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As reported by Small Business Administration, the failure rate of startups as of 2019 is nearly 90% with around 21% of startups failing in their first year. Research shows that a substantial amount of newly established businesses fail because of a lack of planning in key business areas. We have made a list of a few things you must consider before launching your startup to ensure your survival in the long run.
1. Detailed Budget Planning
People often start businesses on a whim. You don’t want to do that if you’re hoping to stay in business for long. Being too calculative is deemed as something negative by people who see the business world outside in. Though it’s quite the opposite in real life. While it’s true that exact costs cannot be calculated before you enter the market, it’s still wise to plan your expenditures and forecast your income. Having a detailed financial blueprint helps you see and minimize potential challenges
2. Flexibility in Business Model
While we are planning, we often forget that there is a lot that we do not know yet. There is not a lot that will be consistently true throughout the launching process. You need to be flexible while making your business plan. Every business model needs to be modified, amended, and in some cases, even changed completely. If you adopt less flexibility, you will have a hard time accepting changes later on. Therefore, it should be taken into consideration that market trends change and if they do, changes will be required in your business model.
3. Getting a Legal Structure
In the ultra-competitive world of business, you need to do everything right from the start. There should be no deferrals when it comes to acquiring a legal structure. Not getting a legal structure is equivalent to being a part of the informal economic sector. It renders you unable to initiate lawsuits. In many states, monetary penalties are also inflicted on unregistered businesses. To ensure your survival in the long run, you need to get your business registered or incorporated before you start trading.
4. Properly Scheduling the Launch
The excitement that comes with launching a startup can make you do crazy things i.e. launching before you are ready. People think once they launch, they can gradually get things in order. If you get too busy getting things in order after the launch, how will you handle your clients? You don’t want to be working through a backlog of paperwork when you should be out in the market, attracting clients.
5. Knowing your Target Market
A very common start-up mistake that almost everyone makes is not devoting enough time to understand the target audience of their business. Going through market trends and using different software to analyze market data is not enough. You need to be fully apprised of the needs and wants of your target audience. Building a good product is not enough. You also need to make sure that it’s targeted to the right market in the right way.