As a startup founder and the owner of three businesses, I know all about failure. I’ve made my fair share of really dumb mistakes throughout my career, especially in the early years; however, I’ve also been fortunate enough to learn from those mistakes and never to make them again.
And so, I’m going to share my insight on why only one out of every ten startups will succeed and make it see its second and third birthdays.
1). Strong Market Research and Target Audience Definition - The founders and business owners who have conducted the proper market research are more likely to have startups that succeed because they made sure there’s a demand for their product or service. They don’t spend weeks or months trying to guess what their market(s) want.
2). Product or Service Differentiation - Founders and businesses owners who have a product or service that’s different from the rest of the competition (it’s unique, better, or innovative), have a pretty good chance that it’ll sell, which means their businesses will probably be successful.
3). Business and Marketing Planning - Smart founders and business owners plan each stage of their businesses. They have short-term and long-term plans including measurable goals and results. Without a plan, a business is more likely to fail.
4). Strong Leadership - Businesses with strong managers and founders do better because employees feel appreciated and, therefore motivated to perform better.
5). Scaling at the Right Time - Many business owners fail because they scale their businesses too quickly by hiring too many employees or spending too much money on marketing in the beginning. However, business owners and founders that control their growth are the ones that win.
6). Knowing the Numbers and Showing Profitability - Business owners and founders who know their numbers and show profitability are more successful than business owners who don’t a sense of their customer acquisition costs and the lifetime value of their customers. They also understand the differences between revenue and profit as well as know how to read financial statements.
7). Clear Core Values - Businesses with clear core values and communicate them through marketing are more often successful than businesses that don’t have them. Core values often times include honesty, transparency, integrity, quality, respect, among many others.
8). Business Owners/Founders are Accountable - Successful business owners and founders hold themselves accountable for their actions and write down their goals to make sure they stay on track.
9). Business Owners/Founders are Action Takers - Successful business owners and founders plan and then take action. They don’t let procrastination or perfectionism get in the way of launching a new product or service or growing their ventures.
If you’re in the 10 percent of businesses that are succeeding, we’d love to hear what you’re doing in the comment section below.