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5 Principles for Starting a New Business in 2024

4 Mins read

Launching a successful startup isn’t easy. If it were, as the saying goes, everyone would do it.

In reality, many try, but few succeed.

One analysis of startup success between 2018 – 2022 found that one-fifth of small businesses closed in the first year, 31 percent closed in the second, and nearly 38 percent closed in the third year.

Ultimately, just two-thirds of entrepreneurs who started their business journeys in 2018 were still operational by 2022.

To be sure, this cohort of entrepreneurs faced unique and extraordinary challenges as they navigated the COVID-19 pandemic and endured cultural, economic, and governmental upheaval.

Today’s entrepreneurs face different but similarly daunting challenges.

After all, who wants to go through the agony of starting a small business just to see their services offered by a bot supported by a large language model (LLM)? Or even worse, its margins devoured by increasing production costs?

There may never be a perfect time to start a new business (or take risks to grow and expand an existing company), but there are steps that leaders can take to maximize their odds of success.

Here are five leadership lessons that position entrepreneurs to thrive regardless of when they decide to launch their startup journey.

#1 Prioritize Effective Financial Management

For years, founders could count on consistent seed rounds as venture capital and private equity poured millions of dollars into startups, hoping to hit on the next big thing.

Those days are definitely gone.

Global startup investments totaled $285 billion in 2023, a 38 percent year-over-year decline.

The state of startup funding is especially dire when the impact of artificial intelligence (AI) is accounted for.

More than 25 percent of all investment dollars were allocated to companies with AI-related products, siphoning off a significant chunk of available capital.

What’s more, as the Wall Street Journal reports, “Venture capitalists say they are avoiding funding businesses that lack clear signs of revenue growth or a path to profitability.”

In response, entrepreneurs must prioritize effective financial management, implementing robust budgeting, forecasting, and cash flow management practices to ensure financial stability and drive growth.

#2 Optimize Operational Efficiency

The path to profitability is paved with operational efficiencies.

Identifying and eliminating inefficiencies can significantly reduce costs and improve productivity.

Meta, which declared a “year of efficiency” in 2023, is the poster child for this dynamic. After shedding more than 20 percent of its workforce, the company saw profits and stock price soar to record highs.

Of course, there are many dynamics at play here, and reducing headcount isn’t necessarily a golden ticket to green pastures.

To optimize operational efficiency, startups can:

  • Evaluate staffing needs and align personnel with critical objectives to balance cost-cutting with empowering employees for success
  • Inventory non-essential tools and services
  • Cut down R&D budgets to focus on the product or service’s core value proposition
  • Refine integral workflows
  • Introduce external subject-matter experts to review and audit existing operational standards.

When implemented effectively, optimizing efficiencies leads to higher accountability, higher quality, improved ROI, and even higher employee satisfaction by committed staff members who want to see actual results for their work and collaborate in teams with other performers.

#3 Apply the Latest Technology

The AI hype is high, but the benefits might be real.

Leaders looking to make the most of their efficient teams should experiment with the latest AI technologies, looking for opportunities to free up human resources to focus on strategic and creative tasks that drive innovation and growth.

Startups can’t afford to fall for false marketing promises or overhyped technology, but this technology has already proven to be a valuable resource for improving decision-making, enhancing operational efficiency, augmenting customer service, and supporting other workflows.

For example, McKinsey & Company estimates that AI will boost the financial sector’s profitability by $340 billion, a stunning total reflecting the opportunity for automation and enhanced productivity to make businesses better.

The technology’s actual implementation will necessarily vary by business, but entrepreneurs should experiment with AI and automation, capitalizing on the technology to outperform the competition.

#4 Reevaluate Sales Strategies

Successful companies start and end with sales.

However, sales tactics and best practices can quickly become outdated, and companies that fail to remain agile can quickly fall behind.

Over the past few years, many businesses achieved profitability through a mix of organic, referral, recommendations, and listings – bringing a handful of high ticket deals annually with limited need for demand generation or paid ads.

Today, they may need to reconsider their approach.

This year, entrepreneurs should evaluate their sales channels, funnels, messaging, and methodologies, ensuring they are always on the cutting edge of the most relevant tactics.

Body: #5 Focus on Customer Satisfaction

In the era of limited sales opportunities, prioritizing customer satisfaction is key to business sustainability. A satisfied customer returns and refers others, creating a virtuous growth cycle.

According to one survey, 57 percent of customers say excellent customer service is a deciding factor when determining brand loyalty. In contrast, a separate survey found that 90 percent of consumers will spend more with companies providing a streamlined customer experience.

To achieve this, take time to review your ability to offer

  • A personalized customer experience
  • High-quality customer service
  • Opportunities for feedback
  • A customer-centric culture.

Focusing on customer satisfaction is a low-cost, high-yield practice that is easy to forget when growth is the ultimate goal, but it’s critical to startup success.

Start Smart to Succeed

It’s never the perfect time to start the next breakthrough business. Today’s entrepreneurs face unique challenges that make 2024 a decidedly difficult environment.

However, each of these elements plays a critical role in building a resilient business capable of adapting and succeeding, regardless of the macro environment.

Mario Peshev is the CEO of DevriX, a global WordPress agency providing scalable, long-term technical partnerships along with marketing, and business consulting. Since 2015, DevriX has consistently ranked among the top 20 WordPress consultancies worldwide, scaling both world-known enterprise brands and high-traffic publishers with up to 1 billion monthly page views on top of WordPress. Follow him on Twitter @no_fear_inc and connect on LinkedIn.

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