Do you want to hear the harsh reality? Nine out of ten startups will fail before they can even make a profit. While this is the reality you must face, it is far from fixed and unchangeable results for your entrepreneurial venture. Your success or failure will be determined by how well you manage daily operations, not by historical data and industry statistics.
Here are tips from Christopher Salis for taking better control of your startup’s operations:
Consolidate and Negotiate
By consolidating expenses and negotiating better prices with your suppliers, you can save a significant amount of startup capital. For example, consolidating your print and mailing house services with one provider can significantly reduce your annual budget for direct mail services. It saves money and reduces the number of things you have to keep track of. Once you’ve negotiated original prices for inventory stock, make it a point to renegotiate on a regular basis, especially for businesses that have recently experienced a surge in growth, which allows you to claim better pricing from your business partners.
Measure Every Detail
Knowing precise business metrics is prudent business management. It’s especially critical if you’re trying to manage your finances and balance your cash flows. Drill down into your numbers and make sure every detail is correct. According to a Forbes article, metrics important in startup management include average revenue per user, revenue run rate, customer acquisition rate, churn rate, and operation efficiency. Depending on the industry and the size of your startup, you may need to include additional metrics to obtain more accurate data.
Prioritize Training and Hiring
Startups have the cushion of having fewer employees than larger companies with 100 or more workers, and it means you can devote more time and attention to each employee. Participate in your employees’ professional development by training them through in-house programs and workshops, providing advice and mentorship when possible, and allowing them adequate recovery time throughout the work week. Instead of having your HR department or employees interview for you, you should be present when hiring. Inquire about their skills, experiences, and other relevant information that can help them stand out for the job.
Startups can be challenging to manage, especially in the early stages when the company is vulnerable to almost everything it comes into contact with. Nonetheless, it is a worthwhile venture to pursue. Use the tips above from Christopher Salis to increase your chances of surviving in the startup world and, who knows, one day exiting a unicorn startup with a large sum of money in your pocket.