If you have a startup, then you must be worried about the rate at which most other startups fail. I have been too, and I have clearly outlined why most startups fail, and the dumb mistakes every startup must avoid. But avoiding those mistakes is not enough, you need to apply some hardcore proven strategies to grow your startup.
I mean, it is hard enough to start a business in the harsh waters of the 21st century. However, keeping a business afloat after it has launched is an entirely new monster on its own.
Many factors stand against new businesses: competition, financial restraints, government regulation/policies on business and a lot of others. Startups are already at a disadvantage from the get go but thankfully a few of them do make it into the industry and manage to stand on their two feet.
However, this is the worst time for any startup to be slack because statistics show that most startups do not make it beyond their 10th anniversary. You can see that launching your business is just half the battle – there is a lot more to be done if your business is to survive and thrive. Yes, you need proven strategies to grow your startup.
This involves more than just envisioning long-term success for your business. If you do not have a plan, you are simply setting yourself up for a fall.
Every business owner wants sustainable growth for his or her businesses more than anything else. Here are a few proven strategies to grow your startup.
- Find and stick to your ‘why’
You can have the best product or service in the world but if you do not fully come to terms with your ‘why’ your business will fizzle out sooner or later.
The ‘why’ of any business is the only reason that business exists. It is the guiding light for every aspect of the business. Simply put, it is the businesses’ authentic purpose; the company’s ultimate objective.
Having a clearly defined purpose drives growth and profitability of any business. Just ask companies such as Amazon, Coca-Cola, Apple, Google, MasterCard and other names among the Stengel 50.
Your companies must repeatedly reexamine its ‘why’ and work towards it at all times, if it is to grow.
2. Establish a unique selling proposition
Your unique selling proposition (or USP for short) is what sets you apart from your competition. It is the unique factor in your company that serves as the reason your product/service is different from and better than that of the competition. It is the reason customers choose you over the competition. And it is one of the key proven strategies to grow your startup.
The USP should be such that it adequately serves the company’s vision. When your business understands completely its objective, it serves as a guide to come up with products and services that are of value and relevant to the company.
Your USP could be offering the lowest prices (like Walmart, ShopRite) or having the fastest package delivery time (FedEx, DHL) or anything else that makes your company stand out within its industry.
Can you guess the question in the heart of any prospective customer that sees you or your product?
Answering this question is what determines how well you do in the market.
For example, as an FMCG entrepreneur, my USP was my delivery service. In my locality, most people expected customers to come and buy. And I decided to be different. Why not go to the customers and sell? That was the perfect answer I could give to my customers’ silent question of why they should patronize me and not my competitors.
So find out what your USP is and stick to it. You will only run the risk of sinking your business if you stray from this proposition.
3. Take a cue from your competition
Most times the best people to look to for inspiration are your competition. Like you, they also have something you do not have that makes them unique. It could be something your business is struggling with.
Take a close look at the businesses in your industry that are growing in new, innovative ways. This will help you come up with a better strategy for your business growth that will be relevant to the current market trends within your industry.
4. Substantiate and diversify your streams of revenue
Profit is one of the major indicators that a business is on good soil.
How does your company make money?
Does it do this in more than one way?
Confirm your revenue streams and capitalize on them to ensure consistent profits. If there are new ways your company can rake in more money, then by all means, implement them.
Let us say you run an online commerce business and you get very good traffic/unique visitors.
You can begin to consider running adverts for other businesses on your site to create another revenue stream.
You have to be very careful at this point though; not every idea that seems good will translate into profits for your business. You should first find out the potential profitability of an idea by testing it out on a small scale to find out if it is sustainable in the long run. Only when results are in the affirmative should you go forward to implement them on a full scale.
5. Invest in talent
I cannot explain how important it is to hire the right people in your business. These people must have the requisite skills to move your business forward and must be motivated and inspired by your company’s authentic purpose and unique selling proposition.
When you do get such people into your team, ensure that you make them a priority. Spend low on stuff that is not directly beneficial to your business objective (such as office furniture, office parties etc). This will make available more finance to hire a few of such people and pay them well.
The best among them will stick around if you run into tough times and need to cut back their compensation. This is because you hired people whose interest in your company is beyond monetary benefit.
6. Prioritize a culture of innovation
Having and fostering a culture of innovation within your business is very vital to its sustenance. From a business perspective, invention and innovation are not the same thing – not necessarily.
Let me explain further.
Invention is creating a new product while innovation is making that product workable, and in most cases, adaptable so that it is more effective. Let me give an example here.
Scenario one: We have all heard of posture/ergonomic chairs right? It is a product built to help maintain good posture while sitting to avoid body pains. This invention does deal with the problem it was created to solve.
So what is the problem?
Posture chairs for the most part are not portable and so cannot be carried around easily. So you would be forced to consider getting some for your company and a few for your home as well. Also they are expensive; they cost anywhere from $50 to $400.
Scenario two: Brian Pulliam of Backplane solved the problems cited above. Inspired by the shortcomings of the ergonomic chairs, he designed and produced a stand-alone product that can be attached to any kind of chair to eliminate bad posture when sitting.
What is more? The product is customized for every customer, is very portable, costs less than $20 and you would only need one for all your chairs. This is innovation; improving on an already existing idea to make it more effective for customers.
When you and your employees prioritize innovation, you will not be left behind by changing trends in the market. You will always be able to adapt your product to better meet the need of your customers so as not to lose your market share.
7. Focus and invest in customer retention
This cannot be over emphasized. According to the U.S Chamber of Commerce and the U.S Small Business Administration, the average business in the USA loses around 50% of its customer base every five years. In addition, the likelihood of selling to an existing customer is 60 – 70% against 5 – 20% for new customers.
Focus on cultivating a sense of need in your customers; make them feel that no other business can meet their needs like yours. This should start from the initial contact between your business and the customer and should continue throughout the lifetime of that relationship.
It is estimated that a 10% increase in customer retention is roughly equivalent to a 30% increase in a company’s value.