Citing 2021 U.S. Bureau of Labor Statistics data, Investopedia reports that about 20% of new businesses fail within two years of opening. Meanwhile, 45% fail during the first five years, and 65% don’t make it to their tenth year. Just 25% of new businesses last at least 15 years.
How can you increase your start-up’s chances of staying the course? Through utilising the strategies detailed below, you could grow your business more quickly and provide it with a financial ‘cushion’ for when tough times hit.
Be selective about who you recruit
No company is just a soulless logo and set of branding colours. Behind every corporate success story is a human success story — and that’s why, whenever you are looking to employ someone, you should be diligent in making sure it is the right someone.
One particularly strong plus point of having a solid team at close hand is that you would be able to delegate tasks and consequently free up more time to spend on higher-level responsibilities.
Don’t attempt to grow your business too soon
If your business model is fundamentally flawed, then any company you grow speedily on the back of it could soon come spectacularly crashing down like a house of cards.
Rather than just going for growth, then, you should initially focus on simply building a track record of successful trading. That way, and once you have complemented it with some market research, you can more easily assess whether the market demand is strong enough to support your growth plans.
Look for funding options
Paradoxically, as your business grows, so will the costs of running it. For this reason, you ought to research an array of funding options, as you might need to dip into them in order to sustain your company’s growth trajectory.
While the bank would be one institution worth approaching at first, you could also consider alternative funding solutions outlined by Start Up Donut — with grants and loans all on the table, depending on whether your business meets the respective eligibility requirements.
Focus on catering for your existing customers
It makes sense that it can be much easier to garner increased custom from existing customers than woo new ones. After all, your existing customers already very much know what your business is about, and will have started following it in the first place for this reason.
You could find that, by introducing some kind of customer loyalty scheme, you are able to spur an even higher number of repeat purchases than usual from these loyal buyers.
Be willing to adapt to changes in the business landscape
“By allowing yourself to adapt and change quickly, you’re able to test different approaches to business and find out what works best,” Christian Lanng, the CEO of corporate software provider Tradeshift, enthused in comments made to Business News Daily.
He added that this experimental strategy “allows you to fail, pick yourself back up and keep going.” Nonetheless, you could also remove a lot of trial and error from the equation by engaging business growth planning consultants to help you with facilitating your company’s growth.
Spend money to make money
While you are waiting for your business to outgrow its start-up roots, any profit margin you carve out is likely to be very slender. So, what should you do with any profits you do make at this stage?
“A start-up’s ability to invest in itself [helps] accelerate growth,” Lanng says. “In those early years, it’s critical to make sure that you’re redirecting any revenues back into the company. It’s vital to invest early and heavily in order to grow quickly.”
Strive to exceed your customers’ expectations
If you do succeed in this particular mission, customers are likely to let their friends, relatives and followers know — and, in this way, foster positive word of mouth about what you offer.
You can enhance your customer service through various means. For example, after someone has bought from your company, you could follow up with the customer for their opinion on the product or service they received.
Exercise corporate social responsibility
Often, customers will have causes that are particularly close to their heart. Perhaps they are especially eco-conscious, and so are committed to buying sustainable products. Alternatively, the customer could be donating regularly to a cancer research charity.
When your brand practices social responsibility, such as by donating a certain share of its profits to charity, you can attract customers who share the same values as your company and are consequently happy to support it.