- Daily Zen
Industry Leaders Magazine has carefully curated a list of Dos and Don’ts that need to be kept in mind for any startup to be successful.
Startups are what the name suggests, starting off an enterprise from scratch. It is the millennial term to encompass the information technology-based businesses that have cropped up to service the industry and add to the technical know-how with innovative products and ideas.
If you are considering to strike off on your journey of entrepreneurship, you must have a strong desire to build your product or service. A startup involves a lot more than just a good idea for a business. It requires discipline, hard work, financial planning, skills, and perseverance.
About 90% of all startups fail. Hence, you must persevere in your passion and start right. Here is a list of Dos and Don’ts that need to be kept in mind for any startup to be successful.
First off let us go by the premise that you are in that particular business because you love what you do and have a passion to succeed. For that to come to fruition, one needs to do a thorough recce of the field one wants to enter.
Research the market, the competition, and the suppliers. Find out the potential risks and benefits of entering that sector. Do not blindly copy a successful idea that has worked. Bring value to the table, fill a gap in the business cycle of your choice.
If you have a business plan and along the way you discover some other realities, then be flexible enough to change course slightly. If a small tweak in the business in terms of product design, supply chain, pricing, or sales makes a difference, then incorporate it. When a business needs some infusion of ideas for betterment, then adapt to the change. Bring in the innovative ideas, even if it means taking a 180-degree turn.
It is necessary to acquire information and knowledge of the journey you intend to take. From formal education to gaining experience in the market, building networks and exchanging and imbibing knowledge, all are useful skills.
Even if there are just two people in the team, see that you are in synergy, and each brings a different expertise to the table. Feed off each other and complement.
When hiring, do not get taken in by a brilliant resume, look to fill in your needs. A good hire is worth four people, and a bad hire can cost you 30 percent of an year’s earnings.
How are you going to fund the project? A business loan, personal money, or are you looking for angel investment? Some people believe that they can plonk some cash into a business account, and things will work out by themselves.
That is a fallacy. Many a business have run aground because people got trigger happy with the initial seed money they got.
Plan to be soluble for two years and no profit no loss is a good way to begin with in terms of expectations.
Having just an idea is not enough, but knowing the right people to go to or leverage is essential. Right from financing to marketing to supply chain building, if you know the people, then the process becomes more manageable. You have to form new connections and nurture old ones.
Social media marketing is cost-effective and far-reaching.
Wrong choice of products or services to sell. People get into business without doing due diligence or researching the market potential for the business of your choice. According to a survey, nearly 45 percent of startups failed to take off because of the wrong service or product choice.
Do not follow in the footsteps of successful ventures. They have already found their niche; copying them is not the answer. Instead, try to fulfill a gap in their product cycle or supply chain.
This is a common story among startups. Quite a lot of them are able to raise initial investments. But most do not know how to handle it. Hire a professional if you are not good with budgeting and financial planning. Expect to be in a tight situation money wise for at least two years. Most businesses take that much time to show any profits.
The second most common reason for the failure of startups is that almost 20 percent of startups fail due to running out of money, says a market research company.
Get the right hire. Do not go on a hiring spree just because you have the money. Do not hire because he is your friend and somebody’s niece or nephew. Fill a job, not obligations.
Do not go for funding immediately. Sweat equity is the best equity, if you want to be independent and implement your ideas fully. First, build the business, then look for investment if needed. Mark Cuban suggests crowdfunding platforms like Kickstarter to try out first.
Market data says 47% of Series A startups spend $400k or more per month. Only 2 in 5 startups are profitable, and other startups will either break even (1 in 3) or continue to lose money (1 in 3).
Many people dream of starting their own business and going solo rather than making it big in paid employment. Starting an enterprise gives you the opportunity to operate independently, be innovative, implement changes, and indulge a passion.