Statistics from varying sources postulate that as many as 90% of startups fail within their first five years of being founded. This is undoubtedly a worrisome trend if you’re planning to begin your startup.
As such, it’s imperative first to consider potential pitfalls and make a list of things to do before you officially launch. Doing this helps you prepare for pain points and makes you laser-focused on success by executing ideas and tasks better. The success of your startup depends on how quickly you have a grasp of these factors:
1. Your Business Idea
Your business idea is the concept that drives the existence of your startup. It’s defined by your startup’s business model, your goals and objectives, and the solution you aim to solve.
You’ll have to curate a sustainable business idea in this manner:
Step 1: Note your Ideas
Whether your idea comes via a random eureka moment or a thought-out brainstorming session, draft those ideas and brainstorm on ways to develop them.
Step 2: Create a Business Plan
Your business plan is a written document with an overview of your business idea, how you aim to achieve them, your marketing strategy, and other essential information. Your business plan should detail how you plan to grow from your present circumstance to a desired endpoint.
Step 3: Design a Mockup and Test It
A mockup is a real-time model of your idea. It provides the first pictorial view of your idea, helping you make more informed decisions on potential outcomes and gathering feedback from stakeholders. The mockup here may be paper-based/sketch or an interactive prototype that a UI/UX designer creates.
2. Quality and Quantity
To have a vibrant startup that truly stands the test of time, it’s imperative that you create time to create a viable product.
As with any startup founder, there’s a high probability that you’ll concentrate on gaining traction and neglect improving your product’s features, functionalities, and resilience. You must remember that at the early stage of the launch, your product users are very concerned about getting value for their time.
To focus on quality without neglecting quantity, you must choose the right workforce.
Don’t just hire anyhow; only choose a workforce with a skill set to help your startup achieve its goals and objectives. If you’re hiring developers, it’s best to vet their programming language, check out their portfolio, and ascertain that they have enough experience to thrive in the role you’re hiring them for.
For optimum results and top-notch cost-effectiveness, it’s best to opt for a dedicated software development team as they offer greater flexibility, a larger talent pool to choose from, and more experience.
3. Have a Plan B
Your plan B should be in terms of product development, strategy execution, business model, and approach. Not being ready to ditch your idea when it’s not working out.
Prepare for Alternatives
Owning a startup is a game of probability. There’s a chance that your primary plan wouldn’t work out. Thus, you should have options to make your startup viable if the original plan fails. It’s best to have backup resources and alternative cooperation models and prepare the internal workforce for potential setbacks, so their morale is not dampened.
If your earlier goals were unrealistic, you could create a plan B to redefine success.
Say, for example, you plan to onboard a thousand users within a given timeframe. If your goal is not coming forth, you may be unrealistic with your expectation. Rework your analysis, and redefine success based on it.
4. Your Challenges and Opportunities
In every niche, there are always challenges that are detrimental to your corporate goals, and opportunities that can help you maximize your profitability. Your pre-development startup goal should aim at identifying potential challenges and curating ways to solve them.
Opportunities should also be identified, and there should be a failure-proof strategy that you plan to employ to key into the possibilities.
How to Identify Opportunities
Here’s a list of categories to check when searching for opportunities:
- Government regulations: Changes in certain regulations may provide more opportunities for your startup. For example, the insurance industry experienced a boom when the government mandated it for all vehicles.
- Economic trends: Do data and statistics from reliable sources suggest a massive growth potential with your business? Are there statistics suggesting that your product’s acceptability will increase?
- Funding Changes: Perhaps your startup now has a better prospect of funding from an investor.
- Political Support: Some political parties are often more willing to support some businesses.
- Target audience changes: Your target audience’s preferences may be changing in favor of a product you’re better suited to provide.
Now that you know how to recognize opportunities, let’s discuss how to identify challenges.
How to Identify Challenges
You can identify your startup’s potential challenges by doing the following:
- Product analysis: This step aims to ensure that the product meets market needs, the founder’s requirement, and the factors preventing it from meeting requisite requirements.
- Market research: This process complements the step above by testing the product with target users, sampling their opinions, and making requisite analysis. Depending on the scale of your product and user base, you may require a data scientist to scale through this step.
5. Budget and Expenses
Your budget is a financial document detailing your future expenses and income. It lets you understand your financial strength and assists you in planning your spending on par with your income.
As a startup founder, it’s imperative to understand your budget appropriately and allocate judiciously to each arm.
Ensure you consider every source of money, prioritize highly rewarding spendings, and always stick to the budget. The budget can be reworked if expense or income is no longer visible.
Most startups become non-existent within a few years of being established. Some reasons for this worrisome trend are the founder’s inability to refine their idea effectively, balance quality and quantity, create alternative strategies, identify challenges and opportunities, and budget appropriately.