Launching a startup is incredibly exciting, but also extremely scary, difficult and very, very expensive.
If you’re thinking about founding a startup, or if you’re already navigating the early stages of growth of your new company, then it’s vital to have a concrete, actionable plan.
Ensuring that you have a well-formed strategy will enable you to maximize opportunities while avoiding common pitfalls. It will also allow you to devote your creative energies to the important tasks of growth, funding and revenue generation without being distracted by less important responsibilities.
In this post, we’re going to look at five practical tips for ensuring long-term growth, sustainable profitability and ever-increasing market reach.
1. Familiarise Yourself With Legal Obligations and Recurring Administrative Tasks
This isn’t a particularly exciting point, but it’s certainly an essential element as part of laying the foundation for long-term success. Failure to account for necessary administrative and logistical duties can quickly create a situation that is damaging to a startup.
While, as a founder, it’s unlikely that you will be directly responsible for ongoing legal, accounting and reporting tasks, it’s still important to understand your organization’s obligations and the ways in which they are fulfilled.
Not only will this enable you to provide much-needed oversight of your employees, but it will also give you peace of mind as you devote the bulk of your energies to the high-priority tasks to which you are best suited for as a business leader.
2. Find Your Main “Traction Channel” as Soon as Possible
In their book Traction, startup experts Gabriel Weinberg and Justin Mares give the following advice to entrepreneurs: “Having a product or service that your early customers love, but having no clear way to get more traction is a major problem. To solve this problem, spend your time constructing your product or service and testing traction channels in parallel.”
The term “traction” refers to sustainable, scalable growth. A “traction channel” is a marketing medium that enables startups to achieve high levels of traction. Examples include paid ads, referrals, email marketing, search engine optimization (SEO) amongst others.
It’s essential to rigorously test various channels early in the life of your startup. Doing so will allow you to identify viable traction channels and maintain growth over the medium term.
3. Recognize the Difference Between a “Startup” and a “Small Business”
The terms “startup” and “small business” are often conflated. However, they do indeed refer to two distinct types of organizations. Understanding key differences will enable you to make clearer and more effective high-level business decisions and create a precise vision.
Ultimately, a startup is geared towards growth and achieving large market reach. Startups tend to offer services or products that appeal to significant national or global markets. While a small business is concerned largely with serving a limited number of customers, startups seek continuous expansion and market disruption.
Startups will usually pursue funding from venture capitalists, whereas small businesses will rely on debt financing for smaller loans. The main goal of a small business is to provide a sustainable living for its directors and employers. Startup founders, on the other hand, are concerned with building an enterprise that will ultimately be valued at tens or hundreds of millions of dollars.
4. Seek Out Mentors and Expert Consultants
Founding a startup is a challenging and complex process for even the most experienced of business-oriented individuals. As an entrepreneur, you will have proficiencies in a range of areas but it’s natural for your skillset to have limitations. You may also lack specific expertise related to the discipline of growing an early-stage startup.
That’s why mentors and startup consultants are of immense value. Don’t be afraid to seek out the help of professionals, even if the cost might seem high. Enlisting the assistance of experts will invariably drive a positive return on investment over the long term.
Startup consultants can help you explore sources of funding, manage cash flow, identify market opportunities, tailor customer-acquisition plans, structure your internal operations efficiently and much, much more. A qualified, experienced consultant will also help you to gauge the true value of your startup, ensuring that you avoid parting with more equity than necessary during funding rounds.
5. Commit to Ongoing Market Research From the Outset
When it comes to market understanding, startups are usually at a disadvantage compared to competitors. They lack the rigorous research processes and internal knowledge that large, established enterprises possess. Furthermore, product development tends to be at an earlier stage in a startup, meaning that the scope for mistakes is greater.
Committing to ongoing market research will help overcome many of these problems. Robust market research practices should inform nearly every aspect of your business strategy, from marketing and advertising to product development to customer service to investor pitches and beyond.
Many of the mistakes made by startups are due to insufficient market research. Simple activities can help entrepreneurs avoid many pitfalls. These activities include leveraging third-party market data, building feedback mechanisms into the customer journey from the get-go, and setting up an analytics framework that delivers actionable insights.
Cultivate Your Entrepreneurial Talent With EU Business School
Launching a business can feel daunting, especially amid the uncertainty of the current economic situation.
If you are eager to pursue a career in business, either at the head of your own startup or working as an intrapreneur for a large multinational enterprise, EU Business School can provide you with the expertise and hands-on training you need to thrive in your chosen field, whatever it may be.
We offer a wide range of undergraduate and postgraduate courses geared towards entrepreneurs, including the Master in Innovation & Entrepreneurship and the MBA in Entrepreneurship.
EU Business School also has campuses in several of Europe’s leading business hubs, including Barcelona, Geneva, Montreux and Munich, where you’ll be taught by some of the world’s leading business thinkers and will gain access to a variety of internship opportunities.