One of the most well-known facts in the world of entrepreneurship is that the majority of companies fail to succeed. Not only that, but quite a large portion of the up-and-coming small businesses fail within the first couple of years of their startup. While there might be plenty of individual reasons for this, the underlying truth is that business owners simply aren’t adequately prepared when it comes to running a screenful business, let alone scaling one into a profitable venture. However, no matter what industry you’re operating in, there are some basic rules to growing and maintaining a successful business. Here are five of them.
Create a business plan and stick to it
A business plan is what allows entrepreneurs to communicate their vision over time to their business partners, potential investors, legal advisors and future employees. It acts as a blueprint using which you’re going to run your company and includes a summary or an overview of the plan, a description of what your business is intended to be, it’s position in the current market, target audience, advertising strategy, employee and customer policies, etc. Have in mind that each business plan is company-specific, but at the same time, it’s far from being laid in stone. It is not a blueprint or an instruction sheet, but rather a reasonable framework for growing and maintaining a successful business.
The right type of funding
Did you know that different stages of your startup’s growth correspond to different stages in securing the necessary funding? Viable business ideas and working prototypes are brought into fruition with the help of pre-seed capital, which is often obtained via friends or family, angel investors or entrepreneurs who invest in other startups or using accelerator organizations that provide funding, mentorship and the necessary office space in exchange for equity. The second stage is called seed capital and describes the funding required to actually start a company and satisfy the chain of supply and demand, raised through either equity or reward-based crowdfunding or using syndicate investing.
Completing the first two stages successfully would mean that you have started your own company, found your target audience, provided them with your products and services and started generating capital. Series A funding is for companies who have figured out their supply, satisfied their demands and require capital to start scaling their business by improving the distribution systems or establishing a more profitable business model. Series B is for companies who have a working business model and an established customer base, while Series C is for established companies with expanding customer bases.
Don’t skimp on marketing
Advertising is the single most important aspect of business expansion. A well-developed marketing strategy includes individual goals you would like to accomplish such as driving traffic, generating leads or improving sales, as well as plans detailing how you plan on doing it and different ways to measure results. Keeping track of results allows you to identify underperforming strategies and pinpoint its shortcomings and use that information to improve your advertising efforts and grow your business more efficiently. This is why social media monitoring is quite useful, it gives you the data you requite, and it is always advisable to hire a professional agency to handle this task for you. That way you can focus on other aspects that can help you grow your business.
Outsource your employees
When starting a business, a lot of business owners make the mistake of hiring full-time employees who end up sticking with the company regardless of whether they’re actually contributing to the growth of their companies. Workers with different types of skills are needed during different stages of your company and sacrificing your workers for the sake of efficiency and company growth is one the last resorts.
In fact, you are better off outsourcing the necessary help and keeping them around for the duration of a specific project they’re working on. For example, you might need a team of people to handle making cold calls in order to boost lead generation and instead of hiring a full-time crew of workers for a single task or placing the burden on your existing employees, a much more reasonable and profitable idea would be to outsource the necessary appointment setters and have them handle all your telemarketing needs.
While it may reasonable for inexperienced entrepreneurs to make mistakes during the early stages of their startups, there are some simple rules of the trade that have used and perfected over time by various industry leaders. The current startup economy is teeming with small businesses and all it takes is a single mistake to derail your business plan and ultimately prevent you from scaling your business. Why waste your time making the same mistakes others have made when you can learn from them and apply that knowledge to successfully develop, grow and maintain a profitable business.