Why Start-Ups Need Innovative Tech to Survive
Each year 1 in 5 new businesses fail. Increasing competition from larger, more established organisations, a fickle consumer market and cash problems are just some of the reasons why start-ups fail, particularly in their first year.
There is one thing that can make this tumultuous time smoother though: Technology.
Start-ups need to invest in the newest technology to stand a chance in the cut-throat competitive start-up world.
Why life is tough for start-ups: The 3 biggest problems start-ups face
Start-ups have it tough. Not only do 1 in 5 fail in their first year, but 60% fail within their first three years. With around 660,000 new businesses registered each year, why is life so hard for start-ups?
Start-up problem #1: Cash flow
“The speed that money is coming in versus how quickly it’s going out – is exceptionally tricky to get right.” – DC incubator
Cash flow problems are common with new-born businesses. Unless they have a bottomless pot of money to cover unexpected issues, late payers, unforeseen costs, sudden market fluctuations and changing marketing strategies, start-ups can run out of funds quickly.
Start-up problem #2: Ineffective marketing
A tree falls over in a forest. If no one sees it fall, did it make a sound? This quantum question can be applied to the marketing of new products or services. If no one sees the new product or service, does it exist? In short, no.
Creating a buzz around a new product or service is essential to its success or failure. But, because there is so much noise and so many different channels to choose from, getting the marketing strategy right is tricky, not to mention expensive. That’s why over 22% of start-ups fail within three years.
Start-up problem #3: Lack of productivity
“Low productivity in the workplace refers to a condition where one or more workers complete tasks, processes, production or sales inefficiently.” – Bizfluent
This one doesn’t only apply to start-ups. A lack of workforce productivity can harm even the most seasoned establishments. But, where a big, established company can probably weather the effects of low productivity (for a short time anyway), a start-up can rarely afford to. A lack of productivity can hugely affect the profitability of a company. The people and equipment needed to produce a product or service cost money. So, if these people or equipment don’t produce much for the money that they’ve cost, it’s harmful to the bottom-line.
How tech can help start-ups navigate their first year and beyond
The internet and increased smartphone usage have completely altered the way we live, work and play. For instance, 20 years ago, who knew that companies would be using a social media platform like Facebook to sell products and interact with customers?
From artificial intelligence and the ‘internet of things’ to 3D printing and remote working, innovative technology is advancing at a rapid rate. And it dictates so much: From how businesses operate and how employees engage with customers to how consumers hear about and purchase products and services.
If a new company isn’t up to speed on the latest tech developments, they’re at risk of falling behind the pack.
“The last thing you want is to get trampled by time, letting yourself become outdated and obsolete. Tech is constantly changing the landscape of any and every business, and you need to keep up.” – Find Nerd
Using technology to improve cash flow
As we’ve discovered a lack of cash flow can harm a struggling start-up and stop it from growing and developing past its first three years. New companies need to be smart with their pennies and find funding opportunities that work for them and cut costs where they can.
For example, if they integrated technologies such as live chat or a connected CRM, they could provide their customers with exceptional customer service, without having to invest in a full customer service team. The customer service that this type of technology offers companies will keep existing customers coming back and attract new customers, which will increase sales and profits exponentially.
While R&D grants are notoriously difficult to win (due to the number of people that apply for them), R&D tax credits are much easier to secure and can bring a much-needed cash injection into the business. Companies can claim up to 33% of the costs associated with the design, build and development of new, innovative products, services or even processes. But it can be difficult for newbies to know where to start when making a claim and to make sure that they’re getting the maximum amount of tax relief possible.
They could invest in a team of R&D tax specialists, like Myriad Associates, who, with a 100% success rate and over a decade’s worth of experience filing R&D claims, can guarantee to submit a claim and secure as much R&D tax relief as possible. But it’s a hefty cost that a start-up might not be able to afford.
Or, they could sign up to use an online R&D tax claim portal, like Tax Cloud. Tax Cloud is a self-service R&D tax claim portal that allows businesses to submit R&D claims by guiding them through a set of simple steps. The portal is supported by the R&D tax experts at Myriad Associates, who check the claim before it goes to HMRC to a) make sure it’s error-free and, therefore, gets processed quickly, and b) make sure they are getting the maximum amount of tax relief possible. And, the best bit is, it’s a fraction of the cost of hiring a full team of R&D tax specialists.
Using tech to improve marketing strategies
It’s no secret that customers are getting smarter, savvier and more fickle by the day. And that’s thanks to technology. For example, customers use social media to find new products, they use the internet to find reviews and they prefer to use self-service technology such as chatbots to find answers to questions.
So, for a start-up, it’s worth doing some market research and establishing which digital channels their target market uses and formulating their marketing strategy around them.
For instance, if customers use Twitter regularly, is there much point in paying for expensive TV ad slots? Start-ups should find effective ways to engage with their audience via the digital platforms they use the most.
“Customers love and are up to speed with technology and you need to be on the same wavelength to interact and connect with them.” – Grab Cad Blog
Online reviews play a huge part in a customer’s purchase decision: Nearly 89% of customers will make a conscious effort to find and read online reviews before they’ll even consider buying a product or service. So, instead of spending time and money on expensive advertising campaigns, why not focus on generating and displaying customer reviews.
And in the ‘on-demand’ world that we live in today, where customers want answers to questions and they want them now, why not use instant messaging apps to communicate?
Technology provides start-ups with endless opportunities for direct and engaging communication with customers. And it doesn’t need to cost an arm-and-a-leg either. It just requires research, a bit of clever, creative thinking and constant evaluation to see what’s working.
Using technology to increase productivity
Poor productivity can be brought on by either hiring bad people, or inefficient work processes.
But there are tech solutions that they can employ to help with an unproductive workforce or inefficient processes. For instance, easy and open communication is vital for keeping a workforce moving in the right direction. Using instant messaging platforms like Slack or Microsoft Teams makes it easy for a team to communicate, but without the distraction of an intrusive phone call or desk drop-in.
Installing business process management software can help automate and streamline tasks, improve transparency and keep people working on the right jobs at the right time. In fact, research shows that investment in this type of tech can increase productivity by 20%.
“Technology allows us to do our jobs faster and better, while using fewer resources. Regular tasks will be done faster thanks to better machines, tedious grunt work can be delegated onto software, better equipment means more done in less time.” - Find Nerd
“Getting people better tools for the job means better results, in less time.” - Find Nerd
Technology is a must for start-ups if they want to improve their cash flow, marketing and productivity levels.