The Small Business Administration estimates over 60,000 new businesses will begin operations this year, with over 47% of the labor force employed by small businesses.
With 60,000 new businesses launched per year, nearly 20% will fail in the first year, according to a report by Lending Tree. A rate of ⅕ of new startups failing in the first year requires you to plan a strategy for your startup to succeed and thrive.
7-Point Strategy For Launching Your Startup Successfully
Launching your startup strategically won’t guarantee your success, but it will build the foundation that can springboard it toward your goals. Seven basic things to consider in your startup will create the best opportunity to be successful.
Test Your Idea
Before you invest a lot of money, labor, and time into your startup, perform a simple test to determine if your concepts are viable.
For example, putting a bar in a strip mall right next to two giant corporate chains like Applebee’s and Cheesecake Factory may not be the best strategic location. On the other hand, it may be that the idea isn’t a bad one, but the site or market may not be able to support it.
For physical products, however, you need a slightly more in depth level of testing.
When testing your concept, examine whether there is already a product on the market and if it is done better than what you have conceived.
Second, consider whether the market can support multiple products simultaneously and whether you can price yours to be competitive.
Finally, you need to determine if a solid customer base is established to support your product.
Build A Business Plan
A business plan is a guidebook for your business. It shows strategic outlays of your operations, an in-depth analysis of the market and your product, and may include how you plan to generate leads or other crucial processes.
A business plan will:
- Aid to secure funding either from private lenders or public sources such as the SBA
- Shows potential investors your market research
- Creates an outline for your business structure
- Establishes annual goals for growth
Register Your Business
Now that you’ve tested the concept and the market and created a business plan, your next step is registering your business with the IRS and local government. Get a fictitious name license, and establish your legal identity (Corporation, Sole Proprietorship, Partnership, or Limited Liability Company).
Create A Sales And Marketing Plan
With a business plan, analyze your target market and potential to generate leads. Again, cast a wide net when exploring options here, but be very narrow in who you primarily target.
For example, if you’re selling widgets for men, consider all the applications your gadgets may be using and then target the specific type of job that widget will perform. Likewise, if it holds pens, think about the kinds of jobs that holding pens would be beneficial for and target that job type specific to men in that role.
Find Funding
In order to fund your startup, you’ll need to have a registered business entity and a business plan that outlines how your operations will run and how you see the market supporting your concept.
There are multiple channels to raise funding, such as:
- Private lenders such as banks
- Public options such as the SBA, State, and local governments
- Investors–private equity, family, friends, crowdsourcing
The money you raise will be redirected into the operations and growth of your business.
Recruit The Best Talent
The talent you recruit for your startup is crucial to helping it get off the ground. Understand that the turnover rate with startups is much higher than in established businesses, so consider that in your hiring.
Experience and expertise are crucial in their respective roles and the ability to work as a team. Often startups will require staff to perform multiple functions, so there needs to be an emphasis on teamwork for every hire.
You’ll want to do background research on each individual, which can be time-demanding, so depending on the size of your hiring, you may want to outsource this role and get a third party to perform bulk background checks for your departments.
The key is to screen applicants to find good talent that you can work to retain as your business grows with incentives and growth opportunities. In addition, the culture you create within your organization will help attract new talent and retain the best of what you already have in place.
Outsource Where Possible
Startups operate with a shoestring budget, so finding ways to lower the bottom line is necessary. One area you can reduce the bottom line is to outsource all functions not critical to the day-to-day operation of your business.
For example, hiring a creative team to handle all your marketing may destroy your budget. Instead, consider hiring a marketing team on a case-by-case or retainer basis to help promote your business launch.
Consider outsourcing:
- Marketing
- Accounting
- Clean-up duties
- Human Resources
- Non-essential Administrative Tasks
- IT Department
- Customer Service
Having a business idea that you’re passionate about is one thing. However, having a detailed strategy separates those who fail right away from businesses on the right path toward success.
