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Every business founder I know dreams that his new business will grow exponentially, and become the next billion-dollar revenue producer, with commensurate success and payback to the founder. Many don’t realize that their passion and unique skills are not scalable, or that their market is limited to a highly specialized customer niche, a specific locale, or very seasonal.
While I always recommend starting a business you love and fits your lifestyle, it always pays to temper your perspective with the realities of your own image in the marketplace, scalability of certain business models, and the costs in time and money for every element of the business. Not every new business on the Internet is an opportunity to get rich quick by its global reach.
Here is my summary of some key success strategies and insights that I have garnered in my years of investing in startups, mentoring aspiring entrepreneurs, investing, and working in a range of businesses, large and small:
1. Establish yourself as an influencer or expert online. With today’s instant access to information via the Internet, your personal reputation is even more important than your product or service. Customers buy from people they recognize and trust, rather than just comparing products descriptions, marketing, and price. Don’t hide behind the scenes.
2. Look for a painful problem with a large market. New technologies may be exciting to you, but many of them don’t address problems that a large customer set is willing to pay real money for. New gadgets and toys are fun but will likely only appeal to a small consumer subset. These days, all markets are global, so factor in cultural considerations.
3. Solicit customer recommendations and feedback. Website and advertising content from customer reviews and feedback has maximum impact, since consumers now look to other customers for trusted perspectives. I recommend that you initiate and mediate discussion boards and other customer events to expedite business recognition.
4. Choose a business not constrained by personal skills. Scalability requires volume production. sales, and support. If your solution requires your personal touch, such as artwork or manual handiwork, it will likely never scale to millions of customers. Plan ahead for automation and outsourcing to maintain inventory required for all channels.
5. Develop and document a target plan with milestones. If you haven’t plotted a route to your destination, you probably won’t get there, and you certainly can’t measure progress. A written plan helps you to think through all the challenges ahead, and it certainly shows your commitment to partners, team members, and investors you need to help you.
6. Invest in modern software tools and artificial intelligence. Website and e-commerce sites can now be set up with inexpensive software rather than requiring a major project. Similarly, you can automate almost every business function, such as taking orders. Take advantage of new technologies, such as artificial intelligence, to outperform competition.
7. Set to scale quickly by outsourcing and remote staffing. Take advantage of the gig economy and freelancing to grow and pivot on demand. This is more efficient than the long hiring cycle for in-house employees, as well as reducing the need for office space, training, and benefits. It also allows you to keep your eye on business growth initiatives.
8. Implement loyalty programs and subscription services. You need a continuing and recurring revenue stream to expedite growth. Other sources of revenue could include premium support, special loyalty programs, and personalization. Look for opportunities to use the “razor blade model” to garner additional revenue and growth from supplies.
Most important of all, I recommend adopting a mindset of never giving up, and resilience to overcome all challenges. Starting and growing a new business requires constant problem solving and continuous learning. Set your expectations accordingly and don’t allow a victim mentality to set in. Do what you love to do, have some fun, and let making money happen all by itself.
Related: 8 Steps to Turn Your Dream into a Competitive Business Today