Coming up with a million-dollar idea is just the first step on a long journey to startup success. Building a sustainable business requires a clear understanding of the value you provide, your own strengths and weaknesses, and how to keep your revenue flowing. Here are six essential tips to turn your startup into a booming business.
1. Understand your value
What value do you provide to your clients or customers that your competitors don’t? If you can answer this question with confidence, you’re already on the right track. This is essentially the reason you’re in business, and should form the foundation of all your marketing activities. Get it right, and you’ll create a clear, consistent, and powerful brand that your market will respond to and your employees will buy into.
2. Protect your cash flow
Cash flow is like oxygen for your business. Starve it of incoming revenue for too long and it will suffocate. To prevent cash flow bottlenecks, clearly communicate your payment terms to new clients before you begin work and set a schedule of milestone payments for large projects – rather than waiting for the project to conclude to invoice. Offering clients a modest discount for early payment is another strategy you can employ, and it’s often more effective than imposing late fees. Also, prioritise clients who pay on time over those who don’t.
3. Avoid charging flat fees
Time is money for startups. So, if project timelines blow out because a client has changed their mind, added deliverables, or changed the scope of the project, you could end up in trouble. Charging an hourly or daily rate will protect you against losing money if you underestimate the time commitment required for a given project. If you must charge a flat project fee, ensure the deliverables are clearly set out and that the client understands any additional work will incur extra fees.
4. Recruit for your weaknesses
Don’t fall into the trap of thinking you can do everything in the business. We all have different strengths and weaknesses, so when it comes time to hire employees, look for people who fill the skills gaps. Don’t have the gift of the gab? Hire someone who can get out there and sell your products or services. Are you more technically minded? Hire a creative who can polish your brand.
5. Beware of discounting
It can be tempting to offer discounts as a way to super-charge your growth. However, be very cautious when it comes to competing on price. You’ll run the risk of getting locked into a race to the bottom with your competitors, and your clients may not value your products or services as highly if you’re happy to accept bargain-basement prices.
6. Stay flexible
Economic conditions, client needs, industry standards, and technology all change at a rate of knots in the modern business world. Flexibility is vital if you want to keep your startup relevant for long enough to turn it into a profitable venture. Seek regular customer and client feedback – and listen to what they are saying. This will be your blueprint for the future.
A brilliant idea alone isn’t enough to turn your startup into a profitable business. That’s why you need to understand what you do well, constantly reassess your offering, and evolve with the changing needs of your clients or customers. Do that and you’ll be well on your way to victory.
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