The first year of a business is a sprint. It is a rush for the next year so that the chances of survival increase and so that the business can prosper. Here are four tips to help your startup succeed even in the worst economic environments.
(1) You cannot trust current clients and networks
For any new company, a constant flow of business is a necessity to survive. Word of mouth is no longer the way people do business.
Whether the business comes from search engine optimization or pay per click, startups need to have a strong web presence. Of course this is in conjunction with a strong brand, however the former comes before the latter.
(2) Being the cost leader often backfires
Many new companies enter the market and immediately position themselves as the most profitable in the industry. Most of the time, this doesn’t work.
When companies look for a service or product, they typically don’t know much about the industry or downstream companies they intend to do business with.
Therefore, these companies rely on the price to guide them and allow them to make the best decision. You have your Wal-Mart and Targets, but you also have your stores on Madison Avenue that are still in business.
The latter is more difficult to execute. Defend quality.
(3) Stop concentrating on the business plan, move on
Many start-ups sit back and overthink their business plan. The opportunity cost of this is extremely high. Also, this does not lead to any execution.
Startups often end up selling a different product or offering a different service than what they set out to offer their clientele. Market conditions are constantly changing and this disruption leads most businesses to find themselves changing with these fluctuations. And that’s not a bad thing.
(4) You probably don’t know your competitors
When clients of my company come to us, they usually ask about hiring direct competitors. I always tell them that they probably don’t know who these companies are or if they even exist.
When I started this business, I thought I knew my competitors, but every time a client comes to us because they had a problem with another company, they give me the name of a staffing organization I’ve never heard of.
Again, this is due to the extremely high percentage of commerce that takes place on the web and the uncertainty of the various keywords that people within these businesses are searching for on Google.
After closely studying my website analytics, there are hardly any duplicate Google keywords that people search for to get to my business site. Also, only 28% land on the home page. The rest are widely scattered.
However, there is a silver lining to not knowing who your competition is as a new business. It comes in the form of not being able to copy them. When it comes to the game of entrepreneurship, only the competitive survive. The rest disappear.
Startups exist to reinvent the wheel, not copy it and get lost in the scheme of things. For start-up owners, this means getting out of their comfort zone. Sometimes getting people to look at you instead of you looking at them is a good thing.