While many people like to talk about starting their own business, only a few have the motivation and drive to actually do it. Insecurities, lack of funds, and lack of motivation are all reasons why people don’t chase their dreams to start a new business. Plus, the news never lets anyone forget that many small businesses don’t last. In fact, according to the Small Business Administration, only seven out of 10 new businesses survive the first 2 years, with numbers progressively lessening after that. However, there are many examples of successful startups out there for inspiration. Many people and research institutes have looked into why some startups flourish while other flounder. Although there is no one winning formula, there are some keys to startup success.
The Buddy System
In a study completed by the technology media company TechCrunch Disrupt, researchers discovered that 84%-89% of prosperous startups are founded by two people. The implications of this finding go far deeper than suggesting that anyone interested in start a company should just find a friend with the same interests and propose a partnership. Instead, this indicates startups do better when there is more than one person to brainstorm new ideas for the startup and to question ideas from the founder. Entrepreneurs who want to start a company solo can still create a board of trusted advisors to consult before making big decisions to get some of the benefits of having a co-founder.
Startups which run out of cash, run into problems. While money is a major concern when it comes to starting a business, equally as important is understanding when and how to spend. Managers and business owners who thoroughly understand how to evaluate a startup’s goals and future milestones can determine when the best times to save are and instances when it is better to spend. Many wildly successful businesses were started with just a few hundred dollars and a good idea, but when the money does start to come in, it is important for the owner to know when to invest in the business by spending and when to save money for rainy days ahead.
Testing out different product and service ideas on small segments of the market can be one of the most effective tactics for startups who have a product or service they wish to sell to customers and clients. This testing period will give business owners time to work out any issues and improve their offerings based on feedback from their test group. Although many startups get money from venture capitalists or private investors, the true profits come from customer satisfaction. Therefore, emphasis on testing out products and services is a key way for startups to ensure what they are selling will bring success and profits.
Know the Risk
Complications and problems will come up for every startup business. Successful startups take the time to brainstorm and document potential risks, as well as plans for how to handle such issues, before the problems arise. Every industry will have its own unique risks including time to obtain licenses, legal issues, slower production times because of weather, and much more. A contingency plan will provide options of how to handle common problems so a startup can grow and prosper even in the face of setbacks.
Try, Try, Again
Having a startup business fail can be very disappointing, but that doesn’t have to be the end of an entrepreneur’s career. In fact, 90% of successful startup founders have attempted or succeeded at a previous venture. One of the most important keys to startup success is never giving up and to be always looking for new opportunities.
How to Successfully Launch a New Business- Practical tips from SOHO America on starting a new business in industries from retail to technology and beyond.
Is Ignorance Essential for Startup Success? – Every entrepreneur will have one thing in common: they don’t know everything. This article takes a look at how ignorance plays a part in startup success.
What Makes a New Business Start-Up Successful? – A look at real-life startups and how they succeeded.
Entrepreneurs’ Organization – An organization of over 80,000 business owners working to support each other and help startups succeed.
Collegiate Entrepreneurs’ Organization – A community of entrepreneurs with chapters worldwide, offering support and assistance for people looking to develop a startup.
Venture Hacks – A blog sponsored by the Kauffman Foundation of Entrepreneurship with great advice for startups in bite size amounts.
Startup Lawyer – One of the trickiest components of starting a company which many entrepreneurs have no experience in is the business law. This blog offers high quality and practical legal advice for startups.
Originally posted on onlinemastersdegree by Jana Damascus