10 Step To Startup SuccessHome > Free Business Articles > 10 Step To Startup SuccessNothing is certain in business. Even with your great idea, thorough research and hours of work this rule will remain true. There is no way of telling if a new product will succeed, how investors will recieve a startup idea or whether a company will last past the one-year mark. However there are ways of increasing the chances of your business success. Whether it is trying to turn a web visitor into a customer, getting a purchase order out from a cold sales call or maintaining a stress-free lifestyle, you'll face a series of challenges and opportunities to make the leap to success. These steps will help you increase the odds of you beating the odds. 1. Build to Last According to the SBA Office of Advocacy, over 50 percent of companies don't survive past four years. This is better that the outdated notion that 90 percent of startups fail in the first year. But the odds can still be against you, even if you plan for the long term. However, serious startup entrepreneurs don't let those kinds of statistics stop them from realising their dreams. By staying focused and keeping the passion that runs in all entrepreneurs, you can survive through the bad times when others fail. You can further improve your odds of lasting by building a strong management team. The foremost weakness many entrepreneurs have is they don't have strong, deep experience in the industry they are entering. You can overcome this shortfall by recruiting experienced team members, or getting experience yourself by working in your chosen field for a while before starting your business. 2. Get Investors Venture capitalists fund just one of every 100 business plans they recieve. Improve these odds by approaching the right investors. Check venture firm website to see if they invest in your industry and in companies at your stage of growth. If possible, get a reputable person to personally deliver your proposal. Someone the firm respects will get the attention of the venture capitalist, and the business plan will at least get looked at carefully. Also, ensure that the presentation you give your investors is welled planned pout and delivered with passion. That will help you stand out from the pack. 3. Develop the Right Products Most new products fail, primarily as a result of companies not paying enough attention to customers. You may develop a technology that does something faster or a little cheaper or maybe in a more high-tech way, but people don't buy products for those reasons. They buy products because they're the right tools for them. Research and talk with customers in depth and on an ongoing basis to find out what they need and, just as important, how to craft a story that convinces them your product is the one for them 4. Make Cold Calls Only about 4 percent of cold calls are likely to turn sales. To beat these odds, you can generate better leads by carefully searching the market and warming up cold calss with a blended marketing campaign of e-mail, regular mail and other channels. That should mean 12 percent to 20 percent of sales calls produce a hot prospect likely to buy. But sales will still come down to pure persistance. Finally, instead of just plowing through your cold calls, take time to listen to your prospects and allow them to express their needs. 5. Convert Web Visitors to Buyers For every visitor who buys from the typical e-commerce website, 40 leave without ordering. Conversion rates for most websites are stuck in the low single digits. For the past few years they have been hovering around the 2.5 percent. What entrepreneurs need to do is build visitors' confidence and trust while measuring and testing to find ways to make navigation more intuitive. Also, highlighting key information areas such as shipping and return policies can increase conversion rates. 6. Reduce Turnover Costs To replace an employee lost to turnover, it can cost from 50 percent to 300 percent of that employee's annual salary. Costs can be less for lower-level employees and highest for senior executives, but which ever way you look at it, turnover is no bargain. If the area where you're business is located is sparsley populated or if you don't think the staff you are hiring will work out, and so you don't train them properly try outsourcing. Hiring well-trained motivated contract workers from around the country is one way of coping with a high turnonver. Another way to reduce turnover costs is by training and cross-training employees thoroughly and developing career paths to keep them engaged. 7. Finance Yourself Many a startup entrepreneur has asked a bank for a loan only to leave shaking his or her head with the new-found knowledge that banks wont readily loan to companies that aren't established. Breaking this paradox requires starting small with whatever you can raise from other sources, growing gradually and building up both assets such as accounts recievable and your own personal equity in the business. This will then put you in an attractive position in the eyes of the banks. 8. Raise Your Net Profits The average sole proprietorship returns just 21.5 percent of revenue as net profit. But startups can boost profitability by picking industries with better-than-average margins. Look towards emerging industries where demand exceeds supply and where they typically have high profit margins. An good example is the PC industry in the early years. 9. Put the Banker on Your Side According to the U.S. Government Accountability Office,minority- and women-owned startups are significantly more likely to be denied credit. One way around this obstacle is to find a banker you can relate to and develop a personal relationship. Recruiting a banking advocate can help overcome a lot of red tape and inertia. 10. Balance Work and Life After staring a business, entrepreneurs are often challenged to maintian a life. A 2005 survey by Wells Fargo Bank and The Gallup Organization found that 57 percent os small-business owners work six days a week; 20 percent work seven days. The average workweek was 52 hours, and 14 percent took no vacation. But entrepreneurs can beat stress, as 67 percent were content with their work-life balance, and 84 percent would do it all over again. Involve family and friends to create a support group, and join local organizations where you can find kindred spirits, such as your chamber of commerce or the National Association of Women business Owners. Build work-life balance into your business plan by knowing your work tolerance and picking a suitable business. If the industry norm is working seven days a week then make sure you are aware of that. 
|
