3 Tips to Avoid Startup Failure
Starting a new business is one of the scariest and most stressful things you will do and thats because only 20% of startups survive past their first year, 50% make it past 5 years and less than 30% will see their 10th anniversary. Scary stuff! The good news is that survival rates begin to flatten out after several years of operation - the longer a business lasts, the more likely it is to last even longer.
As a branding consultancy, a vast majority of clientele are startups, so we have a fairly good perspective as to why some succeed while others fail. Yes, everyone knows the main reason is simply running out of money or making disastrous decisions, so how do you avoid ruin and despair?
Here are our 3 tips to help you start off strong and establish a clear position in your market:
Tip No. 1: Goals - Setting a clear objectives and milestones
Before officially starting a business, every owner should set very clear and SMART goals for both short-term as well as and long-term gains. More than 80% of small business owners don’t keep track of business goals and this usually results in major changes that happen beyond their control. Whether you plan to grow internationally or obtain a high profit, ask yourself - who do I want to be in the future? Where do i want my business to go? How do i see my business in 5 years, 20 years, heck even even 50 years? Will I sell it as a whole? Go public? Leave it for my children? If you don't know what you’re actually trying to accomplish it gets harder and harder along the way to find motivation and focus.
One of the major reasons we see businesses fail is primarily due to the fact that the decision-makers are not on the same page. One partner wants to go left, the other wants to go right, and what you end up with is decision paralysis, aimlessness and a general resentment in the air. If the entire team isn't rowing in the same direction, chaos ensues. So before you even think about writing a business plan - set your goals!
Tip No. 2: Identity - Defining a likeable and consistent personality
Brands are like people - we associate with the ones we like, and we generally like the ones that resemble us, understand us and give us what we want. Branding agencies generally design with a specific personality in mind - its how we come up with logos, colors, photography styling and all other visual representations of a brand. How do we do that? We hone down on the brand’s personality archetype. Should this company be a Rebel like Harley Davidson? A Hero like Nike? Or a Creator like Apple? Defining the archetype helps us create a unique identity.
For instance, lets say we’re designing a brand for a camping lodge - we can safely assume this would be an “Explorer” brand like Jeep or Lonely Planet. We delve in to the characteristics, aesthetics and general values of an Explorer e.g. they want to understand the world better, they’re curious about exploring the unknown, they value freedom, safety and practicality, they are adventurous and like to go on journeys of self-discovery, their core desire is to experience a more authentic and fulfilling life, their greatest fear is being trapped or even worse, being bored. The brand’s personality must always resonate with your core audience and your main job is to ensure its consistency and constancy.
Tip No. 3: Actions - Undertaking an inspirational mission
Starting a business is never complete without an honest and motivational mission that drives your stakeholders. It declares your company’s purpose, business plan, why you exist and what you’re trying to achieve. The main job of a mission is not simply be a bunch of text on your website, it is supposed to remind your staff every single day why they are there and what they’re trying to accomplish. Aimlessness is a cancer to any business - make sure your mission is very clear and specific.
Starbucks has one of the best mission statements because it is very warm and honest: “To inspire and nurture the human spirit - one person, one cup and one neighbourhood at a time.” There’s no mention of selling the best coffee or becoming number 1, employees don't relate to grandiose business goals. They need something relatable and much more personal. Think of your mission as your battle cry, it doesn't have to be paragraphs of buzzwords, just a short and strong statement that will inspire your troops to run into the battle field. So keep it simple and realistic!
Ultimately how you captivate and motivate your team will directly effect your sales and growth, so always give staff a reason to believe in you. Having clear and strong goals, a likable personality and an inspiring mission can certainly guide your culture and lower your risk of failure due to aimless money-spending and making bad decisions. So before you start wiring your business plan, contemplate the above tips and hopefully you’ll have a clearer idea of what you’re trying to achieve, how to do it and, most importantly, why you’re doing it.
At Blackink, we’ve truly understood that branding is less about logos and more about telling your story and defining your purpose. We’re happy to help you figure all this strategy stuff out, just give us a call.