Starting a business is not easy so here are my Top 10 Tips to giving it the best chance of success.
- Assume you have all the skills necessary to run a business.
It makes sense that you want to be involved in all aspects of the business however you need to face up to the fact that nobody has the necessary skills in product development, marketing, finance and business development. Focus on your strengths and leverage your network to fill in the gaps. (If you do think you can do it all, then why not write a book about your secret, it would be a sure fire winner).
- Seek constructive feedback about your business idea from friends and family
The first thing we all do when we have a world beating idea is to get feedback from friends and family, primarily because we trust them not to pinch the idea. Unfortunately this form of feedback is weighted. They don’t want to hurt your feelings and don’t want you to get hurt so they tell you what they believe you want to hear.
It’s much (much) better to get impartial but constructive feedback from a trusted outsider, they will give you honest feedback.
All feedback is great. If it’s good then fantastic, bad then you simply know where the flaws are and can fill them if needed.
- Aim for perfection before launch
We all want our pride and joy (product) to be in tip-top condition before launch but bear in mind, the longer you take to launch, the more cash and energy you burn without actually making a sale. The best tip is to launch as soon as the product is viable, you can then get customer feedback and refine it for version 2.0 (yes there will be a second version as you find from real customers what they really think)
- Give away your IP in exchange for lower salaries
Many startups think it’s a good idea to give away equity in the business in return for staff, lets face it, cashflow is generally a problem at the start so what better way than to reduce costs in exchange for a slice of the business ?
The problem with equity splitting is that your employees naturally feel they have a stake in the company (which they do) which also means they also want a say in how the company should evolve so an employer/employee relationship can quickly morph into major/minor partner battles. Not what you need at the critical time of forming the business.
You could explain the early adopter advantage of being in a startup with the potential to rise quickly as new staff are added later on.
Only pay the salary you can afford, don’t try to entice them with big salaries which you would later regret.
- Assume your idea is so good, customers will be queueing up to buy
When we have a world changing idea, it’s easy to get caught up in our own hype and assume the rest of the world will be queueing up waiting to purchase.
It’s generally not that easy. Before somebody purchases your product they need (1) to know it is there, so marketing is essential (2) to know it is of value to them, so knowledge of the product and reviews are necessary (3) to trust you as a supplier, to ensure you will be able to support the product once they buy.
Yes, there are instances where a product has hit the market and immediately takes off but there are many (many) more that take months before they start to take hold in the market.
- Hire Staff too quickly
The quicker you get staff to take some of the pressure off the better. However, staff adds cost and cost adds risk so in the early stages hire sparingly and only when you have the cash flow to support them. It is important to note however that you should be prepared to scale quickly if the product does take off, you don’t want to lose business or provide a terrible service for a product that is flying out of the shop quicker than you can make it.
- Think launch is the hardest part over
You put all your effort into getting the product launched and can sit back and let the marketing take over.
This is one of the biggest mistakes startups make. There are two modes to a business, preparation and running. Whilst you are preparing to launch you have no customers so the only thing you are burning is time and cost. Once you launch however, you are burning real money whilst supporting real customers, at the same time you are also trying to grow the business. The busiest time for a business is the transition into a live and stable running business so prepare well.
- Rely on the first big sale to survive
Cashflow is king. The elusive sale is vapour-ware until it actually lands and the sales pipeline can (especially in the early days) take a very long time. Ensure you and your family can survive until the sales start rolling in, and also survive if they don’t.
- Assume viral marketing via social media reaps rewards quickly
A few well placed tweets and a stunning facebook page will get the customers rolling in.
Viral marketing very rarely happens quickly, when it does it generally occurs as a result of months of hard graft and effort building up a momentum so if you are choosing this route, be prepared for lots of hard work and don’t rely on it as your only marketing effort.
- Put 100% of your time, effort and cash into launching a single product
This may sound like a contradiction but don’t put all your eggs in a single basket, think and plan to diversify if the product does not take off. If it does, then once you are up and running, diversify anyway to spread the risk as your business grows.