What Startup Founders Should Know

A recent study from Fundera reported that  50% of small businesses fail during their first five years.

Running a startup is exciting, but it can also be confusing. What should you focus on? How do you make it a success? By following this advice, we’ll help your startup be one of the 50% that makes it past the five-year mark.

Your Team Is The Heart Of The Business

Always remember that your team is the heart of your business. Without your team of marketers, sales agents, and financial advisors, your business wouldn’t be able to function efficiently. It’s important that you pay your team fairly and support them professionally because they will be champions for your brand. 

Moreover, you should strive to train your team on everything they need to know. If your team is improperly trained, they won’t be able to effectively do their jobs and customers won’t get the best experience possible. We recommend spending time training your team on their job responsibilities as well as on company values and processes so they can do the best possible job.

Additionally, you should consider your company culture before hiring a team. Culture is pivotal in the success of a company. Consider what your company values are and what you want your company culture to look like. Do you prioritize time off? Teamwork? Empathy? Once you’ve established your company culture, you can hire talent that aligns with that culture and supports your mission.

The Customer Is King

Secondly, the old adage “customer is king” still reigns supreme. Your customers should be your number one priority. Without your customers, you’ll have no sales. And without sales, your business won’t survive. You should define your target audience prior to launching your business so you know what resonates with them and can sell to them effectively. 

We also recommend sending out quarterly surveys to track customer sentiment. By doing so, you’ll be able to see if your customers are happy with the products and services they receive and what you should strive to improve on in the following quarter. Through this process of listening to your customers and continuously improving, you’ll build a stronger relationship with your customers and nurture brand loyalty.

Budget Wisely

The third thing you should know when founding a startup is budget wisely. Your budget will allow you to manage your finances so you can continue investing in your business without filing for bankruptcy.

A typical startup budget will include the following sections.

• Projected revenue. Think about how much revenue your company is expected to earn in the future. You can look at competitors and your average growth from the previous quarter. Then, project how much revenue your company will make in the coming months.
• Fixed costs. Fixed costs are expenses that don’t change no matter how much output your company has. These costs include office rent, wages, and utility bills.
• Fluctuating costs. Fluctuating costs go up and down based on how well your business is doing. If you are selling a lot of products, your inventory costs will go up. For example, an ice cream company will spend more on ingredients during the summer. This is a fluctuating cost for their business.
• One-time costs. One-time costs are expenses that happen once and won’t happen again. By including this in the budget, you’ll be able to accommodate your business in case these costs occur again. For example, a bakery will have a one-time cost of buying an industrial oven. They only need to buy this once, so it is a one-time cost. However, it still must be accounted for in the budget in the instance that the industrial oven needs replaced.
• Cash flow. Cash flow is the section of the budget that accounts for how much money is coming in and out. Incoming cash flow refers to revenue made and cash outflow refers to money being spent.
• Profit and loss. Profit is the section that marks how much money is left after expenses are subtracted from revenue. Most businesses aren’t profitable at first. It takes time to invest in your company before making any real profit. For example, Amazon operated at a loss in its beginning and is now one of the largest companies to ever exist.  

Understanding how to budget will allow you to save money for necessary purchases and hold off on making unnecessary investments until profit allows.

Increase Efficiency Wherever You Can

Additionally, you should increase efficiency where you can. When you’re first starting your business, you may be just getting by, and that’s okay. However, as your business grows and you get into a better rhythm with your daily processes, you should look for areas to increase efficiency. By doing so, you’ll be able to save costs and increase productivity. 

For example, if you are manually entering your sales data, you may choose to invest in an automated CRM (customer relationship management) tool to save you time. By eliminating the time it takes you to manually enter sales data, you’ll open up your time to focus on pressing business matters.

Here are five things you can do to increase efficiency in your startup.

• Communicate clearly. By having open lines of communication between your team members, you’ll be able to collaborate more effectively and get more done. Ensuring that you are communicating clearly is also very important. To help communication go smoothly, you could use communication tools, such as Slack or Microsoft Teams.
• Utilize project management tools. Project management tools increase efficiency by tracking deadlines, organizing tasks, assigning responsibilities, and monitoring progress. Tools like Asana, Monday.com, Notion, and Project.io will increase efficiency at your startup.
• Automate repetitive tasks. Tasks such as email marketing, customer support chatbots, and follow-up communications are repetitive. You can save time and increase efficiency by automating these tasks. For example, you can use Shopify to automatically send your customers emails based on their actions. 
• Manage finances. You can save time by using accounting software to manage your finances automatically, such as QuickBooks.
• Focus on goals. Rather than focusing on the day to day, look at the bigger picture. Yes, it is important that the day to day runs smoothly, but you should make a point to set goals for the future and look at the big picture. Doing so will allow you to see room for improvement and expansion.

Learn More From Mythos Group

Want to know more about creating a successful startup business? Mythos Group can help. With over 20 years of global business experience, the team at Mythos Group will give you organizational strategies that will grow and sustain your business long-term.

Ready to get started? Contact Mythos Group at 925-262-8122 or fill out this form to be contacted by a representative.