Starting a business is not an easy feat. Making your startup a success is also equally difficult – if not more. Achieving success in the business world is not just about surviving. It is all about rapid growth, and a startup, or an established enterprise for that matter, requires a fool-proof growth strategy for survival and success.
Here are the seven key steps that comprise an effective growth strategy for startups:
1. Know your value proposition
Understanding the value proposition of your business is the firm foundation of an excellent growth strategy. It is essential to define how uniquely your company is qualified to fulfill or exceed your customers' expectations.
Your ideas may be good. But to transform the ideas into business success, you need to establish a significant value proposition.
Putting forth a distinct value proposition for your business helps you attract potential investors, generate positive cash flow, and eventually become market leaders. A good value position begins with an in-depth analysis of audience behaviours and their preferences.
A typical value proposition has a headline, sub-headline, and a maximum of three bullet points.
2. Identify the target audience for your business.
An excellent understanding of your target audience is essential to prevent you from creating wrong marketing messages and repeating false product enhancements.
To deliver the right product, understanding of the right audience is mandatory, and here is how you achieve that:
Make use of survey(s): Conduct surveys using newsletters or email blasts. Partnering with reputed market research firms helps a great deal.
Analyze market data: You can get a lot of information about your target audience from your competitors. What markets your competitors serve, what products are selling hot, etc., will offer you great insights about your target market.
Capitalize personal networks: Your networks such as friends, family, relatives, colleagues, investors, and mentors are great sources of valuable audience information. Their feedback about your products and services helps you shape your buyers' profile – a representation of your target customer and their distinct qualities.
3. Identify key performance indicators for your business.
Identification of key performance indicators and measuring them carefully will facilitate wise resource allocation.
Some of the useful business performance metrics are:
CAC (Customer acquisition cost): Total costs divided by the total number of new users.
CLV (Customer lifetime value): Total net profit contributed by a customer during their association with the company.
Burn rate: The rate of capital spending. The amount of money spent over a given period.
Gross profit margin: An estimate of profit, the revenue after deduction of costs of products sold
Conversion rate: Number of conversions in proportion to the total number of visits
4. Monitor your competition
Analyzing your competition help you effectively face challenges that your competitors might have already solved. Watching out for your competitors prevents you from making the same mistakes that your competitors made.
5. Hire smart people
Recruiting the right people, especially during the early stages of your business, is very important. Spending on the wrong employee leads to considerable loss of traction, business momentum, and profits. A supreme hiring culture invariably characterizes successful companies. Try to hire the best employee for any job role by analyzing one's personality traits to avoid hurdles.
6. Responsible scaling
Spending money before achieving product-market fit is an important reason for startup failures. Avoid premature scaling by keeping an eye on your spending habits, debts, and overheads.
Choosing coworking space can save you thousands of dollars yearly, and it also allows you access to shared resources that help faster scaling without huge spending.
7. Review your business model
A periodical review of your business model and its restructuring is essential to drive business growth and success. You need to check if your business goals are met. If not, test your ideas. If there is not any growth, do not shy away from changing your business strategy.
Your goals must be current and relevant and not be outdated. When ensuring this, you also need to keep your employees informed about them. Organizational goals and personal goals of the employees must match for any business to thrive.
The above-explained aspects are important for building a powerful growth strategy that ensures the survival and success of your business.
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