The sad truth about the business world is that it’s full of naysayers telling you that most startups will fail. They believe that newcomers to industries don’t have what it takes to offer innovative products and services that consumers want to buy. Of course, we all know that there’s plenty of room for innovation in each niche market.
With that in mind, there is one question that would-be entrepreneurs ask themselves: do startups actually build profitable businesses? In a word, yes! Believe it or not, many of the top name brands that you know today started from humble beginnings. They also had radical ideas that transformed how we live and work.
By now, you might be wondering what the “secrets” are to starting a successful new business. Well, it turns out there isn’t anything secretive that successful startups do; it just all boils down to common sense and practical thinking. Still unsure? Here’s what you need to know:
Successful entrepreneurs stick to what they know
There’s always the draw of moving into a new niche that promises lucrative returns to those that invest in it. The trouble with such an approach is that you will have little to no experience of that other sector. Having good business sense is one thing, but knowing lots of information about your chosen industry is another.
When you’re new to a niche market, you have to spend some time working in it, understanding how it works, and what drives consumers to spend their money. Some startups assume that they can “pick things up” as they go along. Sadly, that can often result in an expensive concept and one that could effectively kill their new businesses!
The need for keeping costs down
Anyone that runs a profitable business will tell you that there is a great need to keep operating costs down. Doing so enables you to maximize your profit potential, of course! As you can appreciate, many startups seldom have plenty of cash to invest in their new enterprises. Many will even need to borrow money to pay for certain expenses such as machinery and professional tools.
A successful startup is one that finds a way to keep their costs down to the bare minimum. The good news is that it’s easier than you think to lower your startup costs without compromising on the quality or level of service that you offer to your customers.
Here are a few examples:
Outsource where possible. There is no need to do everything in-house yourself. There are only so many hours in the day where you can get things done.
If you do about five different jobs in your startup, things will begin to suffer as a result. Outsourcing makes it easy to delegate tasks without the need to hire employees.
Look at ways to make what you do more efficient. Let’s say that your startup sells physical products and ships them out to customers. If you knew where those items get stored in your warehouse, you could dispatch your stock quicker, thus increasing the amount of orders you can fulfill each day.
There are many ways to make a warehouse area more efficient. For instance, you could invest in some galvanized pallet racking systems from places like RedSteelmh.com. Or have a conveyor solution installed to move products quickly from one side of your stores area to another.
Only hire employees on a freelance or contract basis. One of the biggest costs to any startup is the hiring of staff. If you haven’t already, you will soon discover that employees cost a lot of money – and I’m not just talking about their salaries! A good way to get around that conundrum is by hiring them on a freelance basis. In essence, they work for you as another business, invoicing you when they’ve completed their work.
Another advantage of hiring contractors is there’s no requirement to keep them employed on a permanent basis. It’s perfect if you need help on a project-by-project basis and can’t guarantee there will always be work for them to do.
Have the right attitude
You can do all the cost-cutting in the world to keep your startup expenses down. But, if you don’t have the right entrepreneurial mindset, you won’t achieve your objective of becoming and staying profitable. That’s why it is crucial that you have the right attitude towards your business.
All too often, you see would-be entrepreneurs come up with all kinds of innovative ideas and even get to the point of starting businesses around them. Sadly, their startups don’t survive for very long because they don’t have the right attitude in business.
Whether people like to admit it or not, one needs to be somewhat strict and even ruthless in the business world. Sure, being professional and courteous to your clients is one thing. But, your job is to persuade them to spend their money with you and not a competitor. If you’re the sort of friendly person that bends over backward to give people free help and advice, they will keep coming to you for it. However, they will seldom spend any money with you!
Don’t assume the dream can always be reality
Another aspect of having the right attitude in business is knowing when to quit chasing an idea. Sometimes, entrepreneurs will find that their concept or innovation for the market isn’t turnout out how they expected it. Throwing money at an unprofitable venture is akin to chucking cash out of your window! It makes sense to stop, step back, and determine what changes you need to make.
Even if you have a brilliant idea, it could be that your target audience just isn’t ready for it yet. Sometimes, it can take a while for consumers to get used to doing things differently. One example of that is using the Internet from a mobile phone! Take a look at this post over at Quora.com to find out how to determine if the market is ready for your products or services.
Well, I hope you have found today’s blog post insightful and useful. Thank you for reading it.