What makes some startups succeed and others fall apart? Why do some young companies flourish and others simply fade away to nothing? Is it know how, luck, or fate? Is it about whom you know and shaking the right hands? Maybe it has to do with having the right product or service? Unfortunately, there is no real formula that can predict what fledgling companies will rise, and which will fall. There are a few commonalities, however, among those that make it through those first crucial years, and having some understanding of these building blocks to success, is vital to anyone planning to start a company or improve the health of their current startup.
1. Your Idea Should Be Good : This is a not facetious heading. A good idea addresses something that is either not readily available already, or solves a problem for a wide range of potential customers. You must set a high standard for yourself in producing your product or handling your service, so that customers will want to come back and bring their friends. A good idea is, simply put, one that attracts people.
2. Avoid Being Precious: You have a great idea, but you don’t want anyone to know about it because they might steal it from you. You go to VC gatherings, but you require that every potential investor sign a non-disclosure agreement. You carry your idea around like a precious egg and only talk about how great it is with everyone, but you never reveal any details. You are pretty much destined for failure. Actually carrying out your idea, to some representative level, is the way to attract investors. Asking a potential investor to sign a non-disclosure agreement, while your idea is still a bunch of pie charts and PowerPoint presentations will get you nowhere. Investors want to see that you can create a plan and carry it out, so actually executing part of your startup business plan is incredibly helpful in securing the support and trust of investors.
3. Rely On Yourself: Pursuing investors and having them sign on, means that you will have to pay them a return on their investment by a certain date. This can utterly sink a small startup if it takes longer to achieve success than originally planned. Finding a way to launch your business without massive investment from outside sources is a great way to protect yourself, as it causes you to be more thrifty and creative with your initial monetary outlay, and consequently, the damage done if your business fails will be quite a bit smaller. While it may mean that your business takes longer to get off the ground, it also means that you have no one to answer to but yourself, and sometimes having sole ownership is well worth the patience required to build capital.
4. Hire Wisely: Your startup business is your baby, so of course you are quite enthusiastic about it. Finding staff that is equally invested in making your idea work is vital to getting your business entity off the ground. Actively seek out the people who are as obsessive as you are about getting a line of text to read perfectly. Find that one designer who will not stop until the visual representation of your company is stellar. Weigh personality types against technical knowledge, and hire people that will not only churn out good work consistently, but will work well together while they do it. Shop around. It is like trying to furnish a house. Look at all of the sofa sets before you buy one.
5. Market, Market, Market : Just because you have a great idea, an office, and nice people in it, this by no means guarantees that you will have customers. It is up to you to use whatever means necessary to get your product or service out to the public. Whether it is through viral campaigns, blogging, articles, more traditional newspaper, radio, and television advertising, word-of-mouth, mailings and e-mailings, telling the world about what you have to offer must be an area of focus during the early stages of your business. You need people to know about you early on, or, odds are, they will never get a chance to get to know you.
While the steps outlined above seem like common sense, many fledgling businesses somehow skip them. While they are not “The Holy Grail” of startup success, they are functional markers. Most businesses fail, so if yours does not work this time around, try, try again. With a good idea and a lot of commitment, there is a chance you can become one of the success stories.
Author: Susan A. Black is a family gal and successful freelancer (or at least she likes to think that). She writes on behalf of a large sofa sets retailer and numerous other business and personal sites.