Microsoft, FedEx Corp and GE were all startups that were created during recessions and have survived ones that followed. They now have billion-dollar AUM's. Their management clearly did something right, even if they played some of it by ear.
Your company may not be the next Microsoft, but it could be destined for greatness. Unfortunately, the number of startups that do succeed are minimal.
Here are 10 tips to keep your start-up afloat and beat the odds.
1. Know your community before plunging into a start-up there. Gauge your competitors and ensure you have the resources you need in the city where you set-up shop. Most importantly know if there is a space for your business there or if the market's already saturated.
2. Be flexible. When you decided to invest time and money in this enterprise you did it with a preconceived notion of how your business would shape-up but sometimes you have to let go of the original idea. Successful start-ups, ones that survive, are those that are receptive to changes around them.
Want more management best practices? Check these out:
- Finance Your New Business: It's Not as Complicated as Your Think
- Why You Should Do Less to Grow Your Business
- 4 Reports that Will Keep Your Business Thriving
3. Limit leverage. Taking on debt to fund your business is risky because you have nothing on which to base your revenues. You can have a realistic revenue model in place, you can be circumspect about costs and potential losses but sometimes businesses that seem like winners, flail. Be cautious when leveraging, there's a lot at stake.
4. Don't be too quirky. Avoid uber niche markets, sure there are some startups that have been runway hits but many are doomed from the get-go. And these markets are just as competitive.
5. Trust your partner. Many entrepreneurs choose to go solo, if you do be prepared to make lots of sacrifices. If you do take on partners though, delegate and trust each other. Strong partnerships have seen companies grow but constant bickering and going head-to-head on every little issue can destroy what may be successful startups.
6. Don't bite off more than you can chew. Startups often feel the need to do too much too soon to make their presence felt. Sometimes they do it to impress venture capitalists but don't promise more than you can deliver. Be open to changes but stay focused instead of digressing to opportunities just because they seem attractive.
7. Take risks. David doesn't often beat Goliath, instead of butting heads with the bigwigs, take risks that they as larger companies will not take.
8. Watch your expenses. Don't blow a hole in your bank account decorating your office, printing fancy business cards and spending large chunks of money advertising. When starting out, cut costs every which way. There will be time to pamper yourself, your company and your employees when you take off.
9. Be fussy when hiring. Take your time picking your employees. Do they share your vision? Will they really be comfortable with their salaries or get impatient soon? Are they team players? Are they ambitious? It's easy to get excited while launching your own business but getting the right people on board is crucial to your company's success.
10. Bill your customers. Don't just rely on investors for capital, charge consumers for the services you offer and build your own. It's easy for people to get used to the idea of getting things for free or cheap and almost impossible to convince them otherwise, consider how media outlets are struggling with paywalls online. If you can offer discounts to tease the market, do, but part of your revenue must come from charging for your services.