It is a general rule that 96% of all businesses fail within their first 10 years, which is startling statistic that has the potential to deter entrepreneurs from entering a specific marketplace.

It also has to be placed into context, however, as there remains an overwhelming number of factors to consider when launching a new venture, and those who prepare fully for these have a far better chance of succeeding.

New business owners must also be able to prioritise, and distinguish between the strategic elements that will drive their venture and those that play a less pivotal role in securing growth.

So, what core areas should you focus on to ensure that your startup’s foundation is rock solid? Let’s take a look: –

Establish your business with a viable (and scalable) growth plan

Ultimately, one of the core reasons that businesses fail is a defined lack of focus. After all, how can you lay the foundation for your business if you have no indication of where it is going to be in three, five and even 10 years’ time?

So before you launch your venture it is imperative that you lay out a detailed and defined growth plan. This not only ensures that you establish the right building blocks for your future, but it also guides your decision making in relation to the businesses philosophy, product ranges and marketing drives.

There are several elements to this, with one of the most important being the location in which your business will operate from. While you may be starting out as a home-based venture, for example, it may also be your ambition to expand into a commercial space before eventually developing a smart and intuitive office.

You will detail this in your business plan, while introducing time-frames and any associated costs. This is then a viable objective you can work towards, in line with the organic growth of your venture and external, market conditions.

Develop a viable infrastructure and cost-effective workforce

The issue of organic growth is a compelling one, as this remains the key driver of long-lasting companies. This is not possible without a clearly-defined infrastructure, however, or a cost-effective workforce that can meet the demand of your customers while also maintaining a desired profit margin.

In terms of the infrastructure that you put in place, this will depend on the size and the scale of your venture at the time of launch.

Larger start-up will need a support system that enables entrepreneurs to delegate non-strategic tasks such as finance and operations, while employing individuals to assist them in directing all sales and marketing tasks.

In contrast, smaller start-ups benefit from a streamlined and less costly infrastructure, and one where delegation can be managed on a more flexible basis.

When it comes to your workforce, however, the most proactive start-ups tend to minimise the amount of full-time employees they initially hire due to the associated cost base.

Instead, they employ remote, temporary workers from a global talent pool, minimising their long-time costs and maximising efficiency in the process.

These employees can be hired on rolling contracts according t of the demands of each, individual project.

Just be warned; dealing with international contractors also incurs additional costs that must be carefully managed. The amount that you pay to overseas workers will fluctuate according to FX mark-up fees and exchange rates, for example, so consider sending payments through established, third-party resources such as TransferGo.

Invest your capital in strategic elements such as marketing and sales

Whenever you launch your business, there is always a desire to minimise costs as you look to establish your foundations. This can also be counterproductive, however, particularly if you reduce spending in a way that minimises growth opportunities and causes unnecessary stagnation.

In this respect, budgeting represents a key building block in your business, as you look to focus your spending on strategic elements such as marketing and sales.

These are the investments that will drive initial growth and deliver a suitable ROI, rather than the capital that is spent on operations, logistics and finance.

While these business elements remain important, they offer a greater opportunity to reduce costs without compromising on output, freeing up more of your budget to spend on core, strategic disciplines.

If you fail to adopt this outlook from the start (and either refuse to spend or invest in the wrong areas of your business), you run the risk of incurring losses and undermining your business before it even has the chance to succeed.

Founding Editor @Alltopstartups, Contributor @Entrepreneur, Columnist @Inc. Magazine and Curator at Postanly (his free weekly digest of the best life and career improvement posts on the web. Subscribe for free.

Leave a Note