By Hardik Harsora, Co- Founder of Effex Business Solutions
This article was originally published by Punjab News Express & Mumbai News Network
Mumbai, Dec 2016 – The Indianmarkets are raining start-ups. These range from Retail to IT in industry type; B2B to B2C in nature of business; invested to boot-strapped in terms of being funded; these could also be rich in experience or could be youngsters just out of college or the ones who are fed up of corporate life and want to start on their own; these could be doing business in either local, domestic or the global market. What’s more, these start ups could be started by folks who have stepped out of a corporate and want to start on their own or could be kids of a rich dad with an already established business empire who want to make their own mark. The reasons, backgrounds, experiences, markets and industries could all be different, yet they’re all here to make it big with that ONE IDEA which they feel is a path-breaker.
Each of these start ups are enthusiastic about how ‘different’ they are among their competition and how passionate they are about that ‘one idea’ they have. It is amazing to see their conviction when they begin their journeys. And that better be, because it is this very conviction that keeps them afloat in the early days. Lamentably, however, as days pass many of these start-ups are not able to sustain.
Studies say that only up to 5% to 10% startups become large and scale up and as much as 70% of the start-ups fail.
So what leads to such startling figures and the sad state of affairs? Most people would term the reasons to be uncontrolled high costs, and particularly, high marketing costs. Others would say that start-ups fail due to either poor economical conditions of the country or competition that entered as their copy. Some would also attribute the failure to lack of feasibility on the product or service. In fact, often start-ups make business plans based on gross assumptions of how the business would scale. A lot of start-ups fail therefore, at idea stage because of weak business plans.
So is there one way to save a start-up business from failing? The good news is yes, to a large extent there is a fool-proof way to play it safe. It is when a start-up business has the right ‘strategy’. Now strategy is a loosely used expression these days. A start-up business must essentially think through several key aspects like the right customer segment, offer, relationship and approach to begin with and several other key areas.
Startup businesses must answer if their product or service is either resolving an existing discomfort, or providing an additional benefit or is it simply getting some task completed for the customer. Strategy also involves profiling the customer segment in detail. Zeroing in on what age group the customer belongs, what location, gender, their preferences, likes and dislikes. Understanding where one will find that customer segment and how therefore should the business approach them. They have to design an offer so well that it becomes tough for the competition to engulf the market. It is also equally important for a start-up to plan an association with its customers so well that the customer will always choose to stay with the business and keep giving repeat business. A start-up business needs to then list down all tasks which are must-win battles to ensure that their strategy does not fall. They need to profile what kind of resources and partners they will require to make the strategy a success. Goes without saying that the costs as well as revenues need to be carefully calculated.
A strategy, no matter how feasible it may look on papers, needs to be validated well before a start-up actually begins. It is always a good idea to try small chunks and see results before taking the whole bite. There are score-card mechanisms one could use as well.
Not to forget that once the strategy is in place, start-up businesses must adopt robust processes for all functions of the business. This includes processes and systems for pre -sales, sales, operations, post sales and also for every support function like accounts, HR and so on. They must ensure constructive ways to hire the right people and deploy smart systems. A start-up must also make sure that every activity in the business is measured for optimum outputs at all times. The measured and tracked records must make available to the decision-makers relevant reports which can enable them to take accurate and timely decisions.
Our methodology ‘Propel’ helps the promoters of startup businesses not only brainstorm and think through several aspects in a scientific and logical manner to form the strategy, but also helps in implementation of processes and performance measures for the start-up. This helps the business to be safe from many stumbles that they would otherwise have on their way once they begin operations.