your competitors, using your time productively and avoiding delays is what makes up for a successful startup. If you’re afraid of making mistakes, remember that high level of productivity gives you a chance to correct them and develop new solutions much faster—you’ll never lose the game.
10. Time Management
Your potential for success as the owner of a startup will depend on your ability to use scarce resources in order to achieve as much as possible. Expect the reality of running a budding startup to take a toll on your life—you’ll probably never have so many different responsibilities calling for your attention at the same time. Being able to correctly prioritize your activities and focus on those that are of greatest importance are simply crucial to success.