The Startup Stages All Entrepreneurs Face

As an entrepreneur you’re no stranger to being challenged. I’ll explain the startup stages all new businesses face and how to get through them.

If you’re a new business owner or thinking about starting a business, you need to face the fact that nearly 80% of all small businesses fail in the first 18 months. Most failures can be linked to poor planning, bad budgeting, or an unclear goal. If you know what to expect at each of the several startup stages, you’ll be prepared to be part of the 20% of businesses that make it.

Entrepreneurs are faced with challenges that most people don’t understand. While they may be part of a company that was started with a dollar and a dream, by the time they get on board, things are running like clockwork.

To be prepared to be wedded to your business, in sickness, and in health, know what to expect at each of the startup stages. Here are the 6 most important stages of your startup and what kinds of struggles you’ll face.

1. Researching Your Concept

Don’t you love when you’re struggling with a problem and someone sits back and tells you a “simple solution” as if you hadn’t thought of it? Everyone has ideas for businesses or solutions to make life better. Very few people have what it takes to turn those ideas into reality.

Once an idea is put into the world, the next step is to introduce it to the ideal audience. Before your startup launches, you need to build support for your idea during the early startup stages. This is where you start reaching out to your earliest investors.

In order to build support, you need to have a strong idea of who your target audience is. Get to know what problem you solve and which solutions they’re already using.

Map out soberly whether or not people really need your service or if you can find a way to carve out a niche to differentiate yourself from the pack.

No matter what industry you’re getting involved with, you should know what the terrain looks like. Have an understanding of who the leaders are, who is doing a great job in your local market, and even reach out to find out how they became successful.

If you’re not creating a product that’s directly in competition with them, they could be willing to lend support and recommendations to you. You can skip a few missteps by listening to what worked for them and where they failed in the past.

With your research, a strong mission statement, and a business plan that maps your goals over the coming years, you’ll be prepared to succeed.

2. The Commitment Stage

When you’re starting to build your company, it’s time to put your research into practice. If you’re developing a specific product, you need to start building your first prototypes. During this process, you’ll get a feel for what it takes to create the products you plan to sell.

The process for your first prototypes will be less efficient and more costly than it will be later in your career. Don’t worry if you struggle during this early stage. So long as there’s a foreseeable way to lower your cost on the minimum viable product, you’ll be able to keep the doors open.

During this period, start to build word of mouth and early support. Send out prototypes to some key customers and get their feedback. After you’ve rounded off the edges of your product or service,

3. Get Some Traction

Out of all startup stages, this one can be the most difficult. During that first year of your startup, you’re going to need all the validation you can get. You won’t know if your product has any purchase in the public until you start getting support.

Traction will lead you to growth. Building a strong initial customer base that helps you to expand your network should be the goal of your traction phase.

Don’t mistake traction for growth. One of your products can take off but if those initial sales taper off, you need your business to continue forward momentum. Traction ensures that if those sales drop, you still continue a slow climb toward the growth you’re seeking.

4. Refining Your Strategy

After you’ve crossed the initial 1-year mark, you need to stop and take an assessment period. Bring your core team together for a half-day feedback sessions. Have them tally their mistakes during the first year and bring in suggestions on how to grow.

This will help you to streamline your product development, deployment, and promotional processes. Get to know what works in your market when it comes to digital advertising.

During your first year, you should be finding ways to check in with your customers to receive feedback. If you skipped this step, send an outreach email to your most loyal customers with a survey. Sweeten the deal by offering a special promotion to anyone who responds and completes the survey.

Refining your strategy means welcoming criticism. While not everyone will package their criticism in the friendliest way, you shouldn’t be afraid to take feedback seriously. As you show your customers what you’ve done to improve your products and strategy, they will respond positively.

Track all of your promotions to ensure that you’re not wasting advertising and promotional money.

5. Scaling Up

Once you’ve found your footing and streamlined your process, you should think about how you can expand your customer base. Offer referral promotions, get on social media, and start getting your products into new markets.

If you’ve got strong traction, the only thing you need to help to expand your customer base is time. Take some risks, communicate with customers, and continue to take feedback. Keep your long-time customers happy but offer what the market is looking for when you hit years 2-3.

You’ve Completed the Startup Stages

Congratulations because your company is now an established brand in your market. Making it to your third year as a brand is a big accomplishment and you should celebrate. Celebrate every major milestone with your day one customer to give them yet another reason to stay invested in your brand.

If you’re interested in more strategies to get you through that first couple of years, contact me for tips.