The term “startup” seems to be much more common than it was in the last decade. However, small businesses must not be mistaken for startups. While a startup can be a small business, not all small businesses are startups.
A small business could have existed for years, but never scaled. Yet, many such endeavors are very successful. On the other hand, a startup is a company that’s in its initial stages of business – and if well-funded, might not be considered small.
When Does a Startup Stop Being One?
The beauty of a startup is its potential for scalability and limitless growth. It is also the time for innovation and product adjustment until a commercial vision s is established. Once a business has perfected its initial offering, it starts gaining traction in the market and enters the growth phase. This is when it gains new customers, retains and grows existing clients and experiences increasing sales. At this point when customers are increasingly relying on the company’s products to support day-to-day operations, it can stop being regarded as a startup.
How can Businesses Achieve Startup Growth?
Building a startup is not an easy feat and the growth rate is a major factor in its success. Reports suggest that about 42% of startups fail due to founders underestimating the time they need to develop and perfect their product offerings. While there is no sure-shot way to achieve startup success, there are some steps every founder must keep in mind when building their business.
- Identify a problem, create a solution: Find a common problem that requires a solution. Is it a solution that is already in the market? When I launched Pulseway, I saw a need in the remote monitoring management space for mobile-first. Entrepreneurs need to do their research – audience, industry, competitors and test their concept. This makes it easier to determine whether a business has potential after the early adopter validation, without the cost of developing the full product.
- Determine a niche: Drive success by identifying a problem that clearly resonates with customers operating in that sector. When I started Pulseway, I wanted to give managed service providers the flexibility to work from anywhere. It was solving a problem for a niche audience. Having experience in the sector allows entrepreneurs to bring real-world experience to product development and speak the language of their customers.
- Develop a solid business plan: After early adopter validation, it’s time for entrepreneurs to take the next step towards developing their startups. They must think both short-term and long-term and prepare to be flexible and change course to meet changing circumstances. A business plan must include costs, positioning (including clear USP messaging), marketing and the go-to-market strategy. Long-term goals should incorporate funding, ROI and investment opportunities.
- Build a strong team: A solid team plays a major role in the growth potential of a startup. People working with the founder must have the same business goals and end vision. Entrepreneurs can benefit from hiring like-minded individuals – or people they’ve worked with before. Good relationships can take businesses a long way.
- Innovate and change the game: A sustainable business needs to be supported by a strong and reliable operations framework. Budgets need to be realistic and reflect actual business needs. There are many solutions in the market, designed to help organizations grow. Companies need to be positioned to innovate to continue meeting the needs of their customers. It’s important to be forward-thinking. I anticipated mobile would impact the way IT technicians do their job more efficiently. What I didn’t expect was a global pandemic would further position our product, making it easier for IT professionals to resolve tech issues directly from their mobile phones.
- Plan your exit: Every entrepreneur should have an exit strategy in mind, whether it’s eventually selling or staying on as the business grows. It’s never too early to plan your exit strategy as it will help you to guide your business decisions as you grow and have it in place rather than just taking things as they come.
The Final Word
In the world of start-ups, there is no guarantee of success. But, if you start with a strong vision and belief that you can make a real difference to your customers, your chances of success improve considerably. Not only will it give you the strength to survive the inevitable knockbacks, but it will also help you attract like-minded people to your team so you can work together towards a shared vision.
Having the right idea is just the start of the process. There will be some twists and turns along the way, but having a solid idea, planning ahead and having a strong team in place will improve your business outlook.