Around 65% of startups will fail within the first ten years. Even more astounding is that 50% will have closed operations within the first five. So how do you ensure your company does not become a statistic?
A lot of this includes very careful planning. Read on as we give four essential tips on starting a startup.
1. No Business Plan
A business plan is a crucial document when starting a tech startup. Firstly, you will need it to get finance. No one is going to invest in you if you don’t have a clear plan and can show where revenue will come from.
On a practical level, it also helps you organize your business. In the process of your plan, you’ll see weak spots and areas you need to improve. By addressing them, you will have a much stronger startup at launch.
There are numerous templates and plans online to help you. At the least, a plan should include the time it takes to develop a product, sales prices, and expenses.
2. Overlooking Market Research
When you start a startup, market research should be one of your first major investments. There is no point in pursuing a product that no one wants. Even if you think you know the industry, go back to the drawing board and take a fresh look at everything until your start product development.
Market research should also take place as you develop your product itself. You can get crucial information on the design and its use by investing thoroughly and testing with those who will use it.
3. A Lack of Operational Funds
Startup companies can easily underestimate how much money they need to keep going. With no money coming in during the early months, you need to know how long it will be before you start generating income. Along with this, you need to know your costs and what funds you need to cover them.
All of this will feedback to an overall comprehensive financial plan. Underspending can be as just as disastrous as overspending, so get a budget and stick to it.
Don’t be afraid to look at outsourcing to save time and costs. You can also get assistance from tools such as a tech startups executive search.
4. Making Bad Hires
When funds get tight, it can be easy to fall into the trap of hiring cheap labor. However, it will cost more in the long term. Lower fees mean less experience and skills when in the early days of a startup you need as many as you can get.
Check the going rate for similar jobs at other companies. You want to aim to match this, adding a little to entice the best applicants if funds can stretch that far.
Starting a Startup
Now you know these tips about starting a startup, begin with planning. Do you market research and get your finances in order. Once you have this down you can begin to approach investors and work on your product.
This article is one of many to help get your business off the ground. From marketing to finance, we can help your business thrive in the digital economy.