Starting a business
Starting a new business can be both exhilarating and intimidating at the same time. Every year thousands of businesses get started across a wide range of industries. Start-up businesses have a high fail rate though. As many as one in three businesses fail within the first three years of establishment. Many studies have attributed the high failure rate of start-up businesses to poor planning.
Experiencing a downturn in a start-up is normal, but with lack of planning a downturn can become beginning of the end of the company. Having a contingency plan in place is essential for success. While confidence is good however it does not guarantee success and therefore proper planning is a must. The excitement of starting a business must not overshadow the planning and homework that is necessary for proper market research.
Below are some other contributing factors to startup problems.
Funding is always a challenge. Securing capital can be the toughest part of starting a business. If the funds are from a bank or an angel investor, both come with their own set of challenges. A business plan is key in addition to knowing the industry and competition very well. Banks are usually hesitant to lend capital to a new company due to lack of credit history.
Then there is also the concern about having enough working capital to keep the company afloat till it becomes profitable. Between start-up costs and outstanding debt, it can be a challenge to take advantage of early buying opportunities and business discounts. Just as with the banks, vendors are hesitant to extend credit to startups and will require payments upfront. Angel investors take time to cultivate and must always be on board with the vision of the start-up as well as it’s potential for growth.
Startups need Marketing in order to speed up the cash flow and profits. Targeted marketing activities is essential and a startup may need more professional hands in order to effectively meet their business and marketing goals. Costs associated with advertising and promotion can be steep. For example, it may be irrelevant to invest in broadcasting ads when you key target audience is on online digital platforms. Print ads may be a better option for certain types of startups while others need only digital ads. A startup need to create an effective marketing plan to identify cursors. The company should have a brand positioning and unique selling proposition that can be used as messaging to gain potential customers’ attention. Every marketing activity needs to be customer-centered.
The initial marketing activity starts with having a well designed website in place. This piece of digital real estate is always a good investment especially in today’s era. It is the online showcase of the company’s brand and allows customers to learn more about the business.
Digital marketing is an essential part of the overall marketing plan and having an effective social media strategy is crucial. Research has proven that people trust a company more if it has a website and an online presence in social media.
The social media marketing plan can be as diverse as the target audiences. The networks are varied and social networking goes beyond Facebook, LinkedIn, Pinterest, Snapchat and Twitter. You need to be where you audience are. Hence proper research of target markets will aid in deciding how to approach social media networks.
Many businesses treat social media marketing as the only form of marketing and tend to forget about other forms of outreach to gain attention. All of the marketing wheels moving together can complement each other. Where one area may fall short the other can make up for it and the complimentary factors will create a cohesive brand image. Each message should be consistent with the company’s goals.
Yet another challenge faced by new business others is hiring staff. Another part of this equation is firing staff. Attempting to run a business alone is a common mistake. Hiring full-time or part-time employees is necessary. The members of the staff can vary, buy it is important to have a team comprised of an attorney, an accountant, and a secretary. You may not hire the later out accountant in a full-time capacity, but they need to be on your team. Naturally, as the start-up expands more staff is added.
Learning how to effectively lead and manage a team are skills not everyone has. Office politics can lead to an implosion of unnecessary time and energy on non-productivity which can cost a start-up company too much money. Seeking the assistance of a leader who can guide on better-selecting staff is a wise step. Consulting with others can give better advice on signs to recognize and ways to lead which also motivates staff. Staffing may require hiring and firing several members in order to gain a more balanced and ideal solution.
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There is always the threat of established competition for a new startup business. It’s normal for established businesses to react to the threat and trying to rock the boat of the new business. These established business also have an added advantage of an existing network of business relationships with their partners, customers, vendors and suppliers which a startup doesn’t have the advantage of. In today’s mobile and digital era, a new business can take advantage of the market with quicker customer service and the ability to get things done without bureaucracy.
Big-name companies can be intimidating, but it is not a lost battle. Again, proper planning can lead to success. Anticipating complications and issues is a necessity. Proper planning gives an analysis of the business idea and the execution depends on it.
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