If you have got a great business concept and great aspirations then it is a good idea to plan ahead.
Where will your start-up company be in a year?
How about two years or even five years’ time?
Undoubtably, forecasting is never easy, especially when you are only just starting up. However, one great way of predicting the threats that lay in front of you is by examining the millions of companies that have previously been through it.
What it takes to survive
While every start-up campaign is different in the long run, a great number of businesses will go through what are broadly the same stages as they develop and evolve. This is referred to as the start-up lifecycle.
It is true that some companies undoubtably take longer than others to advance through each phase, some may even stray off the path or take a detour along the route. Nevertheless, any successful company will proceed through all the principal points, eventually confronting many of the same issues on their path to long-lasting success.
1 – Solving the problem
Operating a successful company is all about generating something that solves your customer’s issues.
If there is an entity annoying you in everyday life and you have a way of resolving it for everyone, then why not try to make it happen while earning some cash at the same time?
Obviously, companies do not just spring into existence the second you have a lightbulb moment, there is a great deal of practical and financial obstacles to overcome when tying to make your imagination into a reality. However, having a lucid and efficient solution to a global problem is one hugely significant step forward.
At this point you should be fully immersed in analysing the demand and market eagerness for your product/service. This is done through social media, surveys, crowdfunding sites and some direct conversations. Generally, any way you can collect data will be of benefit and if your investigations turn up issues with the plan, then you can tackle them and glide through your revised theory in the exact same way. Carry on researching, querying, and modifying until you have what you require to draw up a practical blueprint. The next stage is to begin creating your vision and making it a reality.
2 – Development
This is where it starts to get serious.
In order to accurately examine your hypothesis in reality, it is a necessity to create a prototype or an MVP (minimum viable product) for your start-up. The goal here is to get as near as you can to the final solution, without wasting a huge amount of resources in the process. Mainly because you will have to exclude most of your MVP, as you proceed through the trial and development phase. We would caution you not to go for broke at this stage.
The amount of people, time and money you will need to create your MVP will differ considerably and is subjected to the nature and complexity of your service or product. If yours is a resource intensive business, you may require funding at this stage, whether through family, friends or angel investors. In addition, as with the previous phase, you will need to carry on analysing and re-testing your prototype or MVP with your target audience. This will enable you to get to a point at which you have an something that works and matches an actual need. It does not have to be fool proof, but it does need to be worthy of investment and have a realistic prospect of becoming a viable business model before you decide to move much further forward.
3 – Entering the market
After you have created your MVP to a point whereby everything appears to work the way it should, it is time to hit the market.
There is more to this than merely erecting a stall and selling your wares, you need to get your product market ready. Fundamentally, this means fine tuning your product to meet the (sometimes fairly fastidious) demands of your target market.
Achieving the optimal product market readiness, is a continual process which you are likely to reassess time and time again, during the lifetime of your company. However, it is most prevalent in the early stages.
Make sure you keep up your research and analysis of results. Communicate with your customers, address their issues, capitalise on your USP’s and then repeat.
When you start to get the formula right you will notice that your business gains momentum and you will begin to see an increase in customer retention. Customer retention as a rule is agreed to be gold standard by which product market-fit is measured, so ensure you ask an abundance of people, one if they would buy your product again and two if they’d advocate to family and friends.
Of course, marketing is also about the message you are putting out and how effectively you are doing that. Marketing, like any business activity is a process of testing and measuring, take the time to continually investigate and determine what does and doesn’t work.
4 – Scaling
So now you have a product that functions, you’re achieving your marketing aims, your business model is demonstrating itself, now you need to increase your capital potential.
However, be aware it’s extremely common for start-ups to attempt to scale before they’re properly equipped, and this is not ideal. Attempting to grow too rapidly can edge towards burnout, increased error rates and can lead to chaos with regards to your brand image.
Remember the larger you get the larger and more entrenched your competitors will be. In other words, if you can’t take the heat get out of the kitchen. When your channels start hitting the saturation points you will be ready to scale. Once this occurs, call upon the specialists and put your resources into developing further channels. At this time, you may find it is viable to seek more funding. It is possible you are pitching to venture capitalists at this point and putting serious focus into building your business culture and team.
Alongside this you could be investing in outside associates, non-execs and so on to assist in specialist areas.
Scaling is a process that requires careful planning and preparation. Often it will be just one area of your business that you need to scale first in order to make room for or put the infrastructure in place to accommodate the growth of others. Make sure you seek out and get good advice on this stage.
5 – Maturity
The description of maturity for an organisation is pretty broad.
After all, the most prosperous businesses are those that continuously fine tune their product, push growth experiments, scale or scale back channels and are normally in a permanent state of flux.
So, what is to say exactly when a business has ultimately “Matured”?
Nevertheless, if you’ve got an entrenched foothold in the market, are influencing your industry, turning a profit and have good customer retention, its fair to say you’re approaching or already into business maturity.
Depending on your ambitions at this stage, you may be thinking about your personal exit strategy. This can be through something like an acquisition, or if you are feeling confident, listing your business on the public stock exchange (an IPO). On a personal level, it’s possible you need a good holiday, or even to regain your work life balance.
However, if you’ve been captured by the entrepreneur bug there’s always a chance you’re ready to move on to your next business adventure. Starting a business is hard work (but it’s definitely easier the second, third or subsequent time around). Be aware that as a creator you may fail to see the details for the bigger picture at times. Acknowledging where you are on the start-up lifecycle can be beneficial helping you to remain motivated and focused when the going gets tough.
And always remember, good advice is invaluable.
If you are on your start up journey, whatever you stage, we specialise in helping you make a success of it. Get in touch today!
Call us on 0203 150 0565 or email info@thealtitudeagency.com.
