How to make your startup successful in the long term

With only around half of new UK businesses surviving their first three years, it takes more than just a great idea to make your startup successful in the long term.

In this guide, company formation experts, Quality Company Formations, will explain how to help your startup thrive beyond its initial stages. Here’s what to do to position yourself for long term success.

1. Test whether your business idea works

Before investing your time, energy, and personal savings in your startup idea, it is crucial to test its viability. What might seem like a good concept on paper may not resonate with customers in the real world.

You could start by creating a Minimum Viable Product (MVP), a simplified version of your product or service, or run a pilot programme. This way, you can test your product or service on a small scale to assess demand.

You could also conduct surveys or organise a focus group to see how potential customers perceive your product.

Doing this research in the early stages will allow you to tweak your idea based on feedback. This will reduce your risk of failure and save you from wasting precious resources.

2. Create a strong business plan

A solid business plan is essential to clearly show your business’s goals and how you will achieve them. This will help you and your team stay on track, knowing you’re all aligned towards the same end goal.

This will also help you secure funding by demonstrating to investors that you have a well-researched and viable business model. Include detailed descriptions of your products or services, your sales strategy, and projected revenue and profit margins.

You can regularly revisit and update your business plan to adapt to new opportunities while sticking to your core mission.

3. Focus on customer satisfaction

Customers are any business’s highest priority, and their satisfaction is pivotal for long-term growth. Happy customers become brand advocates, leading to better online reviews and word-of-mouth referrals.

Invest time and resources into understanding your customers’ needs and expectations from the beginning to drive repeat business. Listen to and act on their feedback; your business will inevitably improve over time. You could also invest in your customer support operation to handle queries and complaints professionally.

4. Keep an eye on your cash flow

Financial mismanagement is a common reason many startups fail. So, keep a close eye on your income, outgoings, and whether your invoices get paid on time. Make sure any expenses fit within a predetermined realistic budget, and you have an emergency fund set aside for unexpected costs or downturns.

You could also consider working with an accountant or financial advisor to ensure your spending is appropriate for sustainable growth.

5. Monitor key metrics and KPIs

The saying “you can’t manage what you don’t measure” is true. Metrics are crucial to understanding your startup’s health and performance.

Key Performance Indicators (KPIs) will give you insights into what’s working and where improvements are needed. They also help prove your business’s success, so make sure you can recall them easily if you ever need to deliver an elevator pitch.

Important KPIs to monitor include:

• Customer Acquisition Cost (CAC): the total cost of acquiring a new customer, including marketing, sales, and other related expenses
• Customer Lifetime Value (CLV): how much revenue each customer brings over their lifetime
• Net Promoter Score (NPS): a measure of customer satisfaction and loyalty, i.e. how likely they are to recommend your product or service to others
• Revenue Growth Rate: the pace at which your startup grows financially
• Burn Rate: how quickly you are spending your cash reserves

6. Talk to a Mentor

An experienced, successful mentor can offer you support based on their own experiences, which can be invaluable in periods of uncertainty. They can also introduce you to a broader network when you need expertise you don’t have in-house.

Ideally, your mentor should be someone outside your circle of friends and family. They should be somebody who can offer an external perspective, so they can be direct and objective. While family members may offer well-meaning advice, they often have emotional ties that can cloud their judgment.

Final thoughts: stay committed and resilient

Building a successful startup requires strong leadership. Be prepared to overcome challenges and stay focused on your long-term vision. This is what separates successful startups from the rest.

By implementing these strategies from Quality Company Formations, you’ll be well on your way to building a business that stands the test of time. Check out their website for other helpful resources and services to grow your startup with long term success in mind.