Posted by Karin Husslage
So you’ve started your company a little while ago. Great! But what if your original plan is not working out as planned? Should you quit right away?
As a startup, it’s super important to be flexible. Usually you start before your product or service is completely finished, and you adjust things as you go. Sounds simple but where to start when you see that things are not going as planned?
Start by analyzing what you have been doing so far and see what scenario you are in.
Here I discuss 4 major game-changers:
* I am not making enough money
You put in many hours for customers but you’re not earning enough money to cover all your expenses. You might want to do this at the start to build your company’s portfolio, or to attract customers that are useful as a showcase, but don’t do this too often. Raise your price, otherwise your company will eventually go bankrupt. My advice is to just make a detailed invoice, showing exactly what you do for the price they pay, including your own staff, hiring other people, costs of materials you use in the process, et cetera. Be transparant, so your first customers understand they get a lot of value for little money. Also: tell customers immediately if you need to do a lot of extra work that was not calculated at first.
* I don’t have enough customers
This can happen if you have trouble doing cold sales and marketing for your product, or when you operate in a niche market. No problem though, because even the smallest niche products can be very useful in other areas. I know of a startup that was specialised in areodynamics for cars. They found out that a lot of companies deal with aerodynamics problems in other markets, like health care and publishers. They changed their pitch, and expanded their working field right away.
* My competitors are too strong
Sometimes it’s hard to fight against big competitors. They have far more money to spend on advertising, everybody knows their name (and not yours) and they can be harsh on new players in the market. No worries, try to be smarter. Don’t copy the competitor and do exactly the same, but look for things you can do better and focus on doing those things extremely well. Can you tell where they underachieve? Big companies have quite some disadvantages compared to smaller companies, so there are many options to do better. Analyze the supply and demand, see how their supply chain is set up. Also ask some of their customers about their complaints, or look for reviews of the companies online. Are they slow in delivering? Do they treat customers unfriendly? Do they lack in product range? Then work on those things.
* I am not sure I have the right team
This is a tough problem, because you probably hired people that now feel like part of the company. You have two options: teach your current employees new skills, or fire them and hire new people. Do you think they are capable of learning to do things differently? Then you can try the first option. Not sure about that? Be honest with yourself and them, and hire new people. You need professionals that are the best at what they do, and add value to your startup immediately. Like Steve Jobs once said: A class people hire A+ class people who will outsmart them and help build a great company, B class people hire C class people who are not a thread to them. It’s simple as that: the best thing you can do for your startup is hiring people that are better than you.
Don’t be afraid to change course. It is not a matter of failing, it is showing real entrepreneurship. What’s worse? The feeling that you should have done more. Keep going!
More on this subject:
Tony Hsieh, CEO of online apparel retailer Zappos wrote an inspiring book called Delivering Happiness, on how great customer service provided by Zappos created a multibillion dollar company in a very competitive market.