A startup is a business in its first stages of development. Startups form because the founder or group of owners want to bring a product or service to market as a unique offering to the industry. Many startups are also called disruptive in their respective fields because of how these businesses are trying to approach solutions to problems in their industry in a different way.
Startups are distinctive because they tend to avoid replicating a business that already exists such as a laundry mat or car wash. Here are the top five startup strategies to launch a brand new business and get it off the ground.
Promote Your Unique Value Proposition
One of the best ways to differentiate your business from the competition is by aggressively promoting your unique value proposition. Why customers should buy your product or service versus putting their dollars elsewhere is important for your marketing, and your value proposition should clearly define why your business is unlike the rest. Being solution-focused to your industry’s needs is the easiest way to garner attention and buzz, especially during the launch phase.
Create a Sales Plan
A business plan is a common document to create for any new venture. But what most startups fail to give more attention to is a sales plan. How your sales funnel will piece together determines how quickly you can grow. Your sales plan should include where your leads will come from, how many leads you’ll need in your funnel in order to convert them to a paying customer, and how much time it might take to convert a lead into a customer. Understanding your full sales cycle, even if it’s only an educated guess at this stage, is essential to seeing the bigger financial picture.
It’s tempting to hire a large staff or even expand the number of your founding partners to split the work with you. But understand that cash preservation is the most important aspect of staying afloat in the early stages of any business, and hiring too many people is a common way to run out of cash quickly before consistent sales can start coming in. Hire as slow as you can, and take on more working hours for yourself if need be. Even if you must wear multiple hats at the company for the first few years to save on payroll will help the overall financial success of the business.
Create a Cash Flow Schedule
Cash flow is the money that goes in and out of a business. Knowing when bills are due and what must be paid each month will help you understand how much cash in the bank you need in the short term. Creating a simple monthly cash flow schedule will keep you on track to make sure you stay on top of sales and income while keeping an eye on expenses. This also helps to decrease the risk of overspending your budget.
Have a Short-Term and Long-Term Vision
Many founders are either short-term or long-term leaning and fail to see one side or the other. The most successful business people understand that both sides of the coin need to be taken into consideration with every single decision, especially in the early years of a startup. Forming both short-term and long-term business strategies is key to overall success and longevity in any industry.
It’s exciting to start a new business, especially if the idea has been in the works for a while. But understanding that starting a business takes years of dedication, thoughtful planning, and listening to the marketplace are the real keys to achieving true success.