How to survive in the early stage of starting up?
Starting a company is a lot more work than it looks. You pour your years of motivation and inside struggle into a brand after taking millions of decisions. Some turn out beneficial but some of them are a disaster too. However, after struggling with all criticism and financial insecurity, you finally open a company. Well! Let us tell you that was the easy part.
It takes a lot to keep it alive. A company can fail to survive because of so many reasons such as internal destructions, lack of product knowledge, lack of leadership but the major one is lack of funding. According to a study conducted by small business administration in the US, one-third of start-ups don’t survive even the first two years. In 2017, NASSCOM stated that 25% of Indian start-ups were closed because of financial crises. Sometimes they succeed to get consumer’s interest but failed to make a profit to survive the competition.
We understand It is difficult to swim in the entrepreneurial ocean, however, good planning and management can prepare for most of the hurdles you are going to face on the way. Here are a few points an entrepreneur should keep in mind.
1) Strong B-Plan – The first step of your entrepreneurial journey is to make a well-elaborated business plan. A business plan is the written layout of the present and the future of the company you have in mind. Your business plan is read by many important people such as money lenders, angel investors, big investment contributors, and CEOs etc. This should reflect each and every good thing about you, your product and your core team.
Your business plan is the reason people will give you the opportunity to speak about your product. Start by explaining about your product, why you think it should be launched in the market, what are the industry needs right now, about market trends you have researched, about your competitors, elaborate your financial plan, marketing strategy and back that with sufficient data. Here you can tell what you are expecting out of it. You can also show portray a well-managed picture by showing your organization structure and your strong team.
2) Effective early employees – This is the only section where you can do cost cutting. A core team is the backbone of any start-up. They are the pieces you need to complete your puzzle and win. Choose your people wisely. You can’t manage each and every department by yourself. Add people around you who have an understanding of your product, ideology and you. You have transformed your idea into a company but without a good team, you would never be able to convert it into a profitable business.
A start-up is as fragile and fickle as a baby, only right people on board can help you raise it well. In the beginning, you won’t be able to hire employees who are expert in their field but you can hire a person with knowledge, willing learn more with an attitude to make it big in life and eagerly waiting for a chance. Try to find people with knowledge if not experienced. Make sure to maintain a healthy work environment. A quick and dedicated learner under your guidance can outrun an experienced employee in the long run.
One of the most effective ways of cost-cutting is letting go of 9-6 office culture. Hiring a freelancer can not only save you from electricity, meal, transport, internet bills but also will work extra within the comfort of their home.
3) BTL & Digital Marketing Strategies- Obtain marketing strategies and that is suitable for your product while being cost effective. Going with the flow is something you can’t afford an early stage. Remember the idea is to create your presence for that you need a marketing campaign that stays onboard for a long time. Understand your target audience, their needs and spending behaviour. Thorough market research will pay you off for sure.
Once you understand your audience you can find a more direct way to reach your audience. A more communicative way can be more effective in the beginning when your company is relying on every penny you earn. Obtain methods such as “below the line” or digital marketing. Advertise on billboard, banners or wraps. Hire a good digital marketer to prepare your website and run campaigns for your product. Both ways are cost-effective and can be easily controlled by you.
4) Ask for help from friends/family for financial needs – Keeping your work at the office is a good way to maintain work-life balance but it never hurts to communicate with need help. Entrepreneurship is difficult. Sometimes only motivation and funding don’t help the founder to resolve all problems. In the early stage of your start-up, you can use all the help and motivation you need.
Communication is the key. Involve your friends and family member to help whenever they can. There is nothing wrong with accepting when your company needs help. Embrace your fear and embarrassment. It’s very crucial to figure when and how many favours you can afford but you’ll never know without asking. Your close people should be your honest critics so they can help you to improve in the early stage.
5) Collaboration with other start-ups in marketing campaigns & manpower sharing- Collaboration can be your most powerful yet cost-effective way of marketing. At the early stage of a company, entrepreneurs are generally afraid of getting lost under the bright light of big companies but, if manager wisely, you can get all the recourses, funding and a well-established brand name after collaboration, for example, UBER, Instagram etc. Understand your competitors, their strategy, market need, audience and ideology. Two small companies can also collaborate to meet each other’s needs and share market presence and consumer needs. It is essential to understand your products/company’s needs, shortcomings, consumer reach and market presence to evaluate which type of collaboration can help you the most.
6) Customer retention over customer acquisition – Your poor customer service skills can cost you a lot sometimes a fortune. Whether your company is service based or product based, your consumers are your assets. Handing consumers is the most happening department. Your customer, even the difficult or never coming back ones, are your potential assets. Getting a new customer is easier said than done but don’t underestimate the potential of old ones. They are the seeds you rowed last time if watered properly they will fruitful for you even more than you expect. Treat each and every customer of yours as your investor and train your team to do so as well. This will change the whole mindset of dealing with them. Try to encourage more and more people to give you feedback on services too, and keep a close eye on feedback. You might not notice but poor customer service might be hindering the growth of your business. Acquiring a new customer can cost 3x more than retaining a old customer.
7) Potential Investor search – We have talked about how a financial crisis can sink a well-liked start-up in the long term. Being able to pay all the debts, expenses and daily cost is no easy tasks especially when all depends upon the profit and self-funding and sometimes being cost-effective is not enough that’s why every entrepreneur looks for investors the moment they step in the market.
Finding the right investor is like finding the gemstone that suits you. Understand a different kind of fundraising options available in the market and use the one that suits your ideology. Finding people with similar ideology is complex. When you allow someone to invest in your business even if they are your family/friends, they become a part of it. They come onboard with expectations and you also take them on-board with expectation. Prior research on your investors before you pitch them is always helpful. Another issue is being able to provide fund. Make sure they are financially stable and able to provide the amount of investment you need for your company at the time you ask.