It is the ultimate dream of every startup to have a successful and stable business. One that is profit yielding and growing amidst various industry challenges. While the sound of a cash machine register is truly satisfying, it’s not easy to maintain a lucrative startup business. Despite being passionate and dedicated, success doesn’t – and will never - happen overnight.
Even if you have the grandest and most unique business idea, it’s impossible to build a multimillion dollar company in as little as 12 months. Businesses with overnight success stories, on the other hand, waited several years before finally landing their big break. Building a successful startup takes time to materialize, and it requires utmost patience along with never-ending commitment.
Most startup businesses don’t fail, but rather give up too soon. To savor success, you need to establish long-term plans and take one step at a time. Expectations should also be set right from the start to avoid disappointments.
Year 1 – What to expect?
Your first year as a startup company involves a lot of challenges. This is the phase where everything is laborious and there are tons of things you need to accomplish. You need to find the right financial partner, introduce your business to the online world, launch your product or service to the public, and engage with potential customers to increase sales.
While you might not notice it, there are tiny victories during this phase that don’t feel like huge accomplishments. Keep in mind that small victories don’t necessarily translate to success and achievement. How to build a successful startup can be a tricky and elusive process, so you must turn these small victories into motivation to move forward. Remember that your revenues, for the time being, are meant to cover your expenses and it’s just wise to:
- Keep your financial reports handy, organize them for easy computation.
- Settle your bills, invoices, and payables on time to avoid incurring debts.
- Prioritize being liquid, don’t obtain major purchases that aren’t needed.
Year 2 – Where is my money?
The second year is all about questioning the initial performance of your startup business. Most entrepreneurs choose to have a strong and compelling first year, and it’s just normal to invest all their time and money to make things happen. As a result, your second year might look a little less promising with customers disappearing and financial funds slowly depleting.
This is also the stage wherein you will realize that validation doesn’t guarantee success. At this point in your startup business, unanswered questions will surely come up and soon anxiety will slowly affect your decisions. It is essential to realize that this is normal and solutions must be drafted to help solve problems. To avoid getting into real debt, you must:
- Look for alternative ways to fund your business, either through loans or investors.
- Keep an eye on your spending pattern and prioritize critical, as well as important, matters.
- Set aside at least a small portion of your sales for emergency purposes.
Year 3 – The turnaround year
Continuing with tips on how to build a successful startup is the importance of having a sound mind and fair judgment. This is vital to correctly gauge whether or not your business is worth taking the risk. As a business owner, you will come across certain scenarios in which you’ll be required to make fair decisions for the betterment of your business. In general, a startup fails because it was not able to distinguish a successful growth from a weak expansion.
The third year is the most critical phase of your business. This is the stage where decisions must be made if you’re going to continue doing the same things or head to a different direction. If by now your finances are still down, then it’s time to consider major strategic changes. Breakeven is good but don’t get into the illusion of a profitable business, because in reality 3rd year is still far from being successful.
- Play an active role and continue developing ways to build partnerships.
- Secure a strong business plan with clear goals and a unified framework.
- Handle your operations wisely, check daily activities and quarterly objectives.
Work on increasing customer base
All startups require a good number of followers for the business to take off successfully. Regardless if you’re in the retail or service industry, customers are the life and blood of your business. You can’t survive selling the same kind of products or services to the same group of people, you need to increase your customer base to amplify success.
Keeping a healthy relationship with your new and old customers is extremely important to the growth of your business. Team members must know how to communicate with clients to increase retention. While it’s imperative for startups to attract new customers, one must not forget the presence of loyal followers. Keep them in the loop by:
- Consistently sending monthly newsletters, in-store promotions, and limited deals.
- Using the right marketing channel to advertise your brand, products, and services.
- Offering irresistible privileges through reward programs, loyalty cards, and buyer discounts
Work on your patience
You will never know how to build a successful startup if you don’t have loads of patience readily available. Bear in mind that success doesn’t happen in an instant, and startup founders should know the difference between a seemingly real achievement, and the true meaning of success. Likewise, it can be a direct and indirect accomplishment.
Every company is different and your success might take months, years, or even decades to show up. Remember Apple? The company was built during the ’70s but it wasn’t until the ’80s before they become known for Mac computers. And up until now, they are still struggling to outshine top competitors in the business. Here are some tips on how to work on your patience:
- Create a fostering, welcoming, and highly motivated company culture.
- See tiny achievements as huge accomplishments, and treasure small wins.
- Have the endurance and persistence to keep calm and wait for the right moment.