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To succeed, start small
Q: I’m from Pakistan, where venture capital funding is not yet readily available. How can entrepreneurs here ensure cash flow in a startup’s early days and pay salaries to employees? What are the top three building blocks needed for entrepreneurs to transform a startup into a sustainable organisation?
After seeing so many tech startups rocket to billion-dollar buyouts so quickly in the past few years, some new entrepreneurs might mistakenly think that starting a business is an explosive sprint that ends quickly. In reality, it’s an endurance race that only a few survive: According to Bloomberg, 8 out of 10 companies fail within 18 months of opening for business.
There is no hard and fast rule that distinguishes the two businesses in 10 that survive from those that fail: Business-threatening challenges can pop up at any moment, no matter what you do. However, one of the best ways to protect your enterprise is to make choices with the long term in mind.
Here are some tips on three areas where your decisions will make a difference for years to come.
1. Choose your clients carefully
When you’re launching your startup, it may sometimes be tempting to take orders or make deals that you can’t afford to fulfill in hopes of gaining clients. This is almost always a mistake. If your business grows too fast, you’ll likely end up producing an inferior product or service and disappointing those customers; and if you’re unlucky, the entire enterprise will then fall flat.