Why pandemic should not stop launch of your startup

According to the latest data provided by the United States Bureau of Labour Statistics, 20 percent of startups close shop during the first two years of operation, with 50 percent of them collapsing within five years.

These grim statistics have been compounded by the break our of the pandemic that has made running a business let a lone a startup a tough call.

However, despite these hard times, experts say entrepreneurs should not stop dreaming and setting up businesses.

So how do you successfully launch and run your startup in a period of business uncertainty and economic contraction occasioned by the Covid-19 pandemic?

While some businesses have managed to withstand the financial ravages in 2020, it is projected that 2021 will be a defining year for enterprises established in 2019 onwards.

Prateek Suri, a 31-year-old investor in the smart television market who founded his company six years ago, growing to claim a substantial market share from the likes of Samsung and LG, advises those who invested during the pandemic to identify measurable goals and doing proper research first.

“For some startups, it has been a baptism of fire because investing during a global crisis needs more tenacity and deep market analysis because consumers change their preferences when their pockets are threatened by fear of the unknown,” he told Enterprise.

However, he encourages people to shed off the fear of investing in 2021 or starting a business, and gather the courage to go through the torrid business environment.

“The biggest mistake you can make is to be afraid of failure because of a pandemic. Failure is key to your success, it helps you learn to break the glass ceiling. Ninety percent of life is about how you react after failure. Every step of failure is a great lesson towards success,” remarks Mr Suri, who is the founder and chief executive of Maser.

According to Alice Anangi, founder and CEO of Zeden Technologies, startups founders must never be afraid of failure and losses, since they are the greatest assets when navigating the start-up scene,” she says.

“They only make you better and more resilient. Some of these ups and downs are there to test your grit in the business world and will set a very strong foundation for you to do things better the next time.”

Many people enter the business world without a proper plan of what they are going to do, what product/service they are going to provide, what challenge will the product/service be solving, the go to market strategy and the competition available. If you do this, experts say, you are essentially planning for the failure of your business. Have a sense of direction and navigate through it as your client requirements or business expectations change.

“Do not try to do everything yourself. Most startup owners make a huge mistake of thinking they are all alone and decide to manage their business entirely by themselves. Surround yourself with mentors and experts in different areas that will help streamline and propel your business forward. Find advisors, wise counsel, seasoned entrepreneurs and successful mentors and discuss your goals, challenges, strategies, progress and ideas. You will be surprised at how many mistakes such advisors will help you avoid in the long run,” Ms Anangi says.

“A major mistake that new entrepreneurs make is to overstretch themselves in pursuit for revenue or huge turn overs. Be careful with this because it may end up giving your clients a negative experience especially when you under deliver. It is better to take on a project much later because you are overwhelmed than to take up on one and fail to deliver as promised.”

Not integrating technology in your business is another pitfall to avoid, especially during these pandemic times.

“Right now we are in the digital error and it is paramount for businesses to have an online presence in order to capture an audience. Technology integration can be as simple as having active social media accounts that your clients can engage in or it can be as complex as having an ERP system manage your day to day business processes for visibility and efficiency. It all depends on the product/service being delivered and the overall business plan.”

According to Deacon Hayes, financial expert and founder of Well Kept Wallet, a financial coaching company, startups begin to fail the moment they launch without a basic plan.

“A startup should map out a business plan, even if it is just one page. It should include how much it costs to operate, how much they anticipate selling, who would buy their product and why,” he says.

Savio Wambugu, founder and CEO of Mt Kenya Hub warns startups against developing and rolling out a solution before taking time to properly design it.

“The recommendation is to have and end-to-end understanding of your solution. Make sure you subject your innovation to different business models and learn which ones work best for you.”

Mr Wambugu notes that innovation is a dynamic field where innovators must adapt to changes in an ecosystem or a crisis.

“The pandemic has taught us that when the environment changes, you must fast customise your business model to fit the current wave of revolution,” she says

Mr Suri cautions entrepreneurs against starting a business without taking time to understand the market, as “there's no way to know if you're on the right track unless you're constantly getting feedback from current or prospective customers.

“It's important to recognize the size of your market, how your customer preferences are expected to change and what your competitors are doing. Building a great and unique product is okay but there is no guarantee it will turn into a successful business,” he states.

“Many businesses find themselves focusing on a market that's simply too small to build a big business in.”

He adds that some businesses fail to follow the legal channels in registering their businesses which later bring them problems with the law, and may end up shutting altogether.

Also, failing to pick the right brand entity or protect your intellectual property can lead you to serious financial ramifications.

Krish Subramanian, co-founder and chief executive officer of Chargebee warns against partnering with the wrong people when starting a business.

“A company's first set of investors will make or break it. These individuals place their confidence in the business's potential without having a proof of concept presented to them. Once businesses have undergone their seed funding, then they'll interact with investors who look at the business's growth and sustainability,” he says.