Building a profitable startup can be challenging. To build a successful startup, one needs an idea that works. Once you find that idea, it’s time to put effort into converting that idea into a successful business.
People who don’t have any prior knowledge of entrepreneurship can face many hurdles to build a startup.
But, if they follow the right rules and guidelines the whole process can become a lot easier.
Here are a few steps to be taken into consideration for building a profitable startup.
Step 1: Write down your business plan and idea
Your business idea and plan is the deal-breaker. If you have a great business idea and the proper plan to materialize it, half of the battle is already won.
To develop a business idea, you need to look around yourself. Pick an industry first and analyze that industry from all possible perspectives. What is that one thing in this industry that your potential customers are missing?
Once you gain some clarity over the business idea, it’s time to prepare the business plan.
Preparing the business plan for the first time can be daunting. All you have to do is list down your business’s goals and activities in the long and short term. One can change the plan if needed in the future.
Creating a plan is basically like creating a framework.
Step 2: Explore the market opportunities
A Marketing Opportunity is a state of condition or an opportunity analysis carried out by a qualified sale team to generate leads or sales by identifying the customer, market needs, size of the market, competitor analysis and growth potential.
In a short form: to do well by understanding the market opportunities.
For a startup business sustainable growth and profitability is crucial and important thing, and this can be achieved by identifying the market opportunities for business growth.
Before you start your business operations, you need to gain clarity over the market. An experienced sales team can determine the opportunity for your product.
What are the current trends in this market? Who are your target customers? Who are your competitors? Try to understand all these aspects.
Also need to figure out the latest and popular marketing tools in the industry. The application of such tools can help you to land new customers.
Since digital marketing is an effective marketing strategy startup business, apply suitable digital marketing tricks to gain more customers.
You can apply digital marketing tools like content marketing, affiliate marketing, social media marketing, search engine marketing, etc. to attract more customers.
Don’t neglect the traditional marketing strategies as well. Traditional marketing tools like television advertising, print advertising, billboards still work to expand your outreach.
Step 3: Set-up your business and website and promote it
Your startup should have a physical address and a website. First, make sure you have selected the proper location for your business. It should be spacious, easy reachable, proper transport accessibility and all other necessary facilities.
If your business is easily accessible, you can expect the attention of larger numbers of customers. This step should be a critical part of your business plan.
Also, don’t forget to build a website for your startup. The website must highlight your product and service offerings, pricing options, customers’ feedback, contact options, and so on.
Some entrepreneurs make the mistake of launching the website on the same day as launching the business. That’s a wrong move. Building a website doesn’t cost you much but having a website will benefit a lot.
Create a website in advance and should start promoting your products and services. Let your customers know what to expect from your brand.
If any one search for the products or services that you are offering on the internet, they can land on your website to find out what you offer. You can also promote your website product page on social media networking sites.
A smart entrepreneur can start accepting pre-orders before the official launch.
Pre Launch Marketing Strategies
Lets discuss few pre order sales strategies with some case studies, case studies well know brands, this strategy works well for branded companies as they have tons of followers and huge market reach and visibility.
Lets see some case studies on pre launch strategies, before going to understand how a startup can benefit from pre launch strategies.
Case Study – 1
Elon Musk’s Cyber Truck Received 1,75,000 orders after pre launch demo
Elon Musk recently unveiled the company’s first electric pickup truck, which is also known as Cybertruck, While launching Elon said, The truck will have 3 variants 250miles, 300 miles and 500 miles range with the price starting at $39,000
When Elon was unveiling Cyber truck, the vehicles were not ready yet, he said trucks will be rolling off the assembly line by 2021.
He demoed the truck in 2019, that means 2 Years before rolling off assembly line he started bookings for the truck.
Image source tesla.com
If you see the web page design above two images, it gives all information about cyber truck, features, how it works, benefits, its uniqueness, performance, strength and the final and most important specifications and price range.
With a clear call to action (CTA) and awesome user experience.
Case Study -2
Iphone prelaunch order booking strategy
Image source google
Now do you understand the marketing strategy here, the pre order bonus the an awesome pre sales strategy.
If you think you need some guidance in pre post launch strategies connect with me here
Why promoting the website is so important for startup business initial days?
To answer this question,
Getting initial customers is crucial for any startup, to survive, to improve, to get feedback, to get testimonial on your site, you need customers and these first and initial customers get you all these.
Again there are marketing strategies to get your first customer and to build the initial customer base. Without proper marketing strategy it’s not going to work.
I did the similar mistake when I started my startup in 2017, I did the same mistake, I built a b2b and b2c type of product and was in a assumption that, customer will come to my business site as my product benefits to huge audience base.
Customers won’t come on their own; you need to reach out to the customer.
You need to find your target audience first then find your first customer out of them.
This strategy saves your time, money and effort it works 100%, its a proven content marketing strategy for most of the startup businesses.
Building a mobile app is also a great move to promote your business.
Step 4: Register your business
Registering your business should be the next step. Pick a business name and get registered, this is the first step towards legalizing your business. You will receive GST/TAX numbers based on your business name.
Different countries have different regulatory requirements and tax norms. It would help if you were accustomed to those norms as well.
The legal structure of your business also matters here. Are you going for a sole proprietorship/ partnership/ corporation/ Limited Liability Company? Some of the regulations will change based on the legal structure you hold.
Step 5: Build likeminded team
Building a team of skilled and efficient employees is also a requirement. For your startup, you need to build a team of like-minded people who understand your ideology and are ready to be committed to their responsibilities.
A typical startup Team must include a marketing professional to get the sales, HR Team to recruit the skilled resources, Finance Team to manage the cash flow, and technologist if it is technology based startup. The qualifications of the team members are dependent on the operations of the business.
The employees of an organization are its biggest resource. The selection of the team members can make or break your startup’s profitability and success. So make sure that you’re hiring the right individuals.
Step 6: Build your customer base and add value
Now that you have a registered business and an efficient team of employees, you should switch your attention towards building a customer base. Who are your target customers? How can you categorize them? How can you reach them?
The key to build a strong customer base is no secret. If you have a strong customer service policy, if you understand your customers’ demands, it’s easier for you to attract more prospective customers.
However, customers also make decisions based on the value you’re adding.
Any customer will only invest in a product/ service if they feel they are getting sufficient benefit or value in return for their investment.
It is always better to opt for a value-based selling process. Value-based selling is the process of identifying and reassuring the main value addition factors from the customers’ perspective.
Once you adopt a value-based selling approach, it becomes easier to understand what the customers want and how much they are willing to pay for it.
As a new entrepreneur, your focus should always be on the value and the cost associated to it.
Step 7: Maintain an income and expenses account
If your goal is to focus on profitability, you must record your income and expenses properly. Is the concept of profitability clear to you? Profitability is the ultimate measure of a businesses’ success or failure.
The percentage of return a business has gained over its investments is the true measure of profitability. The higher the value of profitability, the more successful business it is.
To measure profitability, businesses need to estimate different financial ratios like gross profit margin, net profit margin, return on assets, etc.
To estimate these ratios, you must have well-maintained records of incomes and expenses. If you don’t have an idea about how much income you’re generating from your operations and what your expenses are, it isn’t easy to calculate profitability.
Profitability is a major metric that you must estimate to understand your businesses’ present situation.
Step 8: Prepare for Anything
If you have decided to start a startup, you should be prepared for any possible consequences.
Establishing a startup and running is a challenge in itself. There can be many hurdles that you may go through during your business cycle. There will be more ups and downs than you can think of. So, being prepared for them is the key.
You need to collect funds, hire efficient employees, adopt proper marketing tools, and so on. None of these is going to very easy. Nevertheless, it would help if you never felt discouraged.
Giving up should never be an option. A successful entrepreneur goes through all these hurdles with patience and finally guides his or her team toward success.
Also, remember that the initial days are vulnerable. Once you reach a point where your business has a strong brand image and a powerful customer base, you won’t have to worry. From that particular point, your business will only go up. Hold on till that time comes.
Critical Success Factors For A Startup Business
Most of the people think that being an entrepreneur is very easy. Making money through business is not an easy task.
Starting a company is one of the most simple things anyone can start the company if there is a good capital investor it’s just a matter of hours. However, running a company on own ideas.
All over the world, the entrepreneurship flags up in a start-up. Even big organizations showing interest to invest in start-ups.successful is a different story.
The present generation is showing interest to start a company its trend too. People showing interest working with start-ups and it is an opportunity to explore own knowledge and working overnight
They want to become multi-billion dollars’ start-ups forgetting the fact that doing things very fast and try to do so many things at the same time can take them towards failure.
start-up can increase its chances of survival is by learning from other’s mistakes. Knowing thing’s for sure that if you want to learn something then meet a person who is failed rather who succeed. Here are the few most critical factors for the success of your start-up.
THE IDEA
The idea is the strength of the start-up and it is the biggest factor of responsibility for business success, execution of the idea and bringing ideas to action is a big task to the entrepreneur.
Leadership
Leadership is very important to start-ups. Leaders are the decision makers. Setting the goals and vision making the people work on the goals of the start-ups.
Capital
Capital is very important to the business to run successfully finding the investor in early stages no need to worry there are many separate platforms are there to fund from the investors club and ways to get the fund to start-ups.
Team
The team is a very important factor to run the start-ups .group ideas and discussions show effective progress on your startup and give good result to your business.
PlaN
Planning is the most important factor for your start-up. Planning has to involve more than just your core idea. It includes all your objectives and targets of the business. Everything should go under an action plan which is planned.
Marketing
Marketing is the most important factor for boosting your startup. How you are planning to do marketing to your product plays a crucial role. Bring awareness in public on your business. Branding is an inner factor of marketing. Brand management is also important for getting success in your business.
Implement incentive programs
Announcing incentives to the employees on behalf of reaching organizational goals. Setting goals to the employee are very important in start-ups.
Make work fun
Creating a good environment in the workplace and working with joy and fun gives good results to your business. Maintaining a good relationship between employer and employee both working together without any discrimination. Give them respect the love, the attention and the amusement that they deserve. Making parties’ fun and conducting the events, sports, fitness programs.
Business growth
Finally observing the growth regularly is a very important factor for your business. It helps to set future goals and future targets. To enlarge the business the previous growth would be considered. It helps in the expansion of the business it shows the profit and losses of the company it is a path for the next step for the business.
Your business will prosper when you and your team share the same vision and are relentlessly working to achieve it. Teamwork and group discussion bring effective results.
Why Do Most Startups Fail
10 Most Common Reasons for Startup Businesses Fail
All entrepreneurs start their businesses with lots of passion, dreams, and expectations, but unfortunately very few enjoy the success of it and the rest end up in failure.
There is a story line “there could be tones of reasons for a dead snake, why it is dead”
I started my technology startup in 2017, I built up a software product that serves businesses and individuals, it’s a b2b cum b2c kind of product. I ran it for 10 months, after running it for 10 months I landed up in failure; I could not run it for a longer period, I end up quicker minimizing my losses than after I returned back to my full-time job.
Based on experience and analyzing other startups’ failure case studies their root causes, I listed out the main reasons why startups fail.
If you are someone who wants to start a business, change something in your life Congratulations this article is for you. This article will help you understand some real, practical reasons why a startup business fails.
Before getting into details about why startup businesses fail you need to understand a few things as well.
Now you must be thinking, what are those crazy things?
Who found startups?
Why do Entrepreneurs start new businesses
A Startup founder average age is 38 to 40 Years and less than 2% are with extremely wealthy family backgrounds. 90% of Startup businesses get fail in the first 4 years, 10% reach more than 10 years.
36% of Entrepreneurs come from a lower-middle-class background. The reason most of the founders start their startup is To Earn Money, Passion, Control, and Carry forward their Legacy.
60% of entrepreneurs start their first businesses from their homes. 70% Founders before launching their own venture, they have worked at lead 4 years as an employee and 46% Founder start their first company with more than 11 years of experience where I land in this category.
Let’s get deep into, why do entrepreneur fail
I am sharing,
10 Most Common Reasons for Startup Businesses Fail
Reason 1. Business Model Failure
A Business model is a core strategy of doing business; it describes and facilitates how an organization create, produce values along with structural and social contexts.
A Business model provides detailed information about the profitability of doing business, business process, products, services that offer, target market, and audiences.
The essence of the business model is to design core business, execution process, pricing and expenses. A business without business model is like lighting a candle in open air, you never know when it goes off.
More than 26% business fail in this category, Business model design requires a proper business research and this can be done with research analysis and experience which actually startup entrepreneurs lacks of it.
Reason 2. The Funding Problem
The second most failure cause for startups is funding problems. 24% of businesses fail with financial problems.
It is not just straightway to finance-related problems the reasons also include pitching strategies. Entrepreneurs could not able pith their ideas to the right investors and issues in their pitching strategies. The business monetization methods also played their part.
Reason 3. Monetization Failure
Monetization is an important element for any business, without understanding, techniques, and monetization methods it’s hard to survive for any business.
For a mobile-based startup, these are the most effective monetization methods, with having knowledge of these methods entrepreneur life would be miserable.
Reason 4. Marketing Mistakes
The Majority of the entrepreneurs feel marketing is their biggest problem, most of the startups are technology-based startups, being a tech-based background they are lacking knowledge in marketing
Marketing is awesome, Marketing is a science, building a user-friendly product, product timing, competition, strategies, sales funnels, and pricing are the math.
You can’t ignore market research, market needs, and requirements Otherwise, You end up losing lead generation ability,
Most businesses fail in understanding the target customer base and conversions and end up at a high rate of failure.
Reason 5. Lack Of Creativity
Creative startups come with innovative ideas, and being innovative startup businesses more like to offer new and advanced features with the lowest possible pricing, creative people work smart and effectively.
When creativity lacks in a startup business, other companies take the lead, competitors move far ahead of businesses, and market capture. Hence Creativity is damn essential for startups.
Reason 6. Most Outrageously Overpriced Product
A business must use strategies to decide a Product price for example a product or service must Calculate, Research and risk Involved in delivering the expected, without research a product price may too high or too low, In both cases a business sees the down fall.
Reason 7. Hiring Mistakes
Hiring is another important aspect for startup companies, hiring a like-minded, innovative, and talented team is a really challenging task. Even if you find the right talent getting the talent within budget is another task.
Hiring some exceptional talent, Lacking structured hiring processes, and hiring feedback are some common mistakes done by the startup.
Reason 8. Dishormony among investors
Rift with co-founders and investors, disharmony among team members, attitude problems, toxic internal relationships, ignoring employees interested and investors demands causing failure of 8% startups
Reason 9. Old-Fashioned Values and Thinking
Old-fashioned thinking and practices and not adopting the latest strategies and trends, business owners think that their own thinking is only the right they follow what they know and leave aside what others doing how they are getting the benefit of it. Egoism, Dictator styles, Over Self enthusiasm, Old fashioned thinking, and practices causing another 4% of business failure.
Reason 10. Don’t know How to Convert Sales Into Profit
Convert Sales into profit, wow this is great!
Getting leads., this is an area where most of the entrepreneurs lack knowledge.
Either earning leads on their own, through advertising or buying leads from other companies, converting the leads into sales and profit where the ultimate goal of a business.
Understanding sales funnel, conversions, lead generation cost resources required for each sale are important and crucial for any business, unfortunately, very few businesses practice conversion and fail in generating profit.
