These days, startups are everywhere. Research from Challenger, Gray, and Christmas shows for the fourth quarter of 2016, the percentage of people starting their own businesses is the highest it's been in four years.
7.4 percent of job seekers in the United States started their own businesses, up from 4.8 percent in the fourth quarter of 2015. For the full calendar year, 6.1% started their own businesses, the highest we've seen since 2009 when 8.6 percent were starting their own businesses.
The Common Thread
The common thread for most of them is their basis in technology. And while these startups are doing well, there's something to be said for the ones quietly launching outside of the tech space.
In the United States alone, there are 28.8 million small businesses, as reported by the U.S. Small Business Administration. Defined as businesses with fewer than 500 employees, these account for 99.7 percent of all businesses in the America.
Business and Economic Growth
These businesses play a major role in economic growth, as data shows in the first three quarters of 2014, small businesses added 14 million new jobs to the economy -- 39 percent of which came from very small businesses -- those having fewer than 50 employees.
But, when you consider that roughly 2/3 of businesses survive two years, half will survive five years, and only 1/3 will hit the 10-year mark. The longer a company stays in business, the longer it is likely to remain in business. The Bureau of Labor Statistics says the business survival rate across industries is pretty consistent.
How can you break past the tech barrier to launch a successful startup in another industry, setting yourself up to make it beyond that first couple of years? It all comes down to building traction.
Invest Your Time
Yes, it's true you'll need to invest money, but it's more important in the beginning to invest your time – by doing things that don't scale immediately. Make the time to network with others and market yourself before you market your product.
- Reach out to people who are using competing products or services. Talking to them will help you learn more about their pain points and what they like about the competition, so you can learn about ways you can improve your own product or service.
- Offer influencers in your niche free access to your product or service, if you believe they would promote it to their followers.
- Reach out to blogs, newspapers, and other press outlets so you can inform their readers about yourself and your product.
Work on a Pre-Launch List
Build an email list of people you can connect with before you launch your product or service. Tell them about what you have to offer and how it can benefit them. Mention the features, of course, but focus more on the benefits of what those features offer.
Speak to their pain points, and show them, rather than tell them, when possible, how your product or service will make their lives better.
Use that prelaunch list to start pre-selling. Offer anyone who preorders a special deal – like a discount or a reward for referrals. You have an endless array of options to choose from.
Develop Partnerships
As part of your networking efforts, work to find other companies or d businesses that are willing to build integrations with your products. If you can't find anyone to integrate with, consider finding businesses whose products or services complement yours.
For instance, if you create dog treats, you could talk with dog toy companies, pet stores, and even veterinary offices.
Andrew Brown, President of WP Diamonds, says: “Strategic partnerships are key to growing your business. Whether you decide to work with a digital marketing agency, an app developer or simply outsource your web development efforts, it is important to invest time in finding a partner that can add value to your company.”
Handle Your Funding/Cash Flow Issues
Funding is a major issue for many businesses – but particularly startups and small businesses. One study shows 82 percent of businesses do so because of cash flow issues. It's not just the amount of money that comes into the business, but the timing that the money comes into the business, too.
If your invoices aren't paid until after your loan payments are due, you're going to run into issues. This is an even bigger issue for seasonal businesses that don't have money coming in during their offseason. Make sure you're on top of budgeting and analyzing your cash flow statements.
You can do this with online tools like Quickbooks, so you don't have to spend a lot of money hiring a bookkeeper or an accountant until your business scales accordingly. Bootstrapping your business is possible, but can be stressful.
Planning Your Next Moves
Once you've developed the momentum with visibility among potential customers, work toward connecting with a technical partner to handle that side of your business.
You'll need help with your website, creating a mobile app (if there's a necessity for it in your niche) and possibly even making sure you're hiring the right employees for your startup.
While many startups can handle being a one-man or woman show for quite some time during the momentum building phase, to scale your efforts accordingly, you'll eventually need to bring more people onto the team.
Photo Credit: Adobe Stock