You’ve been thinking about starting your company from an idea you believe would change the world. Or perhaps you’re sure about your idea and ready to launch. Granted! You’ve heard all the basic advice on how to start, hiring talent, investors, legal jargons, and much more. Yet, sometimes it still feels like the startup train keeps stretching further with gallops along the way.
Starting a business is not an easy path. We’ve seen start-ups fail and it can be scary, especially for those yet to begin. Despite all the numbers and external factors, one of the reasons most businesses fail can be traced to ineffective business management and other reasons from within the organization.
As a founder/CEO, it’s important to get yourself grounded in the basics, yet remain hungry by stretching and reinventing yourself beyond the ordinary. From getting the right team, funding, understanding your target market, and more; it takes some deep work to create a successful business.
However, there are some very critical things that every Founder of a new startup should know before launching out.
1. Understand Your Industry and Target Audience
One of the crucial steps for startups is to ascertain their target audience and create a strategic marketing plan that gets them on their tribe. Depending on your product or service, you might need to determine the different categories of people that your product will serve and how to best meet their needs.
Some practical steps involves identifying the age, gender, location, socio-economic status and other essential demographic who would be interested in purchasing your product. By gathering such important information, you’ll make concrete decisions that ultimately serves your customers and eventually earns revenue for your company.
Once you study your industry and audience and show there is market demand for your value proposition, you’ll be on your way to a more effective execution process that will help your startup thrive.
2. Register Your Company Early and Be Knowledgeable About Legal Stuff
As a founder, building a successful startup is beyond just the idea. Get ready to wear different hats. Somewhere in the beginning, you’ll be the accountant, customer service rep, business development person and more. You owe it to yourself to be knowledgeable about most of the legal issues that might hinder the success of your company in the future.
I understand that you might not like the ‘legal stuff’, but that’s one of the most important aspects that will guard your startup from getting cut up in ruts that lead to further damage.
One of the first and most important steps is to register your company on time and under the right legal structure, to avoid incurring unnecessary liabilities that could hinder the company’s functionality. For some companies, getting your company trademarked in the beginning will be the best decision option, while others might need to be registered as a limited liability company (LLC).
Seek legal counsel and determine what legal form your company should be registered under. Take it a step further by learning about investors, co-founder implications, vesting, employment documentation, shareholder agreements and other vital legal documents for every startup. As a founder, your aim is to avoid any legal cases that might arise, not excluding trade secrets, especially at the early stages of your company. Not only will this information save your company, but it will keep you ahead and provide support for better decisions.
3. Hire an Excellent Team
Your team is the engine that helps your company move forward towards its vision. Hiring the right team people who have a strong understanding of your company’s vision is very critical to success. One costly mistake most founders make is hiring the wrong people just for the sake of getting work done. If your team doesn’t connect with the core values and mission of your company, it could frustrate your efforts of convincing them to do valuable work that births concrete results.
Your team must be hungry enough to create an excellent product, and support you even when you’re not available. In fact, it’s best to start alone than to get the wrong people on board. The quality of the work produced by your team is important to the success of your company and will help the growth of the company in the long run.
For the perfectionists, don’t try to be superman by doing all the work. Sara Blakely, Founder of the billion dollar company- Spanx, advices founders to outsource and hire their weaknesses as soon as they can afford it. Focus on excellence and progress instead of perfection, when hiring people. Get experts and other people who are willing to go the extra mile to learn and grow. Pay attention to signs that show you the negative sides of each potential employee and don’t hire based on a pity party.
4. Plan Ahead for Your Startup Funding
There are several ways to raise funding for your startup. The safest way to fund your startup is basically through your personal savings. Save up for your company’s launch and minimize cost as much as possible. Start-ups have very little cash to begin with and it’s important to preserve it to avoid running out before you start raising funding from investors.
Family and friends can be supportive, angel investors, crowd funding, business grants and other funding sources, can also help you get started.
However, don’t get so distracted in raising funds for your startup that you forget your actual product development and creating quality products that solves your customer’s needs. Create a balance by planning ahead of time and decide on the best funding method that would work well for your company.
5. It Might Get Tough: Execute Fast and Stay Focused on the Vision
“The fundamental activity of a startup is to turn ideas into products, measure how customers respond, and then learn whether to pivot or persevere. All successful startup processes should be geared to accelerate that feedback loop.”
“All innovation begins with vision. It’s what happens next that is critical.” (The Lean Startup by Eric Reis)
One thing that stops alot of start-ups on their tracks is procrastination and sitting on a product idea for too long. In order to know if your startup idea is really credible, you’ll need to brace up and launch. Get your product tested by your customers and get feedback on time to help you grow to the next phase.
In The Lean Startup, Eric Reis adviced on the importance of start-ups validating a business model by executing on their idea and assessing feedback from potential customers. This isn’t far from what we’ve seen from the big shots like Facebook and Twitter. They weren’t built on the perfect user interface. Instead, they launched first and kept on improving on their product including branding and other features that have helped them build thriving companies.