When launching a startup for the first time, many entrepreneurs believe that they’re making the next big, buzz-worthy thing.
Unfortunately, in reality, this is not so. According to some recent research studies, only half of startups made it to the fifth year.
The reasons for massive startup failure are multiple, from the lack of market need and insufficient resources to poor marketing and great competition. These startup failure factors are usually caused by the lack of a solid market plan.
A business growth plan is your guiding star, showing you the way when running a business becomes too complicated.
Here are a few steps to take.
Identify your Target Audience
Your product cannot make everyone happy. Instead, you should research your markets and understand what type of audience would be interested in your products and benefit from them.
Who is already buying your products? The analysis of your customers’ demographics data, background, interests, problems, and purchase habits may help you learn a lot about the people that are really buying from you. If you’re just starting out, you should put yourself in the customers' shoes. What kind of problems they face every day? What are their main frustrations? Most importantly, is your product able to solve their problems and make their lives easier?
Based on the data you collect, you should segment your audiences according to their demographics data, preferences, expectations, and pain points. Most importantly, you should create thorough buyer personas that will help you understand your customers better.
Determine your Value Proposition
When entering your target industry, keep in mind that it is already overcrowded. The competition is fierce. The biggest industry players are investing large sums of money in marketing customer engagement and loyalty programs. Smaller businesses are striving to keep pace with them.
Therefore, to stay competitive, you need to establish a clear value proposition. Simply put, a value proposition is what sets you apart from your major industry rivals. It informs a customer about your brand and highlights why they should buy from you instead of your competitors.
Without a value proposition, a customer has no reason to choose your brand.
When establishing a value proposition, you first need to identify your product and emphasize all its benefits. For example, does it fill the gap in your industry’s product deficiency? Focus on your customers’ problems and exemplify how your product can help them solve the problem faster. The idea is to position yourself as an ultimate provider of help and value.
Sure, the value proposition depends on your industry. For example, if you’re selling organic cosmetics, your goal would be to emphasize the benefits of your product for a customer’s wellbeing. Hypermarkets, on the other hand, will probably want to focus on the diversity of products they provide at the most competitive prices.
Diversify your Cash Flow
As your company grows, it will start generating larger profits. And, to maximize your revenue in the long run, you will need to reinvest your company’s profits strategically. Sure, allocating most of your money to a single initiative or market is extremely risky.
This is exactly why you should consider minimizing the dependence on a single revenue stream and start diversifying your company’s early reinvestments:
- Invest in employee retention. Every time a top-performing team member leaves you, you’ll suffer great losses, from the rising cost of lost productivity to hiring, on-boarding, and training new, inexperienced staff. Talk to your employees and ask them what skills they would like to learn or improve. Only by providing them with career advancement opportunities will you inspire their loyalty.
- Invest in stocks. Don’t forget that buying a share of a business’ stock means that you’re its part owner. Pay attention to how the company operates, how profitable it is, what its major competitors are, etc. Instead of traditional stocks and bonds, you could also focus on newer industries, such as Forex that boasts simple trades, high liquidity, and better transparency and predictability. Forex is also an extremely volatile market, so be careful when choosing a trading platform. Do your research and go for proven brokers like Ever Forex, Pepperstone, Oanda, IG, or XTB.
- Invest in your business’ development. Think about developing a new product or improving the features of the existing one. What about expanding to new markets or teaming with another company in your industry?
When it comes to diversifying your profits, always make rational decisions. Do thorough research and test everything you do so you can determine whether your revenue streams are profitable in the long run.
Have a Solid Marketing Strategy
Marketing is the nerve center of your business. It spreads the word about it, helps you reach out to the right audiences, evokes their emotions, and increases their brand trust and loyalty. And, to get the most out of it, you need to strategize each marketing campaign.
Any solid strategy starts with the research. You need to know your audience (we’ve discussed this above), set clear goals of your strategy and determine your key performance indicators, choose the channels you will use to reach your audiences, build a detailed budget plan, and set a time-frame that will guide your performance tracking.
Then, you need to break up your marketing strategy into marketing tactics. Sure, this not something you can set and forget over time. Just like with any other aspect of your business growth strategy, your marketing efforts need to be constantly tracked, measured, and revamped.
Over to You
When building a growth plan, remember that there is no one-size-fits-all strategy to apply. To get the most out of your strategy, you will need to build it on your company’s specific objectives and needs. Most importantly, you will need to set clear goals, tie them with the right KPIs, and measure the performance of your strategy consistently. This way, you will identify the growth methods that meet your needs and eliminate those that don’t. Most importantly, you will develop a personalized business growth plan that will back you up as your company evolves.
About the Author
Keith Coppersmith is a business and marketing expert who has experienced both the rise and fall of many businesses. As a regular contributor at BizzmarkBlog, he enjoys writing and providing insight of the marketing industry based on both practice and theory.