Currently, only around 50% of startup businesses survive more than 5 years and, unfortunately, many of these startups fail to achieve a product-market fit. Without a startup growth strategy in place, many startups have no clear map to lead them towards long-term success. (Image source)
When entrepreneurs take ideas and then try to turn it into a profitable business, then it is, of course, a cause for celebration. But, this isn’t enough to keep on doing the exact same thing. Having continued success depends on having evolving strategies in place and, in order to grow and scale-up, business owners must prioritize a growth strategy.
If you want to position your startup for success and have goals of building a growth strategy which actually works, then here are 4 simple steps.
1. Know Your Value Proposition
One of the first steps towards building a smart and successful growth strategy is to understand the value proposition of your startup. The value proposition should fully explain how your startup is qualified in order to meet or even exceed your customers’ high expectations.
Many entrepreneurs find they miss out because they never articulated a value proposition which was compelling. Establishing a value proposition is vital if you want the journey to start from your from ‘idea’ to building a successful company. Startups which fail to solidify a unique proposition often find that they have trouble when it comes to engaging with potential investors and generating positive cash flow, alongside becoming market leaders. Good startup propositions demand careful analysis of preferences and audience behaviors, so you should try to limit the value proposition to just a headline, sub-headline and then three bullet points.
2. Identify Your Target Audience
The second step you should take towards building a realistic growth strategy is to identify your target audience. Without having a clear understanding of your audience, then you are much more likely to focus on the wrong product or service highlights or create the wrong marketing messages and these miscalculations can cost your business thousands, potentially. Thankfully, there are a number of ways in which you can identify your target market.
- Gather Survey Data: start by sending out surveys or newsletters as, in many cases, startups will often partner with established market research companies.
- Review Your Personal Networks: As a startup, you should make the most of any connections you already have. Ask your friends, family, colleagues etc. to have a look at your service or product and use their feedback to gather some initial assumptions on your target market.
- Analyse Market Data: Look at your competitors to gather invaluable information and insights which are related to your target markets. Who do your competitors choose to market to? Which of their products are the most popular? Why do customers choose to buy there?
3. Establish Key Performance Indicators
It is rather difficult to measure the success of your startup without defining a few key performance indicators first. The savviest of startup owners will focus on the key performance indicators which most affect the growth of their startup and then dedicate the relevant resources to these areas.
Startup founders cannot hope to grow their company in a meaningful way without first having an almost obsessive focus on the KPIs. This focus, ideally, should not be limited to the KPIs themselves, as these are primarily just measurements of the outcomes, but instead, founders should have an understanding of which levers can be pulled and what tweaks should be made in order to improve their business.
4. Scale Responsibly
As a startup business, you should avoid any premature scaling by closely monitoring your spending habits (both personally and business-wise), avoid debt and limit any overheads. Spending too much money before you have an established product and market is the biggest reason that startup businesses fail.
As a new business owner, it can be tempting to take out large credit cards, borrow huge sums and think big, but this is an easy way to quickly get into stressful situations. If you need money quickly or in the short-term, then rather than borrowing a lot at a time, instead consider a short-term option, such as bridging loans. However, one of the easiest ways to keep on top of your spending in the first 6 months to a year as a business is to rent a co-working space, rather than invest in a sole-use office.
Startups who choose to use a co-working space over traditional office space can potentially save tens of thousands per year and they can also choose to quickly scale up or down, depending on your growth, without having to pay large fees or break lease agreements. Teams who work in co-working spaces often find that they have more flexibility than they would in a traditional office and find it helps them get used to the way in which they want the business to run before introducing new employees.