Regardless of the industry, the rate of business startup failure exceeds everyone’s expectations. Whether the reason behind this is incompetence of the leader, negligence, lack of experience or funds, there is no doubt that indulging into the corporate world is extremely dicey. Market competition is tough, and thereby intimidating for young entrepreneurs who are looking to realize their startup idea.
Such endeavor poses a great deal of stress, since many cannot afford themselves to lose what they have invested. After observing the statistics, it is highly likely that without the ideal product for the target market, proper advertising campaign and long-term business plan, you are bound to face the inevitable failure. A number of businessmen would argue that it is in fact impossible to go through with your idea without sufficient funds. Nevertheless, there are several steps you can take to launch your startup on a tight budget.
Testing the Thrusters
It is of prime importance for a startup founder to believe in his vision, but approaching the idea with a little bit of healthy skepticism is necessary. Only then are you in a position to understand and accept alternative points of view. Testing whether there is a need for the product or service on the market is essential in order to set a solid ground for your startup to thrive.
Upon determining the profile of your prospect customer, aim at selecting a group of people for a qualitative research. Composing an anonymous questionnaire is one of the most effective ways to receive sincere answers. It should consist of questions related to the product itself, the price, design of the package, as well as open-ended questions where your target customers would have the opportunity to list both strengths and weaknesses. On the other hand, if you opt for an interview form, select a reliable third person to conduct it in order to ensure you get honest answers.
Finally, even after the product has hit the shelves, make sure to receive customer feedback on a regular basis. Although you had invested a certain amount of money in a test trial, the sum is insignificant in comparison to the profit your company is bound to earn.
A good advertising platform is a foundation to success. Even if the test group has given the high ratings, pitching it to the wider audience is fairly difficult. Not everyone is able to instantly afford high-quality advertising campaign such as the ones Coca-Cola releases. A young entrepreneur is highly likely to have limited resources, so they are to approach the marketing strategy with utmost creativity. Applying for a traditional loan can take you weeks, or even months, only to be notified that you are not approved with one.
Crowdfunding has been one of the primary reasons for the startup boom in the last decade. By starting a crowdfunding campaign, young entrepreneurs are presented with the opportunity to collect sufficient funds for realizing their startup idea. In addition to collecting money through this alternative method of financing, potential customers are able to familiarize with the product. There is a multitude of crowdfunding platforms, Kickstarter and Indiegogo being the industry leaders, which contributed to the success of Pebble Technology, OUYA video game console, Gosnell Movie, Veronica Mars and many more.
One additional strategy requires preselling your product. Not only is it an effective way to raise the money, but an excellent advertising strategy. While you might not be reaching out to wider audience, you are still building solid client base.
On the other hand, if you are willing to share between 20 to 25 percent of your company, you can always turn to an angel investor for help. Although it might seem risky granting a third person with an ownership, an angel investor is actually a professional with a strategic experience who will provide you with both money and valuable insight.
3, 2, 1… Liftoff!
Ultimately, it is important to remember that if you manage to keep solid ground in the industry for several years, you should think about expanding your business, especially if there is a growing demand for your product or services. Partnering up with other industry influencers is highly recommended, since they are able to offer you much needed support. Still, you are required to carefully select the other person, someone who will bring different skills to the table while sharing and understanding your vision. Start with successful entrepreneurs you find in your area and gradually expand to building long-distance business relationships. Additionally, you should include business travel in order to maintain such relationships, as they are to be to your advantage in the long run. Even though via numerous online communication form we are able to communicate with our business partners at any time, regardless of your physical location, nothing can compare to the old-fashioned face-to-face meetings.
In the end, to ensure that your business scales over time, you are required to develop certain managerial skills that will provide you with confidence to make smart business decisions and provide a strong role model for the employees. By acquiring essential human, technical and conceptual skills, you will not be in need of a professional services. You can fill the position yourself and avoid any unnecessary expenses.
Building a startup business on a budget is challenging, although not impossible. In the past few years we have witnessed a growing expansion of startups across the planet. Thanks to the aforementioned public funding options, we are surrounded by a number of high profile business that started as startups. Once you have your financial way cut out, it is your creativity and business strategy that will make your startup a success.