A key factor in helping startups grow and sustain themselves longer is allocating their business resources as part of their startup strategy. According to FasterCapital, the lifespan of a startup is only about five years. Most of them are not able to reach ten years. Based on the latest statistics Exploding Topics provided, the average failure rate for the business to withstand is 10% in the first year. Within two to five years, the statistics showed that a massive 70% of new businesses would fail. For a startup to succeed, it depends on how the leader is able to mitigate risks and arrange strategies to meet the demands of potential customers based on their pain points and needs.
Why should businesses allocate their resources?
Overall business performance and efficiency could greatly improve a startup’s chances of success when they are managed in a strategic way. Other than an increase in performance, there are other reasons why businesses should do so:
- Efficiency
- Reduce cost
- To monitor business performance
- Increase startup lifespan
- Long-term growth
In order to allocate business resources, it must be done in such a way that a company’s assets are distributed efficiently. This includes such things as time, cost, equipment, and technologies.
1. Set Goals and Prioritize Resource Allocation
Identifying goals will help in determining areas that need to be given the highest priority. Ensure the goals are reachable and realistic. Then, set which areas to focus on. Just like prioritizing daily work tasks, businesses should also give priority to resource allocation. Prioritizing helps to focus on the important ones; without it, things could fumble.
According to an expert business consultant, Joseph Hollak, he suggested using the MoSCoW method and the RICE score to classify projects and tasks and make project judgements for their value. This is especially useful for balancing multiple stakeholders or having a tight budget. If you are having a hard time putting things first, use the art of delegation. Having talented teams will help contribute to project success.
2. Make a Resource Allocation Plan
A meticulous plan breakdown could ensure all business resources are distributed accurately among different facets of a startup. The plan should include a strategic action blueprint for the implementation and management of each resource. This ensures not only a clear resource distribution but also a proactive approach to overseeing and optimizing the utilization of these resources in line with the goals of a startup.
3. Track and Monitor Progress
When the strategy is planned and set, the next step is to track and monitor business performance. Frequently monitoring and tracking business resources will help to ensure they are being used in a proper manner. We do not want any waste or leftovers that could prevent the startup company from growing further. Not only resources, businesses must ensure their teams are enough to ensure the project will run smoothly or delay may happen, leading to inefficiency.
4. Use automation and project management tools
The most effective approach to getting any job done in less time and running smoothly is by using useful tools. Automation tools will help in managing repeating, boring tasks that take a lot of time to complete. Simultaneously, project management tools will let startups provide insights into the availability and adequacy of resources. By utilizing these tools in daily business operations, it can enhance productivity, reduce workload and manage processes well.
The best thing that will happen when a startup founder manages to allocate business resources is the ability to meet customer demands using the least amount of resources. Allocating resources does not only happen once. It needs to be reviewed regularly so that business will remain running effectively. Adjustments and changes should be made according to the current situation of the business.
