If you’re thinking about starting your own business, your main concern is probably how to make a profit grow the business, and overtime. Considering that 10% of startups fail within their first year, it’s easy to see why entrepreneurs can be discouraged and think growth is impossible.
However, it’s important to note that most of the startups that failed did so because the person who was running it didn’t have the right skills and tools needed to achieve success. If you don’t want to see your startup fail, you need to know all the strategies for staying competitive and growing your startup in 2021.
Thanks to technological advancements, businesses of all niches can take advantage of tools whose main purpose is to make their jobs easier and speed up growth and advancement. Unfortunately, many business owners either don’t use any tools or even worse, use the wrong ones.
To achieve growth, you need to be able to view all of your processes from every angle and see what needs to be done so you can achieve the optimal business outcomes. This can be achieved through process mining.
Process mining uses real data to identify any inefficiencies and inform you what needs to be improved. When you apply process mining at the organizational level, you can achieve the following:
Discovering automation opportunities. Through process mining, you can identify repetitive tasks that can be partly or fully automated via RPA (robotic process automation). As much as 78% of people who automate say process mining is key to enabling their RPA efforts.
Tracking your digital transformation strategy. You will be able to track your digital transformation to see if all day-to-day operations are going according to plan.
Creating fact-based customer journey maps. It will be easy to gain insight into how your customers interact with your business and the touchpoints they use.
Allowing data governance. Process mining can help you see how data moves through your company, which will allow you to complete privacy and risk assessments.
Improving compliance and auditing. You will be able to easily diagram your audit and compliance procedures according to defined standards, making it easy to be CCPA and GDPR compliant.
If you aren’t completely clear on your startup’s value proposition, it will be impossible to build a successful company. Your value proposition needs to explain how your startup can offer products or services that are unique and can meet or even exceed customers’ expectations.
A high number of entrepreneurs fail because their value proposition wasn’t well-defined or compelling enough. If you want to turn your business idea into a successful startup that has growth potential, you should establish a substantive value proposition.
It’s important to note how most startups can break into the market by engaging interested investors. You won’t be able to pique the interest of potential investors without a good value proposition that was created with a careful analysis of audience behaviors and preferences.
Your value proposition needs to be convincing but not too long or boring. Try to limit it to a headline, sub-headline, and three bullet points. Keep in mind that 45% of startups fold due to lack of capital or profitability. If you don’t create a good value proposition, you’ll probably fail for the same reason.
Unless you have a clear understanding of who your target audience is, you won’t be able to create good marketing techniques and you will probably focus on the wrong product enhancements. If you don’t know who is most likely to buy your products, you will hardly be able to make a sale.
To establish your target audience, you need to identify your target market by doing the following:
Gathering data via surveys. You can send out surveys to potential customers via newsletters or email blasts to find out what their needs are. You can partner with an established market research company to make this process easier.
Analyzing market data. Gather information from your competitors to gather insights on their target markets. Find out who their target audience is, why their customers choose to buy products from them, and which of their products are the most profitable.
Gathering information from your personal networks. You can look at your friends, family, mentors, and colleagues to gather valuable information and insight. Ask them to examine your products or services and use their feedback to create an idea of what your target users might want from your business.
When you collect enough data and information, you can use your findings to create buyer personas, which are fictional representations of your ideal customers and their unique qualities.
Key performance indicators, better known as KPIs, are measurable values that companies use to determine how well they’re achieving their business objectives. Most startup founders focus on the KPIs that affect the growth of their company.
While you need to have a great focus on your KPIs, you should also keep track of all the changes that can be made so your KPIs can improve.
Some of the most important KPIs you can focus on are listed below, but are not necessarily limited to these. Nowadays, there are useful resources like sample KPI libraries that offer a wide variety of metrics from different industries and departments that can be used as a starting point for your performance management.
Customer acquisition cost (CAC). This figure represents the cost that goes into acquiring a new customer. It’s calculated by dividing the total cost of customer acquisition by the number of new customers you acquire during a certain period.
Customer lifetime value (CLV). The total net profit you receive during the entire relationship your customer has with your startup. You can calculate it by dividing the average order divided by one minus the repeat purchase rate. To get the CLV, subtract the number you get by CAC.
Burn rate. This is the rate at which your startup spends its capital. To calculate it, you need to take a look at how much money you had at the beginning of the quarter, how much money you burned during the period, and divide it by the number of months during the observed period.
Gross profit margin. The revenue you earned after paying off the costs of sold goods, which is calculated by dividing revenue minus the cost of goods sold.
Conversion rate. Finally, this KPI measures the desired action your customers took and is calculated by dividing the number of conversions by the number of total visits.
Growth is something every entrepreneur hopes for and strives towards. While it can be hard to grow a startup into a successful business, it’s not an impossible task. As long as you don’t allow yourself to be discouraged and apply all the necessary strategies, you’ll be impressed with your growth rate.