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3 Tips for Startup Success

After declining during the Great Recession, startup activity is on the rise again. U.S. startup growth reached its lowest rate in two decades in 2013, but since then there has been a steady recovery, the 2017 Kauffman Index of Startup Activity shows. In 2016, each month saw 540,000 new businesses started in the United States. The outlook of new entrepreneurs is looking up as well, with 86.3 percent saying they started their business because they saw opportunity rather than because of job loss. This year is poised to be another good year for startups, in the wake of venture capital investments reaching a record level of $148 billion last year, Forbes reports.

If you’ve ever wanted to start up a business, this is a great time to do it. Here are three tips to help you succeed.

Start With Solid Market Research

The foundation of business success is a strong business plan, and the cornerstone of a winning business plan is solid market research. Market research helps you answer questions that are crucial to your company’s financial success, such as whether there is demand for your product or service, who your potential customers are, what type of benefits appeal to them, how large your market is and how much people are willing to pay for what you sell. Answering these questions can help you estimate your potential revenue, laying a foundation for a realistic financial plan.

You can draw from existing market research sources, such as government statistics, Nielsen polls or Think With Google. You can also conduct your own market research using methods such as surveys, questionnaires and focus groups. The Small Business Association provides guidelines for how to develop a market research plan and other components of a business plan.

Create a Winning Marketing and Sales Strategy

Another key component of a successful business plan is a winning marketing and sales strategy. Your marketing strategy maps out how you plan to promote your business in attract prospective customers, while your sales strategy outlines how you plan to transform your prospects into paying customers. There are three main ways you can use marketing and sales to grow any business, says marketing expert Jay Abraham:

1. Increase the number of customers you reach. 
2. Increase the average value of each transaction your customers make. 
3. Increase how often customers buy from you. 

In order to achieve these goals, there are many marketing tools you can use. In today’s connected market, your most powerful marketing tools are digital media channels. Among digital marketing channels, online video is one of the most effective promotional tools available. For instance, o-ring supplier Apple Rubber includes videos on its website showcasing its selection of 300 million o-rings. Video works well in conjunction with websites and social media as a promotional tool, and can be used to drive opt-ins to your email subscriber list, another important marketing tool. SCORE provides a detailed guide to other marketing tools you can use, which include online advertising, print advertising and word-of-mouth marketing.

Develop a Feasible Financial Plan

Your marketing and sales plan outlines how you plan to generate revenue. You also need to account for how you will cover your business expenses. To do this, you need a financial plan for your business. Your financial plan estimates your income and expenses for your first three to five years of operation and outlines what strategies you will use to cover your expenses.

Your financial plan should use your estimated income from your marketing plan and your estimated expenses to generate key financial statements for your business, including income (profit and loss) statements, cash-flow statements, balance statements and a break-even analysis. Once you have this information, you will know how much start-up capital you need and you can begin considering potential financing sources. Ways to finance your start-up include personal savings and credit, loans from family and friends, bank loans, crowdsourcing and angel investors. The United States government’s USA.gov website provides an online guide to help you locate business financing resources.

Doing background market research, creating a marketing and sales strategy, and developing a financial plan are three keys to launching your startup successfully. Covering these bases will give your startup a solid foundation for success by helping you pinpoint your target market, promote what you sell and plan for profitability.

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