Caption: Approximately half of all businesses fail within their first five years
Sadly, not all businesses will survive their fledgling years. According to the Small Business Association, 30% of all new companies will fail within their first two years, while 50% will close their doors for good within their first five years.
As you’re likely feeling deeply passionate about your venture, having invested your blood, sweat, and tears into getting it up and running, you must now take steps to secure its longevity. To learn how to do exactly that, read the below tips on how to survive the start-up years.
Create a Strong Business Plan
If you want to develop a forward-thinking business, you’ll need to write a strong business plan. This in-depth document should detail your start-up costs, marketing avenues, investment opportunities, and financial projections for the next three to five years.
If you fail to develop a rock-solid strategy, your company might lack direction, which could result in you losing track of your cashflow, failing to identify your target market, or struggling to grow your annual revenue.
Overestimate Startup Costs
It has been reported that a startling 82% of small businesses often fail due to poor financial management. To ensure you never become a statistic, you must be realistic about your startup’s expenses, which could help your venture remain firmly in the black.
Startup costs you should not overlook include:
- Employee salaries
- An office or building lease
- Administrative requirements
- Research and development
- Maintenance and equipment
It’s also important to separate your personal and business finances. For example, you wouldn’t want to confuse the cost of groceries, household bills, and leisure costs, such as takeout, clothing, and online poker games, with your company’s revenue. It might, therefore, help to open separate bank accounts to take control of your finances.
Take a Break
While you might be eager to build brand recognition, secure new customers, and grow your annual revenue, you must take a break every once in a while. If you routinely fail to relax your mind and body, you shouldn’t be surprised if you feel burned out and without passion for your company.
For this reason, you should perform activities that allow you to unwind and de-stress regularly, such as enjoying a hot bath in Epsom salts, reading a fiction book, watching a movie alone or with your loved ones, or taking a stroll outdoors.
It might also help to reconnect with friends, so you can chat, laugh, and confide in those closest to you. For example, you could meet with your best friend for a coffee, gather your close-knit group for a dinner party, or enjoy a romantic meal with your other half at a local restaurant.
If, however, you want to have some fun and distract your mind from your growing to-do list, you could invite them to your home to play poker games, such as Omaha hi-lo or Texas Holdem. Alternatively, you could gather your nearest and dearest together for a fun game night of Monopoly, Scrabble, or Game of Thrones Risk. In short, pick whatever activity works to get your mind temporarily off-business.
Caption: 95% of professionals believe face-to-face communication is essential for a company’s long-term success.
Network with Industry Professionals
Networking is essential if you want to develop a profitable business with a positive reputation, as it can lead to powerful industry collaborations, a more extensive customer base, and many client referrals. To form rock-solid connections with other companies and hard-working professionals, you should regularly attend various industry events, conferences and exhibitions.
Don’t forget to promote both yourself and your company on social media, too. For example, you could catch the attention of other entrepreneurs on LinkedIn, or you could cold-email industry thought leaders or potential business partners and invite them to a meeting, a cup of coffee, a corporate dinner, or even a friendly game of poker that will last long into the night. The more informal the occasion, the better.
Take Calculated Risks
Running a business is a little like playing high-stakes poker. The bigger the risk, the bigger the reward. Similar to the likes of Texas Holdem, you will need to calculate the risks to identify whether to increase your bet or fold. If you fail to do so, your company might never reach its full potential.
You will likely need to make some big decisions when launching your venture, which can be daunting. Always weigh up the pros and cons of every decision, consider the potential pitfalls, and have a backup plan in place should the worst happen.
There is no reason to jump into a business venture with both feet. It might help to start small and gradually grow your business. It can take time to come to grips with an industry, find new customers, and build your reputation, so you don’t need to invest every single penny you have into the company until you’re ready to do so.
Take your time when developing your branding, learning from your mistakes and growing your customer base organically. A slow and steady approach could lead to a stronger business model, a powerful brand and a more considerable profit margin.
It is crucial to regularly solicit feedback from your customers, as this will help you to maintain satisfaction, secure their loyalty throughout the years, and fill a gap in the market.
While online reviews can help you to gain an insight into their experience, you also should send private questionnaires or surveys to find about more about the positive and negative aspects of your brand. By understanding where you’re going right or wrong, you will be able to continually meet their needs and resolve their problems.
Avoid Expensive Marketing Campaigns
Many entrepreneurs are often so tempted to promote their business that they choose to invest in expensive marketing campaigns, such as TV advertisements or billboards. However, if an ad or tactic fails to pay off, it could potentially place a startup in financial uncertainty.
For this reason, you should aim to utilize both free and affordable marketing methods. For example, you could promote your business organically on social media, publish engaging guest posts on high-authority websites, secure free press, or create a compelling email newsletter.
So, if you want your business to enjoy longevity in an industry, you should follow the above top tips on how to survive your startup years.