Starting your own business is among the most exciting adventures one can embark on. Selling a product or service, being your own boss, enjoying freedom and flexibility…the benefits go on and on. The Wisconsin Economic Development Corporation (WEDC) reported a 42% increase in new business launches during the pandemic — a true testament to our state’s entrepreneurial spirit.
Starting a business can also be a risky endeavor. As economies constantly fluctuate and new companies enter the market, it can become an even bigger challenge to maintain your bottom line and keep up with the competition. As the age-old saying goes, “No risk, no reward.”
Here are just a few common risks startup owners should be aware of — and how to mitigate them as much as possible to ensure business success.
Not Keeping up with innovation and consumer trends
Innovation, by definition, is the ideation or creation of something new. Companies that actively seek out innovation — whether it be in their processes, people, or products — tend to reap prosperity. Trends come and go, and consumers’ tastes and behaviors inevitably change over time. But innovation doesn’t necessarily have to involve altering your flagship product for the sake of altering it (Remember the fiasco that was New Coke?). In fact, innovation often involves expanding your offerings or adding new features and characteristics.
Additionally, paying attention to what your target audience wants is an essential way to brew up new ideas. Listen to the feedback you receive about your products or services — both positive and negative. Consumers have a powerful say in how companies of all shapes and sizes should adapt their processes. Startups and other younger companies generally have more leeway to learn from their mistakes and evolve in the right direction early on.
Not paying attention to the market
Even if your startup is one-of-a-kind, it is bound to face competition at one point or another. For example, Sprinkles Cupcakes, the world’s first-ever cupcake shop, had customers lined up around the block for hours to try the tasty treats. But when more cupcake-centric bakeries began popping up around the world, customers dispersed to try the other shops’ goods.
It is important to closely monitor market trends and continually be on the lookout for emerging competitors and other key economic factors. Getting to know your customers and understanding where, how, and why they invest in related products is an imperative factor to assess, even prior to launch.
Not effectively marketing yourself
So, you’ve officially launched your business. Congratulations! However, without a solid marketing plan in place, growing your business will be a major challenge. Some valuable ways to kickstart the conversation around your brand, foster relationships, and generate transactions include:
- Build a functional, eye-catching website that produces credibility. Especially today, if your brand does not have an online presence, you’ll be nearly impossible to find.
- Set up the appropriate social media accounts for your brand and update them with news, reviews, and relevant content to engage your target audience.
- Connect with local, regional, and/or national media to help tell your story. Public relations is a powerful marketing discipline that adds credibility and exposure for your brand by creating visibility through a variety of media, including print, podcasting, TV, radio, and more.
At Rural Mutual, we help hard working Wisconsin business owners feel protected every single day. To learn more about our business insurance coverage options, contact your local agent.