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Thinking about building a startup in 2017? You’re going to be up against a huge challenge this year. It’s a lot different building a startup today than it was a couple of years ago. It is far more competitive, the advertising costs are much higher and you have to do a much better job in acquiring customers. It’s great that you have the entrepreneurial spirit and courage to walk down this venture. But what you need to know are the key factors that are essential to building a startup.
You Need a Detailed and Evolving Budget
Many business owners don’t think too much about their budget in the beginning. This is a big mistake. How you manage your budget determines how quickly you can scale. It might be hard to figure out how to spend your budget in the beginning because you don’t know what will result in the highest returns. Despite that, you want to do the best you can to come up with a budget plan that is best suited for your new business. Start the process with shopping for the best vendors so that you can make a website and get all the other tools/services you need.
Once you start the production, advertising, marketing and other operational costs, you’ll start to get an idea of how to allocate your budget. Then, you need to pay attention to your cash flow if you want to able to scale as quickly as possible. Not knowing how your cash flow works out and not managing your cash flow limits your ability to advertise on time, hire freelancers, pay your partners, etc. This can hurt your business very quickly, so you need to be vigilant about it.
Use Multi Channel Integration
While you want to focus on one channel at a time when you start out, you eventually want to use multiple channels in an integrated manner. For example, if you’re building a SEO campaign, you’re going to need to get your content distributed to start building links. In order to do that, you want to utilize social media to get as much visibility as possible. You’ll also find that blogging will serve you in your SEO campaign. Building a successful blog will promote your brand and establish your authority.
The idea here is that you can’t just make a website and send some traffic to it if you want to compete online in 2017. You have to utilize all the marketing channels together for maximum effectiveness. Again, you still will have to focus on one channel in the beginning. However, you’ll find that as you use multiple channels together, they’ll all continue to grow and you’ll eventually be able to scale into the other channels.
Establish a Strong Brand Identity and Positioning
It’s so difficult to stand out in this competitive digital space. If you want your startup to pick up steam, you need to build a strong brand identity. You can build your brand through great content, press, partnerships and great marketing. However, you need to come up with a brand identity that sets you apart from the masses. This can be based on the quality of your product, customer service, technology, pricing, unique features, etc.
Your brand will need some kind of positioning to fend off competition. For example, if you’re financial investing services, you can use a high average rate of return as your positioning. If you’re selling a speaker system, you can position off the promise of delivering high fidelity sound quality at affordable prices. Most startups start off in the right direction but falter because they end up blending in with all their competitors. Make sure you put a lot of thought into the unique advantages of your brand.
Figure Out Your Numbers
To succeed in any business, you need to be meticulous about your numbers. You need to know how much it costs to acquire a customer, how well your sales material is converting, the lifetime value of your customer and your return on investment for specific channels. These numbers can help you make the right decisions in your marketing and advertising.
For example, if you’re selling a product that costs $100 and it costs $150 in a specific advertising channel to acquire a customer, you may think that it would be stupid to advertise. But let’s say you figure out that your customer value through the first year is $400. You’d be more than happy to continue advertising in that channel because you know you’d be coming out profitable in the long run.
Build the Right Systems
Building the right systems will allow you to use your time efficiently, help scale your business and make your business easy to manage. Upon hearing systems, you’re probably thinking about automated software systems like email marketing tools, content management platforms and social media software. Those solutions will definitely make up some of the systems in your business but the big focus should be on systemizing as much as you possibly can in all areas of your business.
For instance, let’s say that you manage an email newsletter and depend on email marketing for revenue. You should build a system that helps you brainstorm promotions or content, test the best email subject lines, set up campaign tests, and schedule your email. Instead of going around in circles, there is a straight line to accomplishing the task or goal.
There is a lot that goes into building a startup. While it’s becoming harder every year, there are so many more resources available for entrepreneurs from education, software tools, resources, communities, to advertising channels. For this reason, launching a startup is still a worthwhile ambition to follow.