Today, family businesses are turning their weaknesses to their strengths and are quickly transitioning to professional companies. That’s why, experts believe that the 21st century belongs to family-owned businesses. If you want to follow their footsteps and transform your family business to a professional one, here are four best practices that can help you succeed.
Five Survival Strategies for Startups
Statistics sometimes are initimidating, but here's one that startups need to hear - 90% of all startups fail within the first year. Their success rate is abysmal and that makes them a risky—yet strangely alluring—proposition. Clearly, as a startup, you’ll need all the help you can get.
Despite its low success rate, funding in tech startups in Malaysia increased 96% between 2011 and 2014 to $1.5 billion. The Malaysian government’s MaGIC (Malaysian Global Innovation and Creativity Centre) initiative should take some credit as it is providing a platform for growth, innovation, and entry into new markets for startups.
But before you get onto that platform, you are on your own. Your survival depends largely on how badly you want to make it. Here are five solid survival strategies that will help you beat the odds and stay afloat.
Slow and Steady Wins the Race
Growth is great. It expands your horizons and takes your startup places, literally. However, one of the biggest mistakes startups make is spreading their wings too fast.
In a Harvard Business Review article titled ‘Are You Growing Too Fast?’, Georgetown University Professor Sandeep Dahiya wrote: “Rapid growth frequently puts margins under pressure as the company tries to keep customers happy with such services as faster fulfillment and generous payment terms.”
Another disadvantage of growing too fast is that it can empty your coffers, forcing you to cut down on marketing and advertising expenses, and lower the quality of your products and services.
You would end up with customer expectations that you can no longer meet, resulting in unhappy customers, social media backlash and, as a result, create an image of a company that’s out of control.
That’s a trap many startups fall into. In order to survive, startups need to slow down and give their teams an opportunity to review their growth strategies and find innovative, more efficient, and profitable ways of scaling its business.
“Slowing growth can absolutely set the table for superior growth down the road. Like a racecar pulling into the pit for a new set of tires, the ability to retool for the future ought to be in every startup’s repertoire,” writes Alexander Selegenev, Executive Director at TMT Investments, a venture capital firm, in a column for Tech.co. That’s sound advice.
Spend Wisely and Track Your Finances
When you are on a success high, it’s easy to lose track of finances. Neglecting your books is the gravest mistake you can make as a startup.
You need to keep tabs on inventory, client information, finances, and cash flow. And to get all of this organized, you can rely on technology! There are apps that help you track your finances and send alerts to your accounts team on a regular basis.
While keeping track of your finances is critical, it’s more important to spend wisely. As a startup, money is never really enough. But most startups don’t realize this and tend to spend—rather over-spend—on hiring too many employees, buying products and services that aren’t necessary, and overstocking inventory. Picking ‘nice-to-have’ over ‘need-to-have’ can have long-lasting repercussions.
Step On Your Competition’s Toes
When SideCar entered the taxi aggregator scene, Uber was already ruling. SideCar didn’t flinch. It created its own niche and was gradually gaining ground. But it severely underestimated the competition. It forgot that Uber was a company that had raised more capital than any other company in history and that it’s so cash-heavy that it can outweigh anyone. SideCar couldn’t compete and was eventually bought over by GM.
The biggest threat to the survival of any business is competition. There’s nothing more important than reading your competition, predicting their moves, and creating a product or service that stands out.
Easier said than done. You need to really get into the mind of your competitors right from the start. Mark your competition and understand why you consider them your competition. It’s important to learn how they market their services, their pricing model, and what makes them unique.
What’s more important is to find out what customers hate about your competition and make that a competitive differentiator. Make their weakness your strength and make your strengths stronger.
They say a picture is worth a thousand words. But today, numbers say it all.
As a startup, you’ve got to have those numbers at your fingertips. Big data analytics can help you stay on top of everything you need to know. From gauging consumer behavior, to marketing, and from inventory management to advertising, analytics can read between the numbers.
It can help you reach the right target market and help you get better return on investment from your marketing expenditure.
Apart from these, it’s also important for startups to track important KPIs that are crucial to your business. These KPIs include cash flow forecasts that help you assess if your sales and margins are healthy. Another important metric to track is the funnel drop off rate. This measures the number of visitors who exit a conversion process without buying a product.
Also known as cart abandonment rate in the e-commerce world, tracking this provides companies with an insight into why customers aren’t buying a product and how they can improve the process to ensure a sale
Keep Your Customers Close, Really Close
It’s a buyer’s market. You have no buyers, you have no market. Considering only a handful of startups live to see success, it’s imperative for them to ensure they keep their customers happy.
According to a global study by Kapow, 68% of customers say they leave because of poor customer service. Aaron Aguis, a Search, Content and Social Marketer wrote in Entrepreneur.com that the best startups use customer onboarding tactics that streamline the experience and impress consumers with their ease and usability.
Another way to gauge customer satisfaction is your traditional customer satisfaction survey--they never go out of fashion. It is the best tool to be informed of what your customers really think of you and how you can improve your services. This is really important, which in turn increases customer retention rate. Research by Harvard Business Review found that businesses don’t increase customer loyalty by delighting them—but by finding ways to streamline customer experience. That counts because that creates an impact on the survival of your business.
As a startup, you are part of the lucky 10% that survived, and that’s a statistic that could sound less daunting and more promising if you adopt these strategies not just to survive but thrive
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Where was Senheng’s first retail outlet? How have you grown since then? Senheng Pandan Jaya was our first Senheng store that was established back in 1989. Today, we have more than 100 stores nationwide.
Can you provide us a brief introduction to Bata? Bata was founded in Zlín, Czech Republic in 1894 and brought into the Malaysian market in 1935.