3 Strategies All Startups Have to Ensure Business Growth
| 5 minutes read
Owning and starting a startup, in and of itself, is challenging. Having the financial capacity and knowledge to get a business off the ground is one thing; surviving the fierce competition, impulsive economy, and unpredictable market situation is another thing.
You have to implement a Business Growth strategy in your organization for ensuring business growth. Starting a business is easy, but running a business for the longest time is challenging because more than a 90percent of startups fail during the initial years.
Also Read: How Many Startups Fail and Why?
To magnificently grow your business, you will have to gauge your current performance and your limitations. Unfortunately, attempting to expand operations rapidly on a larger scale has historically sunk innumerable, otherwise excellent, businesses.
For survival, there are some essential vital rules. Most who manage and own a large business, which, at one time, was struggling in their start-ups, know the situation of the various market scenarios for survival.
Ed Sappin, the CEO of Sappin Global Strategies, says, “When an entrepreneur/ financier takes an idea and turns it into a profitable business, it’s a cause for celebration. However, it is not adequate to keep working for the same thing — continued success depends on different and evolving strategies. To scale up the business, the business entrepreneurs have to prioritize a growth to-do list.”
Why Do Startups Fail?
There are various reasons behind it; some of the top reasons include a limited number of the fund, a fewer number of investors, minimal profit margin, legal issues, failure to understand the market, and more.
CB Insights found that nearly 70% of startup tech companies fail. And consumer-based hardware startups fail even more frequently, with 97% ultimately dying or becoming “zombies.” Indeed, incredible technology, an excellent reputation, and a great team is key to success in the market, but startups fail when they fail to solve a market problem. Therefore, a business model can solve a problem in a scalable way.
The primary reason behind the catastrophe of startups is they fail to offer a product or service the market demands/needs. This was the cause cited by 42 percent of the entrepreneurs for the closure of their business in the cases researched by CB Insights. This market intelligence platform analyzes millions of data and provides real-time information on startups.
- It’s All About Money
Another reason is that the startup ran out of money; it needs to remain in business either because its product did not succeed in the market or because investors can not bear any further financial loss after the product failure.
One of the main challenges startups face- is getting their pricing policy right. The price has to be high enough to cover manufacturing costs but low enough to be affordable to the consumer. Some 20% of entrepreneurs that had to close cited failure in this part of the business as one of the reasons their company did not flourish.
- Lack of Passion
It is easy to think and start the business, but what if you change your goal from where you begin? Many founders agreed that after a certain period, entrepreneurs change their minds and shift their focus from the existing plan. It is believed that usually, the founder goes to some other business to do something new.
Ignoring users may lead to business failure. Tunnel vision and not gathering or responding to user feedback are fatal blemishes for most tech startups. You can only succeed if you listen to your customers and respond to the related query.
Not the Right Team
A diverse team with full capability leads to company success in the long term. A great team with the same mission and vision allows the team members to perform to their best abilities. Generally, startups and recruiting spaces fail to hire the right person for the correct position.
Why do Multi-billionaire Companies Invest or Acquire Startups?
We must have heard somewhere that Microsoft, Apple, Samsung, or BMW has acquired a small startup. Do you know the exact reason behind their acquisition?
These biggies have their research team, and they invest a considerable portion in research. They buy small companies to develop and research new technologies, especially in the business of AI and Machine Learning; startups lead from the front in terms of technology and invention.
Johnson & Johnson and GlaxoSmithKline have each put US$50m into a US$200m venture fund to support biotech firms. Also, J&J is creating four innovation centers – in parts of Europe, China, and the US – to fund life-science research and help to push products faster. In addition, the global beverage company PepsiCo has two initiatives designed to tap into new companies. PepsiCo is an incubator program started in 2010 that invests in 10 promising startups each year. Finally, Microsoft Ventures is, also known as M12, invested in more than 50 startups till 2019, with a particular focus on artificial intelligence.
Startups have become a vital medium of employment, innovation, and productivity; it is an example to younger generations that creativity, passion, and hard work can change the world for the better.
Let’s take an example- Whatsapp was created and invented by Brian Acton and Jan Koum in 2009; it was a small company in the early days. But as the years passed, Whatsapp started to show its domination over Facebook. Finally, Whatsapp founders sold the app for $16 billion to Facebook. As a result, Facebook stands strong- there is no competitor left in the market.
Here Are Three Strategies Every Startup Must Consider for Business Growth.
1. Identify Your Target Audience
The stride towards building a growth marketing strategy is identifying your target audience. Without research and a clear understanding of your audience, you are more likely to recapitulate on the wrong product enhancements, build inappropriate marketing messages, etc. These errors/mistakes can cost your startup thousands of dollars.
Fortunately, there are several ways to identify your target market.
First, collect Survey Data: Start by issuing surveys via email or newsletters. In many instances, startups will partner with established market research leaders.
Analyze Market Data: Look to your competitors for insights and information related to target markets. Why do they choose to buy there? Which products are the most popular?
Review Personal Networks: Ask your friends, family, colleagues, and mentors — to study your product or service. Use their feedback to work on some assumptions/indications about your target users.
You can establish your findings by creating buyer personas. A buyer persona is a fictional representation of your ideal customers, their unique qualities, and more.
2. Take Adequate Risks
Always try to fetch something fresh to the table. Do not hesitate to take the risk; a business only grows when you take the risk; by doing things differently, you may discover an entirely new, exciting niche within your field.
Doing business and thinking to do business are similar but different things. If you want to do business, you have to come into the territory of risk-taking. Also, remember profit doesn’t come from day one. You have to play the gamble. That is what business is all about.
3. Monitor Your Competition
Keeping an eye on the competition is quite helpful for a few reasons. First, your competitors may have already solved the challenges you are currently facing. Also, you get inspiration from their growth and success.
“Might be one of the reasons why people do not analyze the competition is, in my opinion, the fear of discovering that their product is not as good as their competitors’ product,” says Gilles Bertrand, global commercial lead at the Shire. “You cannot hide from reality — it’s better to face and improve your plan if required. Another reason is that they do not know how to examine the competitive landscape.”
If you fail to monitor the competition, you might be another ‘Wesabe,’ a personal finance startup, who did not observe the match and fell dramatically.
Success doesn’t come in a day or two. First, however, you need to analyze a few crucial measures, including strategic planning for business growth.
- Never underestimate your competitor
- Make a business model (blueprint)
- Monitor the workflow
- Choose a suitable person for the position
- Avoid unnecessary additional costs
Growing your business the right way is important to ensure that you can sustain and maintain the benefits.