by Nelson James
Business is tough. Creating a business from scratch is even tougher. I know because I’ve done it multiple times. Some of my businesses have failed and others have been quite successful. When I look back at the ones that failed and the ones that succeeded, there are some very clear differences. Here are 7 things you must do to make your startup a success:
1. Create a Solid Vision
Too many startups fail before they ever get a chance to get off the ground because the business models weren’t properly thought through. I’ve done it before … more times than I dare to say. I have gone to lunch with someone and in talking, we come up with some brilliant idea for the marketplace that will make us billions. In all the excitement, I jump online and buy the perfect domain name for the business and start setting up a site. As I’m setting up the site, reality starts to kick in and I realize that it’s going to be harder than I thought to get the business started, I don’t have enough time to dedicate to the project, and I don’t really even know if it’s a viable business.
But the real issue is that I never sat down and came up with a concrete plan. I’m not saying you have to write a full-fledged business plan, but you do have to think about what your revenue streams, expenses, value propositions, partners, products, and target markets are. Don’t get caught throwing up a website or business structure without devising a plan. If you have a great idea, take a day and create a solid vision.
2. Secure Proper Funding
Nothing kills an idea faster than lacking the proper resources to get it off the ground. Part of solidifying your vision needs to be a determination of what it is going to cost to get your business to the break-even point. The next step is securing that money. Look first to business partners or people who could be valuable by being heavily involved with the company. If you can get the money from sources who truly care about your product or service and not just the potential dollar amount they can make later down the road, you will be much better off.
If you can’t find funding there, seek funding through a small business loan or crowdfunding. Companies like Kickstarter have done an amazing job at helping startups secure the funding they need to get rolling.
3. Hire the Right People
There can’t be enough said about hiring right. Having the wrong people on your team or simply not having the right people can take your company down. We saw this with Apple during their hard times and I have seen it in businesses that I have run myself.
Let me give you the litmus test to knowing if you have hired the right people: Take a moment and pretend that you were creating a brand new company. You have the right business model and you have all the funding you need to make it work. Now ask yourself who of the employees in your current company would you take with you. Anyone you are unsure about probably needs to be let go.
Don’t just ask yourself this question once. Ask it often. Every month if necessary. Hiring the right people is key to the success of your startup.
4. Sell a Quality Product
Take a lesson from Steve Jobs. If your primary purpose of being in business is to make money, you’re never going to make it. Apple virtually fell apart when Jobs left because its focus shifted from creating brilliant, high-quality products to an attempt to capitalize on profits. When Jobs came back, he told the company execs that they were selling crap which is why they were losing. He changed the company around and created another brilliant, high-quality product (the iMac) and the company almost immediately rebounded. The lesson? Sell a quality product.
5. Create a Killer Customer Experience
This especially applies to online businesses. Because you are selling something online, you can’t create a personal relationship with every customer that walks through your door. You can’t turn on the charisma and sell to a customer through an intimately personalized experience. Instead, you have to rely on creating that experience through the appearance of your site, your purchasing process, and your follow up. And because everyone else is trying to do the same thing, your experience has to be truly spectacular in order to get noticed.
Be creative. Make your process different than anyone elses. At Signs.com, we have professional designers on staff that help our customers create fantastic design. And it’s on our dime. Does it cost us more? Of course. But because of it, we have a high rate of referrals and return customers. Plus, it just makes everything about us scream that we are the high-quality product in the marketplace. And we are.
6. Solicit Feedback and Take Action
I don’t think there is anything more important than getting feedback from the customers who are actually using your product. The benefits are manyfold. First, you get feedback that will help you to make improvements to your product and create a development roadmap. Second, you help your customers feel like they are important by listening to them. You give them a sense of ownership in your product because they feel like they are able to contribute and enhance your product. Third, you create a solid customer loyalty when you actually take action and improve your site. Especially if you contact the customers who offered the suggestions and tell them that you listened and appreciate their contributions.
7. Market to Your Audience
In order to market properly to your audience, you first have to know who they are. Soliciting feedback is a fantastic way to get that information. Of course you can also use analytics and order data to help quantify who your true audience is.
Once you have a good grasp on who you are trying to target, you have to market to them in the places they will be. This is typically one of the largest portions of your startup costs and it’s the easiest part to screw up. You can very easily blow an entire month’s budget in a day by mismanaging pay-per-click ads or attempting a radio, television, or billboard ad. It’s almost too easy to do and you could destroy your entire business in the blink of an eye if you’re not careful.
If you don’t have experience or expertise here, I would recommend finding someone who does. Don’t just throw money at something and try it yourself. Swallow your pride, realize that you aren’t a marketing professional, and find someone who is.
Worth the Risk
Starting a business from scratch is risky. It’s hard. It’s filled with long, ugly, horrible days. But the reward of creating a successful business is well worth what you put into it. Heed these keys to startup success and you’ll be well on your way to creating something you’ll be proud of.
Nelson James is COO and Co-Founder of Signs.com. Signs.com produces custom banners and signage for small businesses and other customers seeking a custom signage solution. Nelson also previously helped grow small businesses including his time as VP at Lendio and Co-Founder and President of SEO.com. Connect with Nelson on Twitter and Google +.