Ten Pro Startup Success Tips for Your Business - Volume 1
Today, one is seeing the mushrooming of a lot of startups around the world, and more so, in a fast-growing economy like India. A startup is a young company usually financed and operated by a handful of individuals or one individual. Startups offer a product or service that is unique and not currently being offered elsewhere in the market!
A startup is primarily designed in such a way that it scales up rather quickly, and this is what differentiates it from small businesses. As startups do not have a trail or any history to back them up, and they start from a scratch; investing in them is considered a significant risk. A startup works towards finding a solution to a problem which may not necessarily be obvious. And, success is not guaranteed in a startup! So, let’s find out those tips that can ensure the success of a startup.
01. Laying the startup roadmap
Doing everything right in the beginning itself is half the battle won for a startup! A carefully crafted layout of the critical path for a business can help go beyond a plan. This will ensure that one will not unnecessarily get diverted or distracted. One must also bear in mind that they must seek funding at the right time and for the right reasons only. Certainly, the success of the business is essential and sacrificing so much is worth it. Let’s take a look at the steps that one needs to consider when creating a roadmap to startup success:
• Problem identification in a proven market.
• Niche building and shouting over the rooftop.
• Right people for the right job.
• Creating a vision, mission, and strategy.
• Building the best product or service.
02. Adhering to legal requirements and founders agreement
Once the roadmap and vision are in place; to begin with, one needs to be crystal clear about the nature and type of the business they are starting. Whenever a business is started, it has its own set of legal requirements and regulations. Therefore, it is essential for any startup to pay special attention to it before incorporating their business. Founders, by incorporating their business as a specific business type (as seen below) can ensure its overall vision and goals:
• Sole proprietorship,
• Private limited,
• Public limited,
• Limited liability partnership, etc.
03. Applying and holding the right business license
One should know very well that licenses form an integral part of running any business. A business license is a legal document that allows a business to operate. On the other hand business registration is an official process for listing a business. The nature and size of a business to be started to form the basis of the license and obtaining it is always the best way to start a business. As the saying goes, “Prevention is always better than cure,” to avoid costly lawsuits or unwanted legal battles in the future, one should always ensure to hold the relevant license when starting their startup.
04. Putting the right team in place
It’s a well-known fact that teams have always been an essential ingredient for building successful businesses. But, creating great teams does not happen just like that - it takes planning and ongoing effort. The vision of any startup is entirely that of an individual or a bunch of them. However, if one has to achieve the ultimate goals for their business, the first step is to be surrounded by like-minded people or those who understand the vision. Moving forward, this ensures that they do fit well with the culture and mindset of the company. Steps, as seen below, can help to build effective teams:
• Recognizing the power of teamwork.
• Employing the right people.
• Delegating authority.
• Monitoring employee progress.
• Celebrating success in accomplishing or exceeding goals.
05. Managing cash inflow and tracking expenses
The most common reason why most startups fail is due to running out of money. Keeping the track of revenues and expenses helps to keep the business operations under control. An idea might be excellent, but if not staying on top of cash flows, it will put a business in a very dangerous situation. Budgeting and strictly sticking to it will definitely help. Despite knowing that cash is the fuel that keeps the engine running, it’s observed that most businesses don’t really handle their cash flow properly. Some tips that could help a startup on the path to growth:
• Prioritizing spend control.
• Reserving for a rainy day.
• Following with customers for timely payment.
• Turning down projects where the cost involved to deliver is high.
• Employing capable and skilled people will save time and money.
With a newly started business – a startup, there are bound to be expensed in every direction. For a startup that usually has a low financial budget, hiring a full-time staffer may prove budget-friendly. In that case, opting to use accounting software to remain organized wouldn’t be a bad idea. This would even make it much easier after the financial year-ending to create an income statement or when filing income tax returns. Once business picks up and grows, and as accounting becomes complex, one can then consider hiring a professional.
06. Limiting fixed expenses initially and being thoroughly honest
The key to longevity for a startup is to keep its expenses low – at least in the beginning stages. It was highly advisable and recommended to avoid a large elaborate fancy office or over-the-top amenities in the heart of the city. Operating this way can help to allocate the majority of the capital to grow. Keeping that in mind, generating revenue should be the priority.
Honesty applies not only for startups but for any business that is being set up. Laying the foundation of honesty with strong integrity sets the culture, direction, and priority for any startup. And this needs to start right with the founder who is the leader of the young startup! Values and principles established in the beginning will stand the tests of time.
07. Being optimistic and preparing for the worst
It’s always better to be prepared for the worst possible situation. It’s also advisable to not quit a job or eliminate the main source of income until the startup takes off, and is ready to replace one’s steady income. Also, it is not a bad idea to suggest in keeping financial reserves - personal as well as business – just in case at the emergence of an emergency! As an entrepreneur, one is solely responsible for their old age, and along with it their retirement. Consider micro-investing opportunities or allocating funds on a monthly basis as another option to ward off an unwanted scenario.
08. Valuing time in terms of monetary value
It’s often said that business valuation is more art than science. In that case, the practice of valuing a startup would entirely lie in the domain of an artist. Startups take time to become profitable. Therefore, the trick is to value time to focus on the future. And, the mantra - “time is money”, is the one that should always be strictly kept in mind, especially for a startup. Every moment that one spends doing something unrelated to their business is actually the time they waste. Time is of prime importance and taking that into consideration one needs to plan their schedules and day-to-day activities.
09. Focusing on acquiring and retaining customers
A business cannot run without customers, can it? For a startup, figuring out the way to acquire customers and then scale, will increase the chances of making it big. After identifying the various customer acquisition channels, one needs to work on optimizing to lower their costs. Most often one sees startups going on a huge spending spree in their bid to acquire customers. This shows that they are more focused on market share rather than sound business metrics. It must be borne in mind that customer retention is equally of prime importance – it helps to keep going in the long run.
10. Paying self without ignoring
One has put a business in place mainly to make a profit! Making money is always expected as one needs to make a living. However, one’s hard work, and dedication isn’t enough for them to make a life for themselves - they need to pay for themselves. One needs to live – by identifying one’s monthly and yearly expenses counting at first the bare essentials, one can arrive at a figure. Though one needn’t compensate themselves initially with a big fat salary, they must, however, ensure to pay themselves enough to live!
The startup world is all about learning from mistakes! Before one venture into the world of startups, one has the option of differentiating the companies that are successful from those that are lost out! Spotting these lessons can help one from making those blunders themselves! Further, the tips discussed above can help one to guard against setbacks. Stay tuned for the upcoming volume, “Ten Pro Startup Success Tips for Your Business - Volume 2”. This upcoming post shall list some more success tips for the startups.