Starting a business is an exciting venture, but it requires careful planning and consideration. If you’re contemplating entrepreneurship, “Startup Success Factors” should be your guiding mantra. In this article, we’ll delve into the critical factors that can shape your entrepreneurial journey.
The startup failure rate rises over time, and the majority of failing businesses are under 10 years old, according to the United States Bureau of Labor Statistics.
There is a lot to consider before opening a startup. And, I’m not talking about motivation, self-confidence, and blah blah. Since you have reached this article, I assume you have a business idea in mind. We will discuss the things that need attention before opening a business.
You might have a great idea that solves a problem. But as an entrepreneur, you are also required to think about the revenue and profitability of a business. Three main startup success factors will affect our business, size, growth, and competition. In our initial stage, these are crucial for a sustainable business. It helps you build a better business model in the market. Without wasting any time, we will start our topic.
Size of the Market
An entrepreneur must ask himself about the size of the market. It may sound funny, but most entrepreneurs don’t have an answer. For example, you are a marketing entrepreneur who does marketing for the trillions of dollar tech industry. You might assume that your market size is also trillions of dollars. But in reality, your size would end up in billions or so. The reason is that tech companies might only spend 10% on marketing out of their total budget. Here you wiped out 90% of your business size you assumed. It will blow your strategies and business approach when you realize it after opening the business. The best way to avoid such a mess is only by considering the size of the market before starting your business.
Now, we have understood why the size of the market matters. But, how do we solve this problem even before starting up? Well, do deep research about your product and target audience. There are various ways to measure the size of the market, but I would recommend researching direct and indirect competitors if you have any. It will give you a better idea of the size of the market. If you do not have a competitor, I want you to dig deep into the problem you are solving. Try to find out how much money your clients will be saving by using your product. It will give a nice clear picture of the market you will be tapping. When you have identified the size of the market, you can shift your focus to our next startup success factor.
Startup Success Factors – Growth and Sustainability
In this modern era of startups, there are different ways to measure business growth. Generally, business growth is anticipated by revenue and profitability over a given period. Since we are at a pre-opening stage in our business, we have to change the perspective of looking at things. The first step is to understand how you would be selling to the customer. Let me explain it in simple language. For example, doctors generate income from repetitive clients. People have regular check-ups and a certain amount of medicines every month. Oppositely, a tuition teacher has a different way of generating income. He teaches a batch of students for a year. And, the old students get replaced by new students every year. The idea here is to identify how often one is buying your product. Once you understand how you are going to make money, you will have a clear picture of the growth perspective of the business.
Based on the type of your customers, start measuring the potential growth of the business. In my experience, the way to sustain a business is by repetitive clients. They will always be the backbone of your business. If you are smart enough, you must have figured out that I am talking about customer retention. Before opening the startup, one of the key startup success factors identify a suitable approach towards gaining new customers for growth and retaining them for sustainability. It will also help you in beating your competition.
Competition in the market
Competition is one of the least considered things by a new entrepreneur. I see people opening the same business as their neighbors because of profits, which is a wrong approach. I want you to have a business idea that is solving a problem. Then, you will start seeing the real competition of your business. Having other companies in the market is just one factor. There will be other competition to your business, and you will have to deal with them.
Suppose you want to start an airline business. I know you must be thinking that it is not a good idea after the pandemic, but let’s assume it. When I talk about an airline business competition, the obvious answer is other airlines. Here, you are solving a problem of a traveler who wants to reach from point A to point B. The traveler has plenty of options such as bus routes, private or hired cars, trains, or other transportations. Now, you must understand that all the modes of transportation are your competitors. Airlines are your direct competitors, whereas other transporters are your indirect competition. It will also help in identifying the actual range of the market size. And hence, one must consider direct and indirect competitors as startup success factors before opening a startup.
In conclusion, I want you to consider three startup success factors before starting your business. First, you should know the actual size of your business to plan your finances accordingly. Once you have figured out the size of the market, you should look for the sustainability and growth of the startup. The competitors will play a crucial role in the business. While considering the competition, you will learn about the market. As a result, a new window for the size of the market and growth perspectives will open. I want you to understand that this process will teach you more about your business idea. Soon you will have answers to all your doubts, and your path of starting a business will get clear. I hope this article has helped in looking at your business from a completely different perspective. Please share this article and spread awareness among all your fellow entrepreneurs.