08 Feb 2023
Research shows that 90% of startups fail. 10% do so in their first year alone. This discouraging percentage is even more so in the developing Nigerian economy where startups face severe challenges ranging from access to funding and the high cost of doing business to unfavorable government policies. And although the Nigerian government moved one step in the right direction in creating a conducive environment for startups through The Nigerian Startup Bill (NSB). which was signed into law on October 19th, 2022, it still has a long way to go before it is fully implemented. However, this law recognizes that startups are among the prime drivers of growth and development.
Year after year, Nigerian startups attempt to launch and sustain a business with very lean budgets due to limited access to funding or other reasons. This increases the rate of failure as the startups are usually still in the ideation stage. However, it is possible to build and sustain a successful startup, and here are some strategic steps that can make a huge difference.
1. Consider a remote or hybrid workplace
One of the best pieces of advice for a startup is to minimize operating costs. A very effective way to do so is by reducing or eliminating the cost of managing an office. One of the best ways to reduce your operating expenses is to reduce or eliminate office costs. Completely forgoing a physical office space can cut multiple costs simultaneously. These include utility expenses, an office lease, costs of office supplies, cleaning fees, and more.
However, a remote workplace comes with some disadvantages like disabling collaboration and teamwork among workers and departments. If this is not a viable option, consider a hybrid workplace. Asides from reducing operational costs, a hybrid workplace can increase productivity and efficiency, and increase employee work-life balance.
2. Put your customers first
Customers are the primary fuel behind businesses. Without them, a business cannot survive long enough to leave the startup phase. Consequently, building a good relationship and constantly improving their experience will lead to long-term customer retention. Ask questions, listen, and integrate feedback from customers into your products and services.
By personalizing the customer experience and giving them what they want, in terms of product performance and services, you can build a successful business with repeat buyers and brand ambassadors. Customers who have a positive experience spend more, stay longer, and tell more people about their experience. This leads to building loyalty, referrals, and repeat purchases.
3. Hire the best employees
According to the Founder, Chairman, and co-CEO of Salesforce, Marc Bennioff, acquiring the right talent is the most important key to growth. Acquiring and managing labour is a very essential part of every business and for a startup, it is quite daunting. Although it is tempting to hire people based on experience, remember that experience comes with a cost. Instead of hiring experienced and expensive people, consider hiring based on talent.
Skillful people with minimal experience are worth hiring as they come at lower costs. Also, consider hiring employees that are very flexible. In the long run, such employees will be able to take on more roles across different departments.
Automation is the future of work operation ad it is predicted to displace about 20 million manufacturing jobs all over the world by 2030. For a startup, embracing automation will not only help to manage inventory with better speed and accuracy but also offer the chance to maximize resources without sacrificing quality. By automating repetitive tasks, you can free up employees to focus on other activities. Moreover, automated systems can often perform tasks more accurately and consistently than human workers.
And although the most effective automation technology is often expensive, there are free and cheaper options that can be startups can incorporate into their work. Overall, investing in automation will increase productivity and reduce operating costs in the long run.
5. Stay focused and keep evolving
Establishing a startup does not equate to immediate profits. In fact, it takes a long time for most startups to start taking in money. Hence, don’t be discouraged by low profits. Instead, stay focused on achieving your short-term goals.
However, if the startup is not churning out a profit after a substantial period of time, it's worth looking into if there are issues with the product or service if the market still exists, and other possible issues that might slow or halt a business's growth. Perhaps, it’s time for your strategies to evolve. Review and evolve your business strategies to address any issues that may cause your startup to fail.
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