No one wants to pursue their dream of starting a business only to see it fold within 5 years. But according to conservative estimates, more than 60 percent of new businesses do just that.
But, there’s good news on the horizon. Venture capital is on pace for a record-breaking year. And it’s good weather for startups if you consider Bloomberg’s “Startup Barometer,” which reported that the startup climate is 112.99 percent healthier than in April of 2017.
But predictions and statistics can only do so much to weatherproof your business. Any number of factors can turn a promising venture upside down: a new competitor pops up and aces social media, eclipsing your brand presence; a valued manager suddenly exits; that flood of customers buying your product slows to a trickle; or as a leader, you’re so busy that you become disconnected from your team and can’t lead them effectively.
The trick is to construct your business on a solid foundation, so whatever the weather brings, your company can withstand it.
That means focusing on the four corners of your startup strategy: the leader, the leader’s idea, the team, and the customers.
Here are the four most important pieces of a successful startup, and why they matter:
1. The leader
It’s important to evaluate what you bring to the table as the leader of your business. Here are three areas to focus on.
Make sure you’re ready
You must be truly passionate, deeply committed, and even-keeled. Leading a company—particularly a startup—shouldn’t feel like a crazy gamble.
You can drastically improve your chances of business success with deep knowledge and great preparation.
Learn from others
If you have yet to experience business success, learn all you can from those who have—by finding a mentor.
It may be someone you know and respect in your industry or local area. Or, consider reaching out to these organizations: SCORE, supported by SBA (the U.S. Small Business Association) connects counselors, advisors, and mentors to aspiring entrepreneurs and business owners; and MicroMentor, which connects small business entrepreneurs with seasoned business professionals around the world.
You may want to consider formal college-level coursework, or online resources like business coaching videos or courses on sites like Udemy (where I offer “The Four Pillars of Business Success”).
Also, think about connecting with others who share your experience on social media. On LinkedIn’s knowledge mecca, Founders Forum, you can reach out and ask questions or share information.
You can’t be an expert in everything—you’ll have a team for that—but learn all you can about your industry, competitors, their products, and services.
But, as the organization’s cornerstone, everything starts with you, and depends on your abilities, skill sets, strategic acumen, business philosophy, and demeanor. It’s also up to you to build a unified culture that inspires employees to align their personal goals with the goals of the business, and give it their best.
2. The leader’s idea
How strong is your business idea, and how well have you fleshed it out? Consider the following areas, and make sure you have a strong vision and a business idea that actually solves a real need.
As the leader, you must make sure that your vision is distinct, coherent, and well-articulated. Even if it’s something radically innovative that has never been tried before, your team needs to clearly understand it.
You need to be clear on your company’s ultimate destination—so team members can chart a clear path to achieve it.
Solve a problem
Surprisingly, most new product and service offerings are not as revolutionary as some might think. Most are simply new designs for old products or innovative new ways to provide an existing service.
Make sure your idea has the power to solve a real-world problem that customers face. At its core, every great business idea is simply an answer to the question: How can we solve this problem for our customers?
Make sure that vision and its ideas are connected to a unique selling proposition (USP), and a well-developed strategic plan.
Land on the right idea
If you’re driven to start your own business but haven’t yet had that great idea, don’t give up: The internet is full of resources to help spark your creativity.
In Entrepreneur’s Business Idea Center, you’ll find nearly a thousand business concepts categorized by industry, interest, and profession. Bplans also has a guide to coming up with (and validating) a great business idea.
Or, take a more direct route by examining your own pain points: What problems do you need to solve in your own life? You may discover that your need for a solution turns into a great idea.
3. The team
Assembling a team with all the requisite capabilities takes time. Make sure it’s a team that shares your vision and commitment to creating a great corporate culture. That’s the environment that fosters the creation of a very deep bench of leaders committed to a best-in-class mindset.
Empower your team
A McKinsey report found that 90 percent of investors see the quality of the management team as the most important non-financial factor in evaluating an IPO.
A team that can transmit the leader’s vision to reach every employee is critical. The goal is that everyone can act as a proxy for the leader when the leader isn’t around, even during stormy times.
Growing or established, any company needs all the motivated, high-performing employees it can get. Establish clear parameters for your hiring process, and don’t settle for people with just the base qualifications and expertise.
Identify candidates with other, more intangible qualities—that will fit your company and culture. For example, evaluate each candidate’s potential for growth, and commitment to working with your team over time. You cannot develop a leadership culture with employees who are simply passing through on the way to their next job opportunity.
Cultural fit matters
Look for candidates who can work well with your team and clients, contributing to a harmonious work environment. They should be willing to adopt your vision and promote the right type of business culture—both factors are critical for success.
Far too many companies fail due to a lack of shared vision and dysfunctional cultures. Then, commit to employee learning and development as well as a collaborative, engaged, respectful workplace.
4. The customer
How well do you know your customer, and what will you do to connect with them and build loyalty?
Nothing matters more than your customer
It takes great leadership, strong ideas, and engaged employees to create the right conditions to attract customers. But it’s up to them to either buy or not buy your products or services: they are why your company exists in the first place, and they determine its survival.
A savvy leader learns everything about the customer base, builds a customer-centric culture on every level of the workforce, and never loses focus. Which way are the winds blowing? Are customers slowing down? Sustaining and growing the business requires not only a dedicated focus on the customer but a nimble approach, so the business can adapt to shifts in customers’ needs.
Engage at every point on the buyer’s journey
To know all about customers, their needs, and their buying habits, maintain an ongoing effort to engage them at every point in the buying process.
As the leader, it is your job to ensure that your team understands this important goal, so that your customer engagement strategy can be effectively implemented.
Reach customers directly
To build customer engagement, survey cards can be useful for brick-and-mortar businesses, but don’t ask more than three to six questions. On social media, such as your company’s Facebook page, try creating contests to get customers excited about doing business with you, or offer exclusive deals for responding to surveys.
Whatever options you choose, be as unobtrusive as possible: your information gathering is designed to improve the customer’s experience and increase their engagement. Give them an opportunity to tell you what they want, but don’t annoy them.
Most importantly, use the information you gather to become even more adept at what you do. Your goal should be to enrich each customer’s experience and continually strive to improve in every area of customer satisfaction.
There is no magic formula for success
No company ever becomes best-in-class and stays there by luck, or because it found that one magic formula. That kind of singularity won’t keep a business on its feet for long. It takes a fierce dedication to excel across all four fronts—every department, desk, function, and exchange.
To develop that dedication, you will need to have the right mindset and commit to sound entrepreneurial habits. Focus on becoming a better decision-maker by reducing the number of daily minor decisions you are required to make. Save your energy for the most important decisions.
Also, be willing to do what others won’t do—go the extra mile for your customers, team members, and company. Communicate constantly – with your team, your customers, vendors, investors, and anyone else with an interest in your success.
Develop flexibility in your thinking, so you can adapt to changing circumstances. Be committed to learning new skills and insights that could benefit your company. Finally, dedicate yourself to success. Refuse to accept failure as an option, and do the things that need to be done to achieve your goals.
As the leader, you are the driving force for the creation of a unified company culture of shared goals, objectives, and missions that help to fulfill the organization’s vision. When you have a clearly defined path, with everyone staying on course, others may slow you down. But they will never stop you.