The majority of startups fail. Ninety percent of them, in fact. Between initial launch and the fifth year of business, 70 percent of startups go under.
While these numbers are the current reality, they don’t have to be your fate as a business owner. With careful planning and deep strategic thought, you can remain competitive and profitable for years to come.
Today, we’ll discuss where most startup founders and business owners go wrong, and how you can position yourself to stay in the game!
Most startups miss the mark
The number one reason startups plummet? Misreading the market.
A research study by CBInsights found that almost half of startups decide to close up shop because there is little to no market need for their product or service offerings. In other words, these brands did not accurately understand the needs of their target audience, let alone meet them.
Business owners are notorious for getting wrapped up in tactical efforts to engage with their target audience. Whether it’s the beautifully designed promotional materials, the perfectly polished website, or social media growth and engagement, “Shiny Object Syndrome” can quickly lure founders into a false sense of momentum. Most only awake from this state of being when they realize that their money is running low, and their ROI is nowhere to be found.
Regardless of what tactics you daydream about having in place, these efforts are not sustainable on their own, no matter how rewarding they feel today. Tactics are inefficient without a strong backbone: strategy.
Stay ahead of the curve
Believe it or not, stagnation doesn’t always look like standing still. Maybe you consider
yourself to be a busy business owner, and maybe you are! However, if you are focusing your energy (and capital) in all of the wrong places, it doesn’t matter how much time and effort you put in. If your actions aren’t aligned with a larger brand picture, your frantic actions are just as detrimental as standing still (if not more so).
Working harder is not the same as working smarter. This is why my first step in working with clients is to help them slow down for strategy. Once a founder has created the space to think in this way, they can more effectively analyze and respond to the market dynamics that inform their results. Market findings are critical to a company’s trajectory, though most fail to even look!
Run a strategic marathon, not a tactical sprint
Founders often spend their days running tactical sprints. But a sprint, by definition, is short-lived. You set off to the races when you launch your startup, but what happens next? This lack of strategic planning is where many go wrong.
Yes, you must “startup,” as the name implies, but don’t slow down or stay put. If you want to be in business for the long game, you have to think about making your efforts last the course. This means understanding the market and your positioning within it and developing systems and processes that sustain you long-term.
Keep your finger on the pulse with competitive intelligence
As mentioned, most startups fail because they don’t effectively meet the demands of the market. This could mean misunderstanding the problem at hand or simply not developing an offering that resonates with the target audience.
From market dynamics to audience psychographics, market size to effective pricing, developing a competitive intelligence program takes the guesswork out of bringing your product or service to market. Moreover, it allows you to translate market research into practical results.
When you utilize research to orient your brand in the marketplace, you can more effectively answer this central question: what does my prospective customer really need?
Once you’ve got that answer on lock; you can map out your game plan. One that meets your audience where they actually are.
Business success isn’t about being lucky; it’s about being strategic. It’s about having a plan and effectively implementing it. As the age-old saying by Benjamin Franklin goes, if you fail to plan, you are planning to fail. And this is exactly why so many startups do!
If planning falls by the wayside, so will you. A high-level strategy is a requirement if you want to be one of the fortunate few.