ExecutiveChronicles | 10 Great Startup Tips for New Businesses | The business world is scary for newcomers, and it’s easy to see why. Over 90% of new companies fail. Sure, it’s easy to feel defeated by that statistic, but those who take that challenge to the ends of the earth are the ones who really succeed!
Luckily, there’s plenty you can do to prevent that failure from happening. In an uncertain business world, let’s talk about some startup tips to maximize your chances of success!
Best Startup Tips:
1. Crunch The Numbers
The most important part of any business is making the numbers make sense. This is never more important than when you’re at your most vulnerable, a startup. Here’s what you need to consider.
2. Startup Costs
You need a rough estimate of how much your startup is going to cost upfront. Remember, businesses come with all sorts of hidden expenses, so do your best to factor in as much as possible.
Add it all up and try to make sure your funding exceeds the total number by as much as possible. There are all sorts of different expenses that can pop up early on, from employee salaries to insurance premiums and legal fees. One way to help you categorize your business expenses is by having a business expense tracker.
3. Startup Funds
Figure out how much cash you have on hand at the start. That includes savings, business loans, and investment funds. You want this number to be as far above your estimated expenses as possible, so do what you can to increase your funding.
4. Get Investors As Early As Possible
One of the best ways to build funds at the start is to get investments. People will give your company the money it needs upfront in exchange for equity. However, it’s very difficult to find willing investors in the early days of a company. This is because of the failure rate of startups.
You can try crowdsourcing your business. There are platforms like Kickstarter where people can give you the cash you need at the beginning. Make the best pitch possible for your business including a detailed mission and vision statement and your plans with the funds you’re given.
Chat with other startups and find out where they got their funding, what obstacles were the hardest to overcome, and anything else you need to know. There are startup forums available for new businesses to talk to and collaborate, so check them out!
5. Get Loans
No lender will give you money without a business plan, so make sure you have one. Make a pitch to different lenders about why they should feel good about giving you a loan. Talk about your relevant experience, your vision for the company, and a step-by-step plan for achieving your goals.
A loan can even be better for your business than investments, down the line. Loans don’t take equity, so you can just pay it back with some interest, build your business credit, and forget about it. Investors will be cutting into the stock you own in your company, so keep that in mind.
6. Don’t Forget Sustenance
One of the biggest expenses that new business owners neglect is themselves. If it takes you 6 months to a year before you’re able to take any revenue for your own personal needs, what will you do? Do you have the cash on hand for a year without a salary?
If you’re able to operate your startup while working a job, do it. Otherwise, save up or prepare for this expense, as it could be a while before you can even think about using company funds.
7. Don’t Neglect Marketing
Marketing should account for about 7% to 8% of a small business budget. You can’t expect people to give you money if they don’t know you exist.
Use all of the free tools at your disposal for marketing from the start to save you money. Perform extensive research on each free option to maximize the benefits, or hire somebody who understands them well. Either way, social media, search engine optimization, email marketing, and more should be a large part of your marketing strategy from day one.
We live in a time when ads are affordable, so use them. You can scale them to be as big or as small as you want, and take extra steps to reach your desired audience as closely as possible. Using the pay-per-click structure, start with small-scale campaigns, monitor your conversion rates, and make adjustments as necessary to improve them before sinking more money into the campaign. Every penny counts at the beginning.
8. Choose The Right Name
Finally, the fun stuff. Choose a unique, quality name for your business. Make sure it isn’t already in use and try to make it catchy and relevant but you can sacrifice one for the other.
For example, the name “Apple” does nothing to tell you that it’s a tech company, but it’s easy to remember and identify. If you have a company called “Doug’s Bike Shop”, it could be easily confused with “Matt’s Bike Shop” a couple of towns over. The name just isn’t memorable enough.
Another strategy could be to use an acronym. Think about GEICO, UNICEF, or AT&T. Those are unique and memorable, and they stand for something. If you have a lengthy name you want to use, consider making it into a catchy acronym.
9. Learn From Mistakes
If you make a bad purchase and wind up sinking a percent of your startup income, don’t think of it as a nail in the coffin. Even if it is, take your mistakes and roll with them. Remember, the only failure in the business world is giving up.
We’ve all heard success stories from business owners who failed multiple times. Elon Musk famously failed several of his first attempts at launching rockets, losing over $260 million for the infant company SpaceX, but he still kept trying until he succeeded. Keep that in mind next time you second-guess yourself!
10. Grow Your Roots
Right now, you’re establishing the foundation of what may, one day, be the next giant in your industry, so use these startup tips to your advantage and start growing your business! Stay up to date with our latest business news and reach out for help if you need it!
