Many individuals dream of owning their own business but few actually successfully achieve that goal. In fact recent statistics show that only 3% of small businesses make it to the fifth year of operation. (Source Smallbiztrends)
There are a myriad of forces which conspire against your enterprising startup, both outside and inside forces. In this list of the “Top ten tips every startup should know”, we are going to look at these forces in more detail and arm you with the knowledge that can power your startup to the levels of success you desire.
As the age old saying goes “Knowledge is Power!”
Don't be afraid to fail
Now this may seem like a strange startup tip but let’s examine this: the truth is there are many individuals for whom the possible fear of failure stops them from a starting a business; don’t be one of those people! Statistically speaking, the biggest single hurdle every startup will face is not the outside forces such as taxes, laws, or regulations but rather it is the internal forces, your own self, your fear of failure, your concern about the future, and any excuse or reason you give yourself for not starting is going to be the single biggest hindrance to your success as a business.
Although many startups do fail, those individuals who keep at it and learn from their failures become more business savvy. The truly great startups and entrepreneurs learn from their failure and persist so that the next startup works even better. Here is the real kicker – although many startups fail, with each new attempt, your odds get significantly higher that your next idea will be more successful than your last. So don’t be afraid of failure and instead always take it as an opportunity to learn. The biggest hindrance to your startup really is your own self. If you can overcome yourself or your fears and be willing, ready, and able to learn from failure, then your chances of having a successful startup go up astronomically.
Make sure your idea is uniquely yours
Another great tip for startups to remember, especially before they begin investing significant money, is to do a little bit of market research first and one of the most important parts of that is to make sure that the idea is really uniquely yours. You might think you have the next great idea for a product or service and indeed you may. Individuals do come up with unique ideas for products and services all the time; however, doing a little bit of research first can also make sure that you actually are the first person. Many businesses have been started which designed, created, and sold a product only to find that somebody else held the patent on it or have already started selling it before them. Doing a little bit of research first can help save you a lot of wasted effort – and money.
If you do find yourself in the position of finding another company that holds a patent ask yourself the question, “What can I do differently or better than company X?” If you can differentiate your product/service enough your idea could still be a go. However the best advice that can me given in this scenario is to seek legal advice before pulling the trigger.
This builds a little bit out of that last point, making sure that your idea is really yours, and that is if whatever you are selling or the service you are offering is similar to the items or services provided by many others, make sure that yours stands out from the crowd by being unique.
There are a variety of ways to accomplish that; many businesses do it with mascots, while others will entirely design their store or even their labeling so that it is instantly recognizable through icons, specialized fonts or colors; even gimmicks are all utilized by a wide variety of companies to help differentiate themselves from their competitors. Do you want to set up a grocery store in a town that already has two or three? Then bringing in new products or more specialized products can be a great way to help you break into the market. Either by bringing in or being able to get those products that people most want or simply have a hard time getting, especially for truly authentic foreign foods or items, is a good way to help differentiate yourself from a standard store which may serve primarily American items or clientele.
Location, Location, Location
Probably the second biggest hurdle for a business to overcome is a good location. Location really cannot be understated as one of the most important facets of a new startup. You could be the next Steve Jobs and even be holding the next Apple in your hand but if your business is difficult to find, especially as a brand new business, people will simply give up. Visibility is absolutely essential to the success of any new startup and that visibility is not just your physical location nowadays it is even more about online visibility. Although physical location visibility off the main street or in a busy area is a huge leg up to your business success. When people see words like grand opening or opening sales or other promotions, they are far more likely to take a peek inside even if they previously never considered getting that product or service. Use that grand opening goodwill and a solid location to help immediately begin winning new clientele.
Embrace your social media
Nowadays it is a good idea to start embracing a social media campaign from the beginning, even before your physical location opens, to begin building reputation, giving consumer knowledge, and helping to spread the word about your coming products or services. Just as your physical store needs a good physical location for success, the location, location, location mantra just as strongly applies to your digital location and your visibility there. High visibility online is just as important as high visibility in person and maybe even more so because although not everyone will drive by your store, or even notice if they do, people will notice if they are seeing recurring ads for the brand new opening and they are near the location of your store. Keeping ads or information before your clients through the use of social media and internet advertising is a huge way that businesses in this modern day help increase their visibility.
Always be learning
This may seem like a strange tip for a startup but the fact is even if your idea is truly unique, many people have plowed the business grounds before and there are tons of strategies, approaches, and insider information which can be incredibly useful to you. Learning from and talking with other entrepreneurs or other people in your field that you are thinking of going into is a great way to learn some important aspects of the market. If you happen to have friends or family who are already in that market you’re looking to enter, then it would be a good idea to talk with them and find out from people in the know about some of the tips and tricks for that particular field. Of course there’s always general business knowledge like that presented in this article which is good for every business regardless of your industry or service, but there are definitely some niche tricks for each and every industry and learning some of those tips early can help save you from making mistakes.
Learning should be done long before you start putting out monetary investments. You don’t want to start your learning process after you have already got your business started. There will be plenty for you to learn once you really start and you do not need to compound that with trying to repair your business on the fly when a little bit of studying could have saved you a lot of time, effort, trouble, or money and save you from potential failure. Learning and studying can look like any number of things from simply getting books on the topic or subject written by people who have worked in those fields to talking with individuals, going to classes, and even viewing online seminars for your industry or to learn more about your own idea. Having an idea is just the first step; conducting the proper research so you can know how to execute your dream and vision will give you a huge boost and will significantly increase your chances at success.
This is a huge tip for every startup to know even before you begin and that is to count the costs. Most startup businesses are not profitable in their first year and there are a huge number of reasons why. One of the big reasons of course is you’re having to put out capital both into getting your proper licensing, staff training, buying your inventory, leasing your space, and even doing the education as mentioned earlier. All of these are your initial outputs and depending on the kind of business you have, you may have recurring outputs as well. If you have a physical location as opposed to an online storefront then you are going to be paying a regular lease. Even if you are just “online” there will be costs such as having to pay your webhost regular fees to maintain your domain and other technology and developer costs. Counting up these expenses is going to be important as the vast majority of businesses lose money in their first year of operation.
Those who can make it through the first year might break even in their second year. If you can manage to lose in your first year and break even the second year, the goal is to be able to grow it to the point where it makes you some money in the third year. Most small business start-ups fail after 5 years simply because they did not have the capital to be able to continue into profitability. Many of these same businesses could have been profitable had they been able to last long enough to build up a successful client base. This is why it is important to count your own costs and expenses and determine whether you can afford to basically make no money, or in fact lose money in your business for at least the short term.
This is not to dissuade anyone from starting a business as these short-term losses will get made up with long-term success. There is also the possibility that your business may buck the trend and become profitable within the first year. However, you should never assume that yours is one of those and it is a good rule of thumb to expect about a two to three year monetary drought when it comes to your business and even be putting your own money into it. This is why even if you are starting up your own business you should continue to have another revenue source which will help support you and your business until it reaches viability.
Be an answer to a problem
One of the single best pieces of advice for any startup is to not necessarily follow your passion but to be a problem solver. People all over the world have a myriad of problems whether they are social or physical and offering services or products to meet those needs is the pathway to success. Your passion may be pressing flowers and cataloging it. Creating an entire product line designed around this passion of yours is not likely to be one that is particularly viable as the market is simply too small for others who are looking for those exact products or that exact solution. Rather, be looking more at broader problems which affect large groups of people not particular niche markets. Niche businesses are struggling and this is why places like shoe repair shops, scrapbooking stores, and even physical bookstores are largely going by the wayside except in a couple of select areas because the fact is, society and technology have moved forwards.
Finding these new problems and new solutions is a great way for your business to thrive. This is why companies like Google succeeded because instead of trying to solve a problem nobody wanted an answer to, they saw a problem, online organization which was a brand new field at the time, and sought to solve the problems in that brand new field. So either finding innovative solutions to current problems or developing solutions or services to meet the demands of new problems is a huge insider tip for any startup.
Know your legal requirements
This is one area of startups which often people struggle to remember in their zeal and excitement for starting up a new business or service and that is to make sure that they know the legal environment they are stepping into. For instance, if you even want to do something as simple as arrange flowers, certain states do require you to have a license to be a florist. You may feel that your business is something so simple surely there must be no regulations regarding it but that can be a costly oversight as even things as simple as lemonade stands have certain health and safety standards that are required to be met along with getting the business license itself.
Getting the business license, ensuring that your workplace meets the federal and state standards, ensuring that you’re following the regulations required for your work as well as other legal obligations like setting aside money for any employee costs, making sure the appropriate payroll amount is paid for federal and state taxes, ensuring that you keep your business taxes in order and file them regularly, and a whole host of other rules and statutes to follow can feel daunting. However, do not let the size of your requirements keep you from doing what you love or keep you from founding your startup. Many of these requirements only have to be done once and those that are recurring often times have people, programs, or services dedicated to assisting you with those recurring costs or rules.
Don't get ahead of yourself
As we have seen, there are certain steps to take for your startup such as doing your research first, learning from people in the market, learning the right rules and regulations, getting your business license, etc. Doing these in the right order and following the right procedures will help ensure that you have learned each step before you go on to the next. It can be very exciting to build, design, and develop a web page or start moving items into your storefront but if you start doing that before you have completed some of these other ones then it can be a costly mistake as at some point you will have to do your learning and get your business licensing and it is far better to do that tedious stuff while you are not paying rent or employees.
With all that being said, if you follow these simple tips and tricks you will be well on your way to having an incredibly successful startup. Remembering to do stuff in the right order, making sure that you count the costs of operations and that you have a source of income or savings to cover it all, making sure that your physical and digital locations are set up well and not allowing apathy or fear to keep you from pressing forwards will be more helpful than you can realize right now. Keeping these tips in mind can help your business be one of the ones which succeeds where others failed.