If you are worried that your company's profits are decreasing more and more and you have losses, you must find out what is causing this situation to solve it.
Strategic planning, for example, is one of the tools that can help you anticipate these losses and respond effectively to achieve business survival and profitability.
So, if you're not currently making enough money from your business, here are 21 tips from successful entrepreneurs for startups. Take them into account and work to reverse your situation today!
21 tips from successful entrepreneurs for startups
1. “Your sales cycles need to be as short as possible.” - Mario Ornelas, CEO of Zonetap.
As a startup, this may be very hard to do. Don't let six months of losses knock you out. Look to the next few months as a chance to show your stakeholders what you've learned and take it as an opportunity to sharpen your sales and marketing programs.
2. "Reevaluate your thesis.” - Lewis Lee, CEO of Aon.
Reevaluate your original thesis against what you know now.
3. “Keep experimenting and adjusting.” - Ilana Golan, CEO of Golan Ventures Inc.
Focus on the leanest experiments you can run and be honest about where you have a "leaky bucket" vs. where your most significant ROI is. Scaling at this stage is a lot less important. Don't be afraid to do things that don't scale.
4. “What is the core of why you make money?” - Derric Haynie, CEO of EcommerceTech.
Not what products you sell, but what makes you stand out. Is it your manufacturing process? Your tech smarts? Your network and clout? Leverage that, focus on that, possibly into a pivot or adjustment of the business and model to get things right.
5. “Determine what's causing your losses.” - Alexander Haque, founder of Unnamed Ventures.
Is it due to churn, poor cash flow management, or wonky unit economics? My suggestion is to pinpoint the problems, and if you don't know how to fix them, you need to figure them out quickly and then work on a plan to address the core issues.
6. “Don't get caught up in the trap of growth.” - Elliot Begoun, CEO of TIG Brands.
Get back to fundamentals. Understand your unit and channel economics.
7. “Be open and transparent with your team.” - Kirk Vartan, founder of A Slice of New York.
Let everyone know what is going on, where the money is going, and what the challenges are. Invite them to be part of the solution and ask for their input. Listen to them. Don't be controlling of all the data or power.
8. “Look at your customer needs.” - Jean-Claude Junqua, CEO of CE2Innovate.
Stare at the big picture to see what is still working and what might need changing. Be creative to make sure that you have access to cash.
9. “Don't give up.” - David Baird, founder of Gigmor.
Don't let it demoralize you. Most startups take time to get off the ground, much less become profitable.
10. “Have trusted advisors.” - Elyssa Katz, founder of The Zutor Concierge.
It’s always helpful to have trusted advisors to turn to when I need help and have questions. If you can establish who that person or people are, they may have ideas to turn the business around.
11. “Don't panic.” - Harpreet Singh, co-founder of Launchable.
You're trying to find a suitable business motion in the early days, which can be part of that process. The next step is figuring out whether this is a product or a go-to-market issue. Design experiments to give you quick answers within each domain to identify the problem and help solve it.
12. “Have a long-term vision.” - Suresh Madhuvarsu, founder of Product10x Accelerator.
Having a long-term vision and commitment towards a business is the only way to look beyond short-term pain. Always think about what's core to your company and add-ons. Never let go of your core or often termed as the secret sauce.
13. “Have capital.” - Mark Samuel, founder of IWON Organics.
If you're raising capital, do it much sooner than needed. And the amount you think you need, it's probably five times that.
14. “Create a culture of co-leaders.” - Tullio Siragusa, CSO of Encora México.
In a command and control (top-down) culture, you will have difficulty getting people to work harder when the economy favors your business. It's best to set yourself up for success by creating a culture of co-leaders. Imagine an organization where everyone runs it like it's their own business? That's when you have an unstoppable business.
15. “Use data to validate your performance.” - James Michael C., founder of HiFi Gaming Society.
Cut costs and find your core capability. Use data to validate your performance.
16. “Don't rush into any decision.” - Jon Narcisso, founder of Jon Narcisso Hat Company.
This is not a time to panic but a time to make plans. Maybe even add a trusted third party for advice as you give yourself some time to create your game plan.
17. “Review your business model.” - Aloysious Zziwa, CEO of OlyCash.
Review your cost centers and business model. Do you have to spend on brand new MacBooks for interns, or will a used Chromebook do? Also, do you make money per $1? However small? If you don't, please work on the business model above until you do.
18. “Analyze your situation.” - Nicholas Focil, founder of Febo.
If you are having economic losses, it is vital to analyze your situation. Have a contingency plan in place, and make sure you know your numbers.
19. “Employ the ‘Stop, Start, Continue’ method.” - Michael Fitzsimmons, CEO de Crosschq.
First of all, take a deep breath. This is part of the journey. Employ the “Stop, Start, Continue” method with your teams: Stop the things that are less good and which should be stopped; Start the things which aren’t currently being done but which would be good to start doing, and Continue the things that are good and should be continued. Doing these things will get you back on the “slope of enlightenment” in no time.
20. “Re-evaluate if your product is resonating with the intended customer.” - Anuj Bhalla, CEO of serviceMob, Inc.
If the losses are due to churn or non-adoption of your product and service, founders must learn from those failures quickly and determine the best way to course-correct them. It takes a lot of courage to take a hard, honest look at what isn't working. But once you determine what isn't working, every second, every minute matters to fix those problems and course-correct the company.
21. “There's always an opportunity to perfect.” - Bude Piccin, CEO of Tastermonial.
Perfect the time to pivot and reanalyze your solutions. There's always an opportunity at any given time.
To conclude, it is worth emphasizing that any company that manages loss control and applies it correctly will have fewer chances of closing.
Keep in mind that a successful business is not only based on good service, economic capital, excellent academic training, or work experience. It is also based on managing the correct strategies for sustenance, advancement, and growth.