Do you ever wonder why so many businesses fail and others succeed? Or what factors determine startup success? Find out how to achieve business success!
What Determines Startup Success?
Before you think about launching your own business, it’s critical to understand what you’re getting yourself into. Not everyone knows that small businesses account for 99% of businesses in America. According to statistics, most startup businesses fail. So the big question is, what is the key to startup success?
|Year||Number of Startup Companies|
As you can see, thousands of startup businesses are launched yearly, and this number continues to increase. However, a majority (over 90%) of small businesses fail. So the question is, what’s the recipe for startup success?
Top 3 Reasons Why Small Businesses Fail
Most entrepreneurs will tell you it’s extremely difficult to launch a successful startup. And, of course, I do agree. However, there are ways to increase your likelihood of success, like anything else you do. But before you can attain success, you need to know how to avoid failure. Therefore, you need to understand how and why startups fail.
So why do some fail and others succeed? Below are three major reasons why startups fail;
- No market demand for products or services – According to statistics, the main reason why most startups fail is due to the fact theirs no market demand for the product or service being offered. In other words, the organization is in an industry with little or no customers. And of course, no customers equals no sales, no sales equals no revenue. Of course, you know the rest. Solution: There are two solutions for this issue. Market research and feedback. Many times, individuals are so excited about their new business and forget to cover the basics. Before you enter any market, you must have an understanding of the market.
- Insufficient resources – Inadequate resources is the second most common problem for startups. These companies lack either start-up capital, investors or time. Therefore, one of your top priorities should be gathering proper resources.
- Don’t possess suitable skills – Most business executives don’t know what’s needed to attain business success. And the ones that do know what they need, don’t have the skills that are required. For this purpose, make sure you and your team have what’s needed to get your business off the ground. You need employees with strategic thinking skills that know how to market a business, effectively promote or advertise your business to your target audience and develop a solid business plan. You might need a lawyer to ensure that your company is legal. Or an accountant that gives you a piece of mind.
There are several other reasons why startups fail. Nonetheless, if you know what it takes to succeed and know how to avoid failure; you’ll know what it takes to achieve startup success.
There are many factors that need to be considered before you even start the process of starting a business. For example, you should check the market to determine if the company you want to start already exists. Or look at the business environment to see if it’s crowded.
Ten Successful Startups
If you want to know what it takes to launch a successful startup, look at those who’ve done it before. Most importantly, try to understand how these businesses became successful. One thing you will notice is most of these companies were the first of their kind; and if they weren’t the first in their industry, they were pretty close to it.
10 successful startups;
Keep in mind, there are more unsuccessful start-ups than there are successful start-ups. Therefore, if you’re trying to attain startup success, you must be relentless.
Factors that Determine Startup Success
According to Bill Gross, founder of Idealab, the five most essential factors that determine startup success include: funding, team, timing, ideas and the business model. However, I have listed a few other ingredients that will help you achieve startup success!
Nine elements of successful startups include:
- Timing – Being in the right place at the right time
- Team– Building a solid team to achieve marketing goals and objectives
- Idea – The business you bring to the market
- Funding – Securing the appropriate funding
- Determination – Having the ability to willpower to see it through (persistence)
- Mindset– Building a solid team to achieve marketing goals and objectives
- Product and Service – Being in the right place at the right time
- Skills – Possessing a combination of the suitable talents to compete in your respective marketplace
- Commitment – Doing whatever it takes to achieve your organizational vision
I’m sure you have heard this time and time again. But finding your passion is the key to developing a successful startup. It’s a proven fact, you increase your chances of success by working in an industry that you love. Finding your passion is a process that involves seeking something that you love to do. Better yet, an industry that suits you well. In the end you’ll begin to understand it’s easy to work when your doing what you like to do.
Timing is everything, it can either make or break your business. Have you ever heard the saying “being in the right place at the right time”. If you have good timing, you can put your organization in a position to exploit opportunities. However, if you have bad timing, these opportunities will pass you by.
So, what’s the solution for timing? Time is one of many elements that’s not on the side of mankind. Most business folks habitually find themselves saying “there’s not enough time in a day”. However, you can’t create more time. But, you can choose to make the most of your time.
To begin, everything starts with the leaders of the company. The executives and managers must stand on solid principles to attain startup success. In other words, company leaders must have strong morals, and values. Most importantly, the leaders must a durable business philosophy.
Most seasoned executives understand they must build a solid team for their organization to grow. They understand the quote, “you’re only as good as your weakest link”? For this purpose, they are willing to do whatever it takes to establish a team that can get the job done. Even if that means collaborating with business owners outside of the organization.
The representatives of your company must have the ability to fulfill their professional duties and responsibilities efficiently. Of course, the obligations required depend on your company’s industry.
At the end of the day, you must hire team members that don’t mind supporting your vision. Therefore, your team should have characteristics that resemble; dedication, selflessness, motivation, honesty, attentiveness, grateful, extroverted, intelligence, ambitious as well as other characteristics that fit your company motto.
Is there any such thing as a perfect business idea? Well, yes and no, there are good ideas and bad ideas. We all know, a company that has a good idea will shoot to the top. And companies with bad ideas will struggle.
How can you find the right idea? The best way to go about this is by looking at matters from two perspectives, yours and the customers. This technique will give you a balanced perspective. The other method to determine the value of your idea involves getting feedback.
The most important factor to take into consideration is utilizing your talent can increase your chances of startup success. Usually, when you utilize your talent, you have a better chance to stay grounded, which is important for the long haul.
Keep in mind, your idea does play a part in developing a successful startup. Nonetheless, the idea is only as good as the team behind it.
The Product and Service
It is important to build a product and service your target audience loves. Creating a valuable brand or product puts you in a position to succeed. Not only will customers purchase your products, but small and large retailers online and offline will also sell your product if it’s easily marketable. You can sell in bulk if you contract with retailers. During this period, you will start obtaining larger profits.
On the other hand, you’ll set yourself up for failure if you have a product that customers aren’t attracted to. Even if you love the product or brand, you should consider implementing something else or adding onto what you have.
Most startups are don’t have enough capital to successfully launch a startup. Hence, they must find resources to finance their business.
The financing process involves allocating resources to fund a business as mentioned. These could be grants, small business loans, investments, crowdfunding etc.
It’s important to understand that statistically many businesses have failed due to insufficient finances. They simply did not have adequate resources or finances to achieve the vision of their organization. Some companies have had the resources, and ran out of money.
It’s important to understand, there are several responsibilities that come with being an owner. Therefore, there are essentially two ways that you can go about this matter, either go to school for training or teach yourself.
Some individuals go to school to learn how to create and sustain an organization. You don’t need a degree to start a business, but it can be of use.
If you’re hoping to teach yourself, it would be wise to start with a few personal adjustments. The first adjustment is changing the way you think. It may sound weird, but it’s important to change the way you think. Due to the fact, our thought process has a direct effect on our actions. The reason for changing our mindsets is simply to transform from thinking like a worker to thinking like an entrepreneur.
Teaching yourself means you must become a full-time student in your marketplace. You will need to learn each detail about managing an organization top to bottom starting with a blueprint.
Initially altering your mindset to one of an entrepreneur may be initially uncomfortable, but in the long haul you will be grateful for the decision you made. For this reason, you should consider thinking like a worker to thinking like an owner.
There’s a huge difference between the way workers and owners process how they earn income. Workers show up to complete whatever task(s) their boss or supervisor tells them to. Owners have more responsibilities, therefore they must complete missions or goals that they set. Therefore, as an owner you must be goal oriented.
All in all, you must think like those who are successful to become successful. Most entrepreneurs will tell you they studied others to get to where they are now.
Most of us have heard the quote “patience is a virtue”. But, when it comes to launching a startup business, staying committed is the backbone to success.
It’s important to understand that “nothing happens overnight in business”. In most cases, the development phase will not go as planned. Therefore, you need to be prepared to adjust on the fly. More importantly, you must remain committed and grind it out, if necessary.
It may take months, or even years, to achieve success. Nonetheless, you must stay focused an keep chipping away.
Your determination is what counts most when everything is said and done. If starting a business is something you want to do, do it. Nothing can stop a motivated individual. Therefore, it’s critical to make a commitment to launch a successful startup.
If you are developing your organization because you’re tired of your boss that’s okay as well. However, you’ll need to dig deep and find something more purposeful at some point in time.