Strategies to Accelerate Startup Growth
Startup founders step into their current market with impressive ideas. Most are looking to disrupt that market with their own idea, product, or service, grow as quickly as possible, and become a profitable business. However, the rate of startup failure is intimidating, and startup growth is not always easy.
Most business analysts agree that startups face unique challenges, but overcoming those challenges is doable with diligence and persistence. Here is a closer look at why startups often fail and important strategies to overcome those challenges to support startup growth.
The Challenges of Startup Growth
According to National Business Capital, 6.5 million new businesses come to life every year, but barely a handful achieve success in the long term. Startup failure rates actually stay pretty steady at about 90 percent, with more than one of five failing in the first year and half failing by year five.
The question then becomes, why is startup growth so seemingly difficult to pull off? The Harvard Business Review offers a nice list of common challenges pretty much all startups have to overcome in order to experience startup growth, such as:
- Overcoming fear of formal business structure
- Trying to emulate established businesses too closely
- Preserving and maintaining cash flow
- Managing pivots in structure as the startup grows
- Bringing in the right expertise
To succeed, startups must move forward mindfully, implementing strategies along the way to curb some of the aforementioned challenges.
Tips for Supporting Startup Growth
Although startup failure is common, a few tips and strategies make a lot of difference in the stability of a new small business. Take a look at five of the most important tips to accelerate startup growth.
1. Set clear goals from the beginning
It’s romantic to consider some startup founders jump into a business head first without a clear plan and see success. Sure, it happens, but this is a bit like winning the lottery—chances are slim without set goals and a clear roadmap of how to get there. Plus, founders that intend to seek any level of venture capital really need clearly defined steps that show a prospective backer how their money will be used and what returns should be expected.
This particular strategy to support startup growth combats that major challenge that befalls a lot of newcomers: a fear of structure. A startup may be entrepreneurial and loftier, but at its heart, it is still a business for profit, and that business must have operational goals.
2. Focus on branding strategies to differentiate
There can be a hundred similar businesses in one niche with similar services or products, but some brands stand out. This is because efforts have been made to make that brand stand out because of its unique appeal, usually from the beginning. As noted earlier, close emulation is never a good plan to support startup growth for the long term.
Consider the dating site Plenty of Fish as an example. Founded in 2003, this startup built its entire business model around the brand persona and mission: there are plenty of fish in the dating pool and that’s what really matters. Even though other dating apps came about with flashier functions, Plenty of Fish kept its brand clear-cut and simple. That company eventually sold for over half a billion dollars.
3. Don’t hesitate to monetize and test revenue models
Building an audience is no doubt important, but, as a startup, cash flow is going to allow the business to keep moving forward to accelerate startup growth. To see any level of cash flow, monetizing services or products as quickly as possible is a big deal. In short, if the product a startup offers is not profitable early, ideas are never as validated as they should be. Don’t be afraid to test early products and concepts, see how they stand up in the related market.
4. Bring in new revenue streams when feasible
A startup can be built solely around one product or idea, but in order to stay relevant over the long haul, adapting is usually a necessary thing. Once a startup has built a steady customer base, it can easily offer something new to a market that is now more familiar and easier targeted. New revenue streams strengthen that originating business model and give a brand more financial footing, which supports startup growth for the years to come.
5. Get support from outside experts where needed
Startup founders are often brilliant people. They have innovative ideas, know how to capitalize on what people want, and may even be well-versed in business. However, there will always come a point when a startup needs to bring in outside expertise. Most often, startup growth will reach a point where it becomes obvious that new expertise is needed to guide the financial future of the business. This may mean bringing in essentials, such as accountants, a managing financial controller, or even an executive-level professional like a fractional CFO (chief financial officer).
Accelerate Startup Growth with a Little Help
No matter the industry or intent of a new business, implementing the right strategies and bringing in expertise that may be lacking can be just what it takes to succeed. The A Team continually works with startups to equip them with the essentials, management, and executive financial professionals they need. Ready to discuss how we can accelerate the growth of your startup? Reach out to get the conversation started.