Startups have a high rate of failure. Even the most successful startups will face challenges, and it’s your ability to cope with setbacks that will play a large part in determining your potential for success. It’s very easy to get into trouble as a business owner, and those troubles can come out of nowhere and have a heavy impact. It’s tough to stay positive when calamity strikes, but making the right business decisions at the right time can transform the long and short-term effects. No matter what has caused your startup to hit a roadblock, here are some of the best recovery tips that might just get you back on track and one step closer to that elusive success.
Understand Profits
If you sell a single product or have an entire catalog, you need every single item that you sell to provide you with a profit. This is more than simply making sure that your prices are higher than the costs of the product, You also need to take into account your shipping costs, manufacturing, staff wage bills, and operating costs. The price that you set for your products will need to cover all of those expenses and more. Go through every cost that your startup has and make sure that you are pricing your products accordingly. If you have competition that can sell at lower prices, evaluate why they can do so and make changes to the way your startup spends.
Use Your Data
Startup entrepreneurs have a resource that every business owner would have prayed for even ten years ago: data. If your startup has hit a roadblock then it’s time to start developing a more thorough understanding of how your analytics and data can be used to salvage the work that you have put in. Many startup entrepreneurs like to rely on buzzwords and gut instinct, but this is not only outdated, it is ineffective and dangerous. Using methodologies such as 6Sigma (developed by expert Peter Peterka) can make it easier to recover from potential dangers by making sure that you “…improve business processes by utilizing statistical analysis rather than guesswork.” If your startup is failing to have the impact that you planned for, then a thorough analysis of real data can help you to identify what is going wrong with your business processes and ensure improvements in the future.
Cutting Costs
If your startup is failing due to a lack of finances, then you’re not alone. Money mismanagement is one of the main reasons for startup failure. That makes it a critical subject to address, even before failure starts to become a threat. You should have a strong understanding of your running costs so that you make it easier to identify just where to cut those costs. Look at the costs of your startup promises to start with. There are many alternatives to traditional office space, and those city center offices may add credibility to your startup brand but they take their toll on your bottom line. Consider every expense that comes out of your startup’s bank account and look for ways to trim those costs without damaging effectiveness and flexibility.
If your startup is struggling to stay afloat then you will need to prioritize your recovery strategy. Take the time to understand why failure is looming and you will have a much better chance of making the right changes. With hard work and the right level of focus, recovering from setbacks is more than achievable, and could be all that stands between you and startup success.
