At the onset, building a startup seems simple: take a great idea, put it into practice, and wait for investors. But complications, arising from an economic climate or internal problems, are bound to show up. Before the tech bubble burst, lazy development strategies passed muster, but investors today are smarter and wiser.
According to research by Shikhar Ghosh, a senior lecturer at Harvard Business School, three out of four startups fail. A possible reason for this is a lack of strategy: entrepreneurs are too focused on building their product and neglect building a strategy to grow and market their business.
It’s important to create an incisive business development strategy in order to raise a startup’s chances of success.
The following are some practices that entrepreneurs can incorporate into their business development plans:
Cut costs, not quality
Entrepreneurs should forgo the corner office with a view until they could actually afford it. Rent, for a small startup, is an unnecessary cost: a home office will do until needs cry for expansion.
Entrepreneurs should also consider other ways to cut costs without compromising quality. For example, instead of having full-time employees for non-essential tasks, entrepreneurs should consider outsourcing them to freelance workers.
Startups should consider a “release early, release often” approach. Minimum Viable Products (MVP) have only the necessary features needed to earn money and get constructive feedback from early adopters. This is more cost-effective and less time-consuming than creating a product with the maximum number of features on it and hoping it appeals to customers.
Create a marketing plan
A good marketing plan will build awareness, create and reinforce the company’s image, and develop a solid customer base. It also differentiates a startup from the competition and provides reasons for potential customers to choose its products or services.
The above two tips are just the tip of the iceberg: there are many other things that entrepreneurs need to incorporate into the business, marketing, and financial sides of their business plan. Beginners to the world of business will benefit greatly from the guidance of an experienced business development leader.