The thought of starting a business might be a little frightening, but with the right plans in place, new businesses can turn from barely-getting-by startups to flourishing, profitable businesses.
In the article, “5 Tips for Profiting During Those Crucial First 5 Years in Business,” featured on Entrepreneur’s website, www.entrepreneur.com, contributor Firas Kittaneh explains that, according to Gallop, 50 percent of new companies in the U.S. fail during their first five years in business.
“For aspiring entrepreneurs, that statistic can either be a source of anxiety or a source of strength,” says Kittaneh in the article. “Building a profitable startup that can withstand the test of time is no small feat, but it is not as daunting a task as the numbers make it out to be.”
The article continues by offering five tips for a successful new business:
- Measure the market. Validate the revenue potential for a product/service before investing too much into something people might not even purchase. First, survey prospective customers to determine what their needs/wants are, then build a minimally viable product (MVP). Finally, see if anyone will pay for this MVP. Once your product/service idea has been validated, you can scale it.
- Change price. People are price sensitive but their reaction to the cost of a product/service can be counterintuitive. Cheaper goods may grab a buyer’s attention more, but these products/services might not be viewed in the best light. The price of a product/service should demonstrate its value. Charge a premium on products/services.
- Establish loyalty. Some businesses may abandon established customers to find new prospects. Smart companies will instead find innovative ways to demonstrate their appreciation for their customers. “Over time, owners are able to increase a customer’s lifetime value and encourage more organic referrals and positive word-of-mouth,” notes Kittaneh.
- Competition can help business. Trying to one-up the competition may lead to short-term gains, but at the expense of long-term growth and happiness. Competition helps a business more than it hurts. To increase awareness of your different offerings, find opportunities to work together with your competitors. Instead of establishing competitors, create friendly business relationships.
- Remember to sleep. The less sleep you get, the less productive you are during the work day. Spend more time getting a healthy amount to sleep to ensure optimal performance while you are awake. “When you get a good night’s sleep every night, you produce better work during a seven- or eight-hour work shift than you would during a 48-hour work marathon,” explains Kittaneh.
Read the entire article here.