There’s no doubt about it: starting a business is hard. There are many reasons why small businesses fail. Even if they have a great product or service, plenty of funding, and otherwise do everything the right way. According to a study by Shikhar Ghosh, a senior lecturer at Harvard Business School, as many as 95% of startup companies never see their projected returns on investment.
Still, there are some things that entrepreneurs can do to help boost the likelihood of success. Given that SingleHop is itself a startup company. We thought we’d share some of our own ideas about what can help a startup business thrive.
Well, there’s no way to know until you try, right? Hardly. There are some ways to prepare yourself, test your idea, and improve it before you actually found a company around it. Pritish Kumar Halder compiled the best examples from recent Inc. articles and Inc.com guides of tips for the very early steps of building a start-up.
1. Scope out your industry
If you’re just starting to think about entrepreneurship in general, find the best industry to fit your style and talents. For example, this year’s burgeoning industries include interactive, wellness, and ittle luxuries, such as baked goods. When you start honing in on a specialty area, seek out counselors and talk to industry veterans. You can go to SCORE, the SBA, the Women’s Economic Development Agency, or scores more. The Internet, your local library, the U.S. Census Bureau, business schools, industry associations, can be invaluable sources of information contacts. For instance, you might approach business schools in your area to see if one of their marketing classes will take on your business as a test project. You could potentially get some valuable market research results at no cost.
2. Size-up the competition
Study your competition by visiting stores or locations where their products are offered. Say you want to open a new restaurant. For starters, create a list of restaurants in the area. Look at the menus, pricing, and additional features (e.g., valet parking or late night bar). Then check out the diners those restaurants appeal to. Are they young college students, neighborhood employees, or families? Then, become a customer of the competition. Go into stealth mode by visiting its website and putting yourself on its e-mail list. Read articles written on them. Sign up for e-mail alerts about search terms of your choice on Google News, which tracks hundreds of news sources. After you study it, deconstruct it using Fagan Finder, a bare-bones but very useful research site. Plug the address into the search box. You will be able to quickly learn. For example, the other sites that link to it, which can reveal alliances, networks, suppliers, and customers. Your aim is to understand what your competition is doing so you can do it better.
3. Think about funding. A lot.
Can you bootstrap your company? Or are you going to need a small business loan? Might an entrepreneur in the family be able to invest, or should you look for venture capital or an angel investor? Money is a big topic for entrepreneurs, and you’ll want to know your options early on. In order to get investors to open up their checkbooks, you’ll need to convince them that your idea is worthy and also be willing to subject yourself to increased scrutiny and give up a percentage of your company. That’s why it’s a good idea to first ask yourself whether you really need a professional investor at all. “If you’re starting a web software or mobile software company, you might be able to bootstrap it. Which has the advantage that you get to keep all the money you earn,” says Henkel-Wallace. If you decide your business can only get to the next level with the aid of a professional investor, then you need to figure out what a potential backer looks for in a budding company. Start doing your research now, and don’t talk to investors until you have a strategy that involves foreseeable future liquidity.
4. Seek advise from friends, mentors … or anyone, really.
A mentor can be a boon to an entrepreneur in a broad range of scenarios. Whether he or she provides pointers on business strategy, helps you bolster your networking efforts, or act as confidantes when your work-life balance gets out of whack. But the first thing you need to know when seeking out a mentor is what you’re looking for from the arrangement. What can your mentor do for you? Determining what type of resource you need is a crucial first step in the mentor hunt.. You may want someone who’s a good listener, someone well connected, someone with expertise in, say, marketing, someone accessible. Ideally you could find a mentor with all of these qualities, but the reality is you may have to make some compromises. After you enumerate the qualities you’re looking for in a mentor, divide that list into wants and needs. Who’s best as a mentor? Look within your family, friends, business community, academic community, and even at your competitors.
5. Get a grasp on marketing strategies.
You don’t need to be a marketing whiz. But if you’re trying to build an idea from the ground-up, you’ll likely need to build an accompanying marketing strategy from the ground up. In doing so, you need to be clear on who your customers are. Because you don’t have any time to waste on marketing to those who aren’t. “That’s really the biggest challenge, determining who exactly your customers are”. Lonier says. “Many times [business owners] think they understand who they are, but you need to be willing to interview and test potential customers, particularly in the early days of a company, in order to be able to build those relationships.” One way to make marketing easier is through joint-venture marketing, Tabaka says. For example, when someone owned a coffeehouse in she realized that and a major drugstore in the same shopping center could work together and support each other’s marketing goals. Another important and relatively easy way to get your name out into the market is building your web presence through social media like Twitter and Facebook. Be sure you familiarize yourself with and utilize Search Engine Optimization (SEO) to make it easier for people to find your website.