It is a sad fact that 8 out of 10 startups will fail within the first 18 months. Ultimately, the reason all startups fail in the end is they run out of money. What causes them to run out of money, however, has some all-too-similar causes. What that also means, however, is that there are some fairly common pitfalls that businesses can avoid if they just learn from the failure of others. If you want to grow your business – or someone else’s – here are 10 quintessential strategies to make your business boom.
Know your target market
It is a common misconception among many entrepreneurs that more is more, so the more people you reach, the more likely you are to sell more of your product. What you miss with this type of thinking is the fact that sometimes one group of people won’t get near a product simply because it’s so popular with another. When you successfully market your product to one demographic, you are going to essentially cut yourself completely out of another. This is not a bad thing.
Hammer your target market
Once you understand your target market, you need to strategically target every piece of marketing, every word of copy and every last image specifically towards them with laser focus. Choose very specific channels and outlets that are specifically geared towards your target market and forget the rest. Every company in the world essentially targets a niche market, although some will be slightly bigger than others. Even global brands like Nike develop very different marketing concepts for their women’s lines that appear in very different outlets than their men. Each of their lines is essentially targeted to a very narrow niche.
Differentiate yourself – and then be relentlessly consistent
While many local coffee houses might pride themselves on their unique offerings, Starbucks differentiated itself by its relentless conformity. Anywhere you go, from Maine to Minnesota, California to Connecticut or Washington to Wisconsin, you can get the exact same cup of coffee prepared exactly the same way in the exact same cup by a barista wearing the exact same green apron. As much as humans like to believe they love novelty, they don’t. Occasionally we love novelty, but overall we are creatures of habit. Develop a very specific product and deliver it exactly the same way again and again and your customers will love you for it.
Explore new markets
Growing a business is always a careful balance between growing and staying the same and timing is everything. Growth is not always outward either. Sometimes, growth involves expansion and sometimes the kind of growth you need involves deepening your roots to support expansion. Making the right decisions, however, means constantly keeping your finger on the pulse of what is happening. This means always testing, poking, prodding, pushing and sometimes dipping your toe in the water to see which way the currents are moving.
Take care of your employees
Turnover is often high at startups because entrepreneurs want to put money into marketing and expanding product lines rather than their employees. Conversely, this high employee turnover is what keeps many businesses from ever getting off the ground. By putting your employees first, you actually turbocharge the engine that drives the company. Taking care of your employees doesn’t have to mean extravagant salaries you can’t afford. It can simply mean offering perks like telecommuting opportunities when they need it, benefits like term life insurance from a reputed company that gives benefits or even just allowing them to bring their dogs to work.
Test new products
Just like testing new markets, you should always be testing new products. Thankfully, with modern manufacturing methods like 3D printing, you don’t have to spend a fortune to develop a new product. This also means you don’t have to try and force your staff to sell it if it just isn’t working.
Diversifying is different from expanding into new markets or testing new products, but the approach is similar. Samsung and Apple are great examples of different approaches to diversification. Samsung makes a dizzying array of products ranging from TV’s to household appliances to cell phones and tablets. Apple makes fewer than 10 products and yet they are the first company in history to reach a $1 Trillion market cap. While diversifying can be important, diversifying carefully is even more so.
Acquire or merge
You may think mergers and acquisitions are only for big companies and giant corporations, but this is absolutely not true. In fact, most big companies got that way in the first place by constantly merging with other small companies as their needs grew and changed. It is simply a fact that it is more economical to do things in-house than to hire them out as long as you have a full-time need for certain things. For instance, if you know someone who is trying to start their own marketing business but struggling for clients and you have a marketing budget, you can both benefit by simply bringing that person and any staff they may have on board as your marketing department.
Be careful who you partner with
As much as we love the idea of a “self-made” man or woman, the truth is, no one succeeds in business by themselves. From partners to investors to investors that want to be partners, in business as in life, it is very important to choose very carefully who you get into bed with. Just because someone is offering you money, doesn’t mean you should take it. On the other hand, you should think long and hard about passing up money just because someone wants a stake in your company.
Take care of you
Building a business can be a never-ending, non-stop, 24/7 task if you let it be. It is also a marathon, not a sprint. While 8 out of 10 businesses may fail in the first 18 months, that doesn’t mean the people that tried to start them were failures. In many cases, it is the third, fourth or fifth business that takes off. Sometimes, you just have to know when to pull the plug. If you can’t make your business a success with a reasonable investment of time, money and energy, it might be best to walk away and live to fight another day.
Building a business is a delicate task. On the one hand, you want growth to happen where you can show key metrics of growth, but not all growth can be quantified and measured. Your team needs time to develop good team dynamics to support growth and sometimes you need to develop a solid consumer base for one product before expanding into others. Building a business is a careful balance between stability and growth.