You’ve seen the depressing statistics about small business failure rates. Most new companies don’t survive past the fourth or fifth year. But you’re building something different — a business you believe will endure. You just wish you had a reliable recipe to get it off the ground and give it some lasting momentum. Here it is: a road map of sorts to achieving startup success.
This road map takes the form of a list — a list of not-so-secret secrets that thriving early-stage businesses tend to share. If you can follow them, you’ll find yourself in very good company indeed.
1. Reconsider your lead generation strategy
Many of the most common (and frustrating) problems early-stage businesses face revolve around demand and lead generation. Even if founders have marketing or sales expertise (many do not), they most likely acquired it at mature companies with ample revenue and budgets to match. Small businesses looking to grow can’t operate in the same way.
Small business books like “Bigger and Better” by Esther Kestenbaum Prozan are excellent resources for challenging traditional mindsets. Kestenbaum Prozan, a multi-industry C-suite executive, pushes founders to completely rethink lead generation. Rather than traditional methods that typically involve spending large amounts of capital, she suggests a disruptive, non-transactional approach.
The reality is that people are bombarded daily with marketing messages and sales pitches. In a non-transactional approach, companies must stand out as trusted thought leaders long before a customer actually needs them. Instead of constantly focusing on “what’s in it for me,” those who take this approach are committed to what’s best for their customer at any phase of the customer journey. Following this example will cause even your losses to become resources that provide value to your company.
2. Cultivate and Utilize Strong Professional Networks
First-time founders embrace entrepreneurship because they think it’s a way to escape the professional rat race.
Seasoned founders know better. Running a startup is every bit as much of a rat race as overseeing a corporate department or division. It’s just a different kind of rat race.
Successful entrepreneurs understand that they need to cultivate and utilize strong professional networks to thrive in their new roles. Whether for funding, talent, expertise, or old-fashioned emotional support, these networks are critical to early-stage companies’ survival.
3. Jealously Guard Your Equity
You know that successful entrepreneurs are frugal, often to a fault. What you might not know is that successful entrepreneurs also carefully guard their equity, even after it seems like the right move to let some of it go.
Until you’re cash-flow positive and preferably profitable on a consistent GAAP basis, you’ll pay a premium for equity financing. In other words, you’ll give away a portion of your company — that you probably can’t get back! — for less than you believe it’s worth.
Successful founders use debt financing or bootstrapping (self-financing) until they can’t anymore. Even then, they look for nontraditional alternatives to equity financing.
And they’re careful with their capital elsewhere, too. They’re always looking for opportunities to burn less cash — whether it’s a free legal clinic for early-stage entrepreneurs instead of a high-priced lawyer’s retainer or a low-cost professional networking mixer instead of a spendy destination conference.
4. Avoid the “Do Everything Myself” Trap
“If you want something done, do it yourself.”
You’ve heard it a thousand times before, and maybe you’ve said it too. It’s a catchy slogan. One that works…until it doesn’t.
By necessity, founders (or founding teams) must do everything for themselves initially. But most wait too long to farm out responsibility for certain tasks, projects, or functions. By the time you become aware of a resource constraint or the pressing need for a certain type of expertise, you’ve let things go for too long.
The lesson here: Successful entrepreneurs delegate early and delegate often, reserving for themselves only those jobs for which they’re well and truly the best person.
5. Remember that People Are Your Greatest Asset
Successful entrepreneurs know that they’re only as good as their weakest teammates. This leads directly to two things:
- They optimize their hiring process for quality and never stop looking to “trade up,” even when that means parting ways with underperformers.
- They go above and beyond to nurture and support their teams, exceeding expectations for pay and benefits while providing opportunities for growth and advancement.
The true “secret” of effective people management is never being content with what you have. You can always do better, both by maximizing the potential of the people you have and casting a wide net for the next great hire.
What’s Your Secret?
As a business owner, you’re accustomed to keeping secrets. After all, your business wouldn’t stand a chance of survival without some sort of secret sauce that inspires jealousy and consternation in its competitors.
But a trade secret isn’t a one-way ticket to success. You need more — a lot more. You need secrets like those shared by some of the world’s most successful startups.
Those secrets will probably include some of those on this list. Maybe all of them. You’ll likely have others, too, and perhaps quite a few more. Like the IP that sets your concept apart from the competition, their precise form and the way they intersect will be unique to your business.
And you’ll want to guard them as closely as you guard your secret sauce. Because the day you stop keeping secrets is the day you stop treating your startup with the respect it deserves.
Featured image provided by Startup Stock Photos; Pexels; Thanks!