Developing a Solid Growth Strategy for Startup Companies
It’s a well-known fact that many startup companies (about 50%) don’t survive the first five years of operation successfully and only one third make it to year 10. So, what is the key to being one of the successful companies that survives the long haul?
Growth strategies!
Without a deliberate, thought-out growth strategy, you may end up losing money and/or losing business to your competitors. To establish a good growth strategy:
1: Set up a value proposition
What sets your business apart from the competition? Why should I spend my hard earned money with you and not with your competitor? Figure out what makes you different and then how you can convey it to potential customers.
Examples of value propositions are Walmart being well known for cheap prices and Target for providing the full shopping experience that you don’t want to leave. Once you set the value proposition, you need to stick to it or you risk diluting your brand in the eyes of your customers.
2: Identify your target market or ideal customer
Everyone that starts a business does so in response to a problem that they found in their environment. Who else is facing the problem that you have developed a solution for? My first business mentor had us actually draw a picture of our ideal customer, give them a name, a job, a family, etc. to help us really get into the head of our target customer and I have done that exercise ever since for every business model. Every time you exercise your growth strategy, remember your target audience.
3. Define key indicators or key performance indicators
Metrics are ways to measure where you are at in progression to your goals. How will you know if you have reached your goal if you have no numbers to measure your progress? What key indicators impact the growth of your business the most and how can you dedicate time and resources to improving those indicators?
4. Add or maintain revenue streams
The best way to build a solid foundation for a business or personal financial plan is to have multiple revenue streams in the event one is not solid or decreases temporarily, always have multiple fall back plans. What are your current revenue streams and what can you add to help your company be more sustainable? Be sure to do your research into feasibility & sustainability before implementing new ideas or products because not every idea will work out or equate to sales. Consider bootstrapping or using trials for new revenue streams to keep costs down until they are fully sustainable. I have bootstrapped almost every single business that I have ever started and it works well if you do it right!
Developing a solid growth strategy for your startup company is paramount to keeping your business thriving and will help it to survive past the pivotal 5-10 year mark when most startups tend to struggle or fail.
What suggestions would you offer to startup companies that are working on setting up a growth strategy? Would love to hear your thoughts!
Thanks for reading,