Many people these days are lured by the idea of founding their own startups. The reasons could be many. They might not be satisfied with the salary they are getting in their current company, They don’t like their bosses or too much work pressure is being exerted on them, they don’t like working so mechanically in MNCs or they may want to test out their knowledge and experience in the outside world, among so many other reasons. Whatever may be the causes, the fact remains that only 8% of the startups launched every year, succeed and make it big, while a staggering 92% of them are failures, who flop within the first three years of their launch, according to a research done by Stanford University. In this article, we are going to discuss the tips given by the Angel Investor, Sanjay Mehta, on how to make your startup survive for the first three years. Read more on Startups
Dos for making your startup successful:
Spend money wisely:
Money is important for your business to grow and stabilize. Spend money only in promoting your product or business. Do not spend money in building fancy offices and mimicking large corporates because nobody is going to buy your products or avail your services just because you have a fancy office.
Focus only on your business:
If you are working for some other company, while starting your own business simultaneously, quit your job immediately! No one can be successful in riding two boats simultaneously. Focus only on developing your ideas, strategies and business.
Meet and befriend other entrepreneurs:
Exchange of ideas with other entrepreneurs (startups or established corporates) who are in the same business can be highly beneficial for you. You can learn lots of things which will help you to grow your business.
Execute and not strategize:
It is better to have a team which only executes the initial idea or plan rather than having a team which comes up with a new strategies or modifications to the existing idea. You need to formulate the right metrics to keep track of sales or revenue. Also do not change your ideas or strategies frequently. Be firm on your ideas and strategies for the initial few years and only focus on their execution to achieve the desired targets in sales or revenue.
Decide your mojo:
Decide what you want your company to be known for. Some entrepreneurs obsess over brand name to other parameters. Some entrepreneurs prefer to focus on product quality to other parameters. Decide what you want.
In the first three years, 80% of your strategies are likely to fail while only 20% of your strategies are likely to succeed. Figure out which of your strategies succeeded and why? Figure out which of your strategies failed and why? Build upon your strengths and correct your drawbacks.
It is important to have faith in your abilities. You are very likely to encounter setbacks during your journey in entrepreneurship. If you do not have faith in your abilities and your ambition, you are unlikely to overcome the setbacks encountered and your startup will most likely fail within a few years of its launch.
Know your audience or target customers:
Sales is the most important engine for growth to many companies. To achieve sales, you must know your target customers. Find out which category of people are buying your products or availing your services and why? The people who bought your products are most likely to tell you why they bought it than any person who did not buy your product. Find out the reason why they preferred your product or services and then figure out ways to enhance the customers’ experience. This is the best way to scale up.
Market or advertise your product or service:
If you think your product will sell by itself just because it’s good, you’re wrong! At least in the initial few years, you need to make your product or services known to the world by advertising vigorously. Only then people will get to know your product, its benefits and USPs and sales can happen. Once your startup becomes established, then perhaps, your products will sell by themselves because of brand name, users’ experiences and product quality.
Acknowledge your competition:
Entrepreneurs who do not acknowledge their competition are only living in fool’s paradise and their business is likely to fail. You have to be paranoid about acknowledging your competition. Angel Investor, Sanjay Mehta says, “I would say only morons are not afraid of anything. As an entrepreneur you should be paranoid about your competition”.
Improve upon feedbacks:
When customers give feedbacks, take them very seriously and look upon ways to enhance their experience. Only this attitude can improve your sales.
Don’t think too much of yourself:
Sanjay says that many entrepreneurs consider themselves to be Superman, but he has a word of caution, “Don’t take your capacity as infinite. You should think and plan as humans and not superheroes. Even if you get funded, the power of money is limited. So don’t overestimate the power of money”.
Don’t wait for the perfect product:
Many a times, many entrepreneurs wait too long for their company to come up with the perfect product. Sanjay Mehta’s advice is “get your hands dirty fast”. Release primitive versions of your products fast into the market and then provide upgrades on them fast and evaluate feedbacks.
Don’t hire based on experience alone:
Experiences and skills of a person are important, but they should not be overestimated or given too much weightage. You should hire a person who is willing to work hard and who is ready to implement your ideas.
Don’t take investors for granted:
Remember always that an investor has invested in you only because he wants returns on his investments. Therefore an investor should always be kept informed about the progress of the company. Do not take your investors for granted even if you manage to secure funds early. Sanjay Mehta says that a wise entrepreneur would use his investor as an unpaid consultant. At the same time don’t start a company just to fulfill the greed of an investor. Terms and conditions have to be well negotiated before committing to an investment.
Don’t start a company just to sell it:
Don’t start a company just to sell it. Have an ambition to grow the company into an MNC. If not entrepreneurship will be like just another job for you. However, if your startup is running at a loss and you cannot think of ways to recover, then perhaps you may consider selling it.
Don’t give statements for the sake of publicity:
While everyone likes to be in the limelight, you have to remember that not all publicity is good Any mis – statement or bad publicity can reach your customers before you have a chance to rectify it. Once your reputation gets damaged, it is R.I.P. for your company!
Don’t spend unnecessarily:
Spending is not always equal to growing your business. Unless you are absolutely sure that it will bring you returns or improve your sales. DO NOT SPEND! Also refrain from spending huge amounts of money at once. Always take a calculated risk or investment.
Sanjay terms the first three years of a startup as: Dreaming, Finding the ground and Taking off from the ground. Finally, he aptly concludes, that by all means live your dream, but don’t live in the world of your own dreams! Wake up and make them come true! Read more on Startups News
Are you intrested to become guest author and write about business, Leadership or finance? Register and start Contributing your knowledge and experience.