Ten Tips For Startup Success - Volume 2
A startup usually succeeds when it is driven by a passionate entrepreneur. A focus on creating unique solutions in delivering customer delight is what is required to succeed. Focusing strongly on customers and the market is equally critical along with an understanding of the basic laws, rules, and regulations for the smooth running of the business.
Continuing from where we left in the earlier volume . . . . we discussed the startup roadmap; legal requirements; business license; putting the right team in place; financial aspects; limiting spends; preparing for worst; valuing time; acquiring and retaining customers; and considering oneself for payment. Taking into account that a startup is now in place, we now move ahead to list the further tips for its success.
1. Execution, strong belief and time management. The experience and background of a team are so critical in helping to make sound decisions. Carefully picking what to focus on and what to prioritize is the challenge a startup faces. Immaculate and smart execution of any action is what determines the success of a business. Successful startups look for opportunities. They usually think outside of the box! The first startup life can be rough and tough. With limited staff and resources, its success depends on the team's productivity and effectiveness. No gains without risks, and that holds very real for the success of any business. Successful startups have a strong belief in themselves and are prepared to take risks. With a strong faith, proper time management, and learning from mistakes and fixing them quickly will only propel any startup to a successful journey ahead.
2. Discipline, determination, and effective networking. Even if a business is placed in the best economy; it cannot succeed without discipline. By imposing strong personal standards or in other words self-discipline can lead to positive work ethics, which in turn leads to getting things done effectively and efficiently. Team members, aligning and working together, and getting to the goal is critical in any startup. Along with discipline, a strong determination is always a must for success.
Emphasizing the significance of determination and a “no-quit” stubbornness can only help in increasing the confidence in a team and lead to success – especially in times of a bumpy and scary road. Determination and persistence can lead to fulfilling the goal that a startup has set for itself.
Powerful and influential people in the business circle are a priceless lot. They can open the doors to partnerships or find new investors. And that’s another reason why networking is necessary for the success of any startup. And within a startup - an outstanding CEO who can work his or her way into any organization is an asset, and the founding team should tap and encourage such a talent leading to further networking. Harnessing the power of social media can help to connect with potential employees, partners, clients, providers, or people; and in the process, it can enable a startup to promote their product or service.
3. Adhering to taxation and accounting laws. For any business, taxes are part and parcel of it. There are a broad variety of taxes, and different businesses attract different taxes. Take the example of the recently launched ‘Startup India’ initiative by the Indian Government. To promote startups, it has introduced many exemptions and tax holidays for startups. A startup can avail income tax exemption for a period of three years as well as tax exemptions from capital gains and investments above Fair Market Value. Knowing the taxation and accounting laws beforehand can prove handy and very useful.
4. Adhering to labor laws. An integral part that forms part of any business is the adherent to labor laws. When one has established their company and have hired people to work; various laws need to be complied with, it could be with respect to:
- Minimum wages
- PF payment
- Monthly holidays
- Maternity benefits
- Sexual harassment
- Payment of bonus, etc
It’s always advisable to consult a legal advisor to assess the laws applicable to a startup. Ensuring that the startup is compliant to the required labor laws leads to confidence not only within the business but also amongst customers and investors.
5. Hiring a professional consultant. Startups often hire consultants or freelancers in addition to the full-time staff. So, it’s quite essential for a startup to formulate employee policies that cover all employment details with regards to both - fulltime as well as part-time employees. An attractive employee policy attracts good talent and goes a long way toward retaining them too. These policies can boost employee morale and increase productivity.
One has often seen, how a business may be worth billions of dollars, but not because of its product or services, but due to its marketing! A computer may be termed as an expense, but marketing will always remain an investment. So, hiring an expert who can help at marketing is a good idea. Without marketing, businesses cannot survive. Marketing consultants offer a wide range of services that can include:
- Developing marketing plans
- Establishing marketing budgets
- Hiring and training salespeople
- Developing advertising, telemarketing, direct/online marketing programs
- Expanding into newer markets or even new countries
- Building new distribution channels and profit centers
6. Ensuring to protect intellectual property. Purely defining intellectual property protection as a definition: it is a protection for inventions, literary and artistic works, symbols, names, and images created by the mind. For tech-centric businesses, intellectual property is the secret locker. Some of the most common intellectual property owned by businesses include codes, algorithms and research findings.
Under the Startup India initiative, startups can leverage the SIPP (Scheme for Startups Intellectual Property Protection). It helps to nurture and mentor innovative and emerging technologies among startups. The scheme helps to protect and commercialize the intellectual property. Facilitators enable startups by providing advisory services, assisting in patent filing and disposal of the patent application.
7. Effective contract management. A contract is a great mechanism to ensure recourse in case of non-fulfillment of the work clause. A contract ensures smooth functioning of work and so it’s useful to have the basic knowledge about various aspects of contract management.
- Startups and other small businesses too tend to hire contract staff and vendors. By having a valid contract management system in place can ensure to put right checks in place which in turn provides timely completion of the required work.
- Employee contracts form the most crucial aspect while starting a venture - Outlining and formalizing employee contracts detailing salary, the scope of work and stock options is always recommended. This clarity right at the very beginning can help reduce any risks at later stages in a startup.
- Apart from the above two types of contracts discussed; a Non-disclosure Agreement or NDA can be drafted into and used while discussing critical business information with people outside the organization. This will help avoid those ideas that might have been shared in goodwill, from being used inappropriately to the disadvantage of the startup.
8. Ability to Adapt to Changes. Adapting to new technologies is the hallmark of the best startups! Also, by adapting to changes, it can even lead to further major breakthroughs! In the initial period, startups should iterate their product or service plenty of times until they are able to find the secret to succeeding and getting it perfectly right.
As a startup is backed by a team of people, the more versatile the team, the better the chances of it succeeding. Apart from the skillset, versatility in the startup environment involves the mindset too. The flexibility and ability of a startup to change products, or change the marketing approach, or rebrand their business can prove to be a useful trait. But most importantly, recovering from blows and working together in tough times can augur well for any startup.
9. Fund-raising Skills. Businesses are often ruined if they do not have adequate capital. Cash flow is the lifeline of any business. Having sufficient capital to run their business operations often proves to be the success mantra for any startup. Funding a startup via a 'bootstrapping' method, home collateral, and friends and family loans may just not be the desirable option. Doing a road show to raise funds could prove to be tiring and even turn out to be unproductive for a business. A good way to raise money online is by using platforms like 1000 Angels - it allows the startup to raise funds from accredited investors. Angel investors are normally regarded as individual-centric investors - they invest a lot on the individual's ability to drive a business to success.
10. Finding time to relax and negotiating to offer discounts. So far, we have ventured into activities that could be termed as hectic but a must, as any entrepreneur must expect an increased workload. But equally a must, they still need to find that time to unwind, relax and rejuvenate to always be ready for the next target in mind. Without being able to do so can inevitably lead to suffering from burnout - causing more damage than good to a business!
One of life’s most important rules: if you don’t ask, you don’t get! Usually, whenever a price is quoted, a healthy proportion of that is the profit margin. At times, it’s advisable to lower that margin, by way of offering a discount to a customer. This could help in increasing the customer base of the business and help in generating better revenues in the days ahead.
The whole idea of our discussion has been to help anyone planning to start their startup venture to succeed. As observed, there are a common set of reasons why startups struggle and fail, and a consistent set of factors that help a startup succeed. A serial entrepreneur who has prior success is more likely to taste success. And the best Venture Capitalists are good at picking serial entrepreneurs! But a comprehensive research proves that a startup succeeds mainly due to a common key factor that is associated with the driving impact of the founders that result in passion and commitment.
As discussed above; commitment to stay the course, willingness to adjust, patience, persistence, and a strong focus is the necessary ingredients to succeed in any startup. If one is unsure before setting up their startup, they should consider taking expert advice or hire consultants to propel their vision and ideas into the reality that will lead them to success . . .