3 ‘Rites of Passage’ for Any Successful Startup

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So you’ve started a new business. This is a great achievement in itself, but it’s important to remember that, in the US alone, there are nearly 5.5 million new businesses started each year. The hard truth is that not all of these startups are successful, and according to recent studies, 10% of those startups fail within the first twelve months.

To become a truly successful startup, then, you need to prove your staging power, developing a clear value proposition, understanding your target market, and hitting the key milestones as quickly as possible. There are three key ‘rites of passage’ that will confirm you’ve done this. We’re going to look into these milestones now, helping you to get a clear idea of what needs to be done to avoid falling into that 10%.

Making Your First Hire

The first rite of passage is hiring your first team member who isn’t a founder. Essentially, this marks the transition from a passion project to a real company, and forces you to define your culture, delegate responsibility, and start building a business structure that can scale. But remember, this isn’t just about adding a body.

One of the big mistakes startup companies make is hiring too quickly or hiring the wrong person out of urgency, trying to climb onto the business stage quickly and confirm their reputation in the market – having team members, of course, carries a certain legitimacy that can make your company appear more established.

But if you don’t take the time to carefully select the right person, or bring in someone who believes in your mission and can contribute to it meaningfully, you’ll likely end up with someone who isn’t a good fit for the role, and therefore fail to make the impact they need to make.

Surviving Your First Crisis

You have no idea how strong your business really is until it’s tested. Whether it’s a failed launch, a financial shortfall, or a legal dispute, every startup will eventually hit a wall, and the rite of passage here is navigating that wall effectively and coming out on the other side even stronger than you were before. The key to doing this is insurance.

We mentioned previously that 10% of startups in the US fail, and while this is certainly a worrying statistic, it’s also important to note that 40% of small businesses don’t have insurance, and 75% are underinsured. With this in mind, insurance alone can easily be the difference between success and failure, giving startups the financial safety net they need to weather a storm without having to shut down completely.

As a newcomer in the business landscape, you need to make sure you have everything from commercial business insurance to general liability insurance. If you have that in your backpocket, whenever the first crisis hits, you know you’ll have the support you need to move forward and be protected from a variety of potential setbacks.

Attaining Your First Customer

The final rite of passage is perhaps quite an obvious one: attaining your first customer! At the beginning, it’s likely you’ll have friends and family lending their support and making a few purchases, but the real milestone comes when you make a sale to a customer who isn’t personally connected to you.

With this in mind, you might be wondering why the heading here isn’t ‘making your first sale’, and the reason for that is – you’ll have to forgive us – we’re being a little symbolic. It’s all well and good to make a sale, of course, but this is about attaining a customer – in other words, gaining a relationship with someone who believes in your business and is willing to invest in it.

This is the kind of customer who will inevitably come back for more, and prove to be the foundation of your customer base moving forward. Their customer feedback, loyalty, and experience will end up shaping your brand’s reputation, so this is a huge rite of passage in declaring yourself a legitimate, successful startup with a truly bright future!