10 Step Guide for Start-up Success
One of the most influential and forward thinking management theorists of all times, Peter Drucker once defined the controlling word in the term “entrepreneurial management” for both start-ups and existing enterprise. For the start-up or new venture, he said, it is “management”. For an existing enterprise, it is “entrepreneurial”. In the existing business, it is the existing that is the main obstacle to entrepreneurship. In a start-up, it is its absence.
Here we talk about the steps that the management team and founders of a start-up can take to become a successful enterprise. To build a successful start-up company is challenging. Most of the times the founders are overwhelmed by the business process required to get the company off the ground and unsure of how to go about them with limited resources. With a long to-do list that includes everything from defining a target market to ensuring customer support, start-up processes can seem daunting. The following ten step guideline, if followed, will help an entrepreneur to grow a successful start-up from scratch:
1. Define and Refine Target market:
Given a start-up’s limited resources, the company needs to prioritize which customers to target with its technology and marketing efforts. It should research about its competitors and figure out if there is any need or gap that can be filled by its product or service. This exercise of market segmentation and targeting helps the start-up to position itself properly in the market, and help identify the channels to use to reach the market. Target market could include gender and age, income levels, lifestyle preferences, purchasing cycles, location, education, among others.
2. Define mission and vision:
Customers are always sceptic about start-ups. They don’t want to be associated with a new company whose purpose is not clearly understood. By defining a mission and vision statement a start-up can build trust factor among its target customers. Also, vision and mission statements are also very helpful in having members who are focused and bound together in common purpose. Not only do the statements themselves serve as a constant reminder of what is important to your organization, the process of developing them allows people to see the organization as “theirs.”
3. Build a team around the mission:
Start-ups have limited fund. So hiring is a crucial process to ensure success. It should form a team with members having complementary skills. Every member should be 100% sure about the mission and vision of the start-up and work together towards a common goal and its growth strategy. Creating the right culture in the team is also important. Many start-up founders struggle to devote time to define their culture from the beginning, only to come to the painful realization that culture certainly has an impact on the operational side of business.
4. Build product or service that fit the market:
How do you know if you are building the right product or service? This is where product/market fit comes in. Marc Andreessen, to whom the term is often attributed, said “Product/market fit means being in a good market with a product that can satisfy that market” The best team with the best product will fail if the market is not there. Therefore, the product or service should fulfil a need or gap of the target customers. Performing extensive market research to know about the competitor products and their shortfalls play a crucial role at this stage. The product should have appropriate points of parity and points of difference, right positioning and lucrative pricing to attract the target customers.
5. Business plans and cash flow projections:
“Plans are nothing; planning is everything” – famously quoted by President Dwight D. Eisenhower, rings true for all start-ups. Business plans are necessary because they help create focused strategy and realistic estimates of your prospects and position in the market. Though plans will change as you pivot based on market feedback, planning is what will allow you to launch and continue to iterate in the market.
Part of the business plan is also a cash flow projection for the business. In their enthusiasm, many entrepreneurs frequently over-estimate revenue and under-estimate expenses. On way to improve revenue estimates is by narrowing your target market down to a realistic niche, and then interpret revenue and expenses in terms of that market. Start by identifying potential customers, then slice off those who aren’t ready to buy, can’t be marketed to effectively, can’t afford your solution or don’t consider it a need. Create a projection of cash flow statement for at least 3 years and calculate the break-even point considering different industry specific financial ratios. This will be key part of your plan when investors evaluate you for funding.
6. Develop effective inbound and outbound marketing mix:
Now you need real customers. Use social media marketing, content marketing, and engage social influencers extensively to get a steady flow of inbound leads. Have a strategy to create and publish videos of your product/service, blogs, white papers, e-books, infographics, case studies, how-to guides, question and answer articles, product photos – to get users engaged and wanting for more. Build a small but effective sales and support team to connect with the visitors and eventually turn them to prospects or leads. List your start-up in different listing sites and create a buzz in social media and other marketing channels so that people get to know about your company, brand and what you offer.
7. Nurture the leads:
Managing and nurturing the leads are a very important step towards bring them to close and booking revenue. Lead nurturing has become an integral part of a successful marketing strategy—specifically when building relationships with potential buyers across multiple channels, even if they are not currently looking to purchase a product or service. Today’s potential buyers don’t become customers overnight—they require marketing over time as they self-educate and build trust with a company. Statistically it is observed that more than 20% of the leads are lost due to ill-defined process and poor lead management. So start-ups can use different business process management or customer success software to nurture their leads by segmenting a lead database and choosing appropriate content for each lead nurture track and audience.
8. Deliver goods/ services:
Customers always expect seamless delivery of goods or services. This requires properly educating the customers about your product or services. Equip the customers with sufficient number of tutorials and other help materials. If required hand hold the customers for first few days so that they become comfortable to use your product. Take care of every touch point with the customer as well as the entire journey to deliver an awesome customer experience.
9. Manage your business process properly:
This is a very tricky part. Project management and collaboration among the team members is very important. You can implement six sigma or lean methodologies to ensure less defects and reduced waste. This ensures steady growth of your company. Then comes the not-so-fun but necessary work of managing invoice, inventory, billing, etc. You should always take help of tools or software to successfully manage all these. Document management to keep track of collaterals, contracts, RFPs, proposals is another important aspect. There are a number of integrated CRM tools that take care of all of these. You should choose one judiciously based on your requirement and budget.
10. Ensure customer success:
Finally comes the stage of providing customer support. Modern day customers are very sophisticated and they have knowledge on their fingertips thanks to a connected social mobile world. So make sure you provide a seamless customer support across every stage of their experience. In the modern subscription economy, the economic value of a customer is realized over time, instead of upfront. Once you sell, you being a lengthy relationship with the customer. Great customer support experience helps generate cross sell, up sell or referral opportunities, which in turn helps generate new business from the existing customers or to get new customers. Essentially, have processes in place to help your customers be the best spokesperson for you in the marketplace.
So we can see that though building a start-up from scratch is a journey of thousand steps, following certain path along those steps can make the journey quite fruitful. New generation companies use effective business tools to further simplify these processes. This is where customer success platforms play a critical role in the growth trajectory of start-ups.