Businesses of all types and sizes face risks that may lead to failure eventually. It may involve the business model, product development, finances, customer service or the team itself.
Start-ups and small and medium enterprises are particularly prone to these issues. In fact, research has shown that 75% of venture-backed start-ups fail.
Fortunately, there are many ways to reduce these odds. Here are six tips to improve the chances of success.
1. Set clear and realistic objectives
Having an overall vision is significant for any kind of endeavour. That vision sets the direction of the company.
Break that vision down into small, measurable, achievable and realistic goals that are easier to handle. Accumulating small wins can help foster professional self-esteem and propel the business further.
Set realistic goals and try to consistently attain them by establishing strong habits and systems in the business right from the start.
2. Ask for help from others
If a business is being set up on a tight budget, doing everything single-handedly may seem the only option. However, being in charge of every aspect of a business – from management, marketing, product development, accounting and other back-office activities can cause serious problems.
Do a core competency check on one’s skills and the needs of the business. This can help the individual to stick to their strengths and efficiently delegate other tasks.
Build a diverse team of people who possess complementing skill sets that are needed for the business.
3. Learn the financial vocabulary
Accounting services may be outsourced, but it is still important to be able to read financial reports, such as the profit and loss statement, balance sheet and cash flow statement.
It is easy to learn the basics of finance via workshops and webinars.
4. Get in touch with the target market
The market cannot be controlled, but individuals can keep themselves updated on the latest trends that can help the business stay afloat.
Regularly examine internal and external environments through strengths, weaknesses, opportunities and threats (SWOT) analysis. Doing so can help shore up any potential profit pitfalls.
5. Build a niche
Before rushing into developing a product line, identify the target market first. Do this by writing a profile about the specific target customer.
More importantly, talk to potential customers and gather information first-hand. Learn what they currently want and focus on giving it to them.
Focus on mastering this specific product and establish oneself as an expert in it. During the first few years of a start-up company, expanding into new product lines and industry sectors can dilute strengths and lead to failure.
When budget and manpower are still limited, devoting effort and money to a specific product and customer base may be a smarter move.
6. Look for a suitable address
May it be a physical address or a URL address, make sure it is appropriate for the type of business.
For a bricks-and-mortar business, do not sacrifice the location for a cheaper rent. For an online business, try to avoid hyphens and uncommon suffixes that may confuse customers.
This article first appeared in The New Savvy
The New Savvy is Asia’s leading financial, investments and career platform for women. Our bold vision is to empower 100 million women to achieve financial happiness. We deliver high-quality content through conferences, e-learning platforms, personal finance apps and e-commerce stores.
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