If you are thinking of striking off on your journey of entrepreneurship, then you surely have a strong desire to build your product or service. But having a strong passion for your idea is not enough; a startup involves a lot more than just a good idea for a business. It requires discipline, hardwork, financial planning, skills, and perseverance.
About 90% of all startups fail. Hence, it is imperative that you start off right in your venture. Let us form a list of the bare essential skillsets and planning that a startup needs:
Passion and planning
A belief in whatever you are doing. If you have thought of going into a particular business because you see others doing it, then that is not the right reason. Your business idea needs to fulfill a need or a gap in the service cycle. If it is a unique invention then you need to build a plan of action. What is the market size? Is there a demand for such a product? Competitors in the space, customer base, all need to be studied.
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, then 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.
A fundamental business rule is that you need to put in money to earn more money. Especially in a startup, you need to budget out everything. Hiring indiscriminately and spending money on salaries is not conducive to good budget practices.
If you are not good at managing the money, then take professional advice. 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). The second most common reason for failure of startups is that almost 20 percent of startups fail due to running out of money, says a market research company.
A startup is not a cakewalk. It will require you to put in all hours and days to keep it running. You will have to walk that extra mile for things to sort out initially. It does not mean any time off, but it has to consume all your working hours.
A business evolves as it takes shape. Once you start a business, your idea may need a little bit of tweaking or even some drastic changes. That should not scare you, nor should you become adamant about your idea or product being the last answer.
Once you face a real market situation, you may realize you need to incorporate changes as you enter the market. New factors can arise that may force you to change some part of your business process. You should continuously be on the lookout for ways to adjust and make changes, rather than letting your emotional connection to the idea or process get in the way.
Another reason that 42 percent of startups fail is that they misread the market demand.
Perseverance and seeing it through
Starting a business is a lot easier than seeing it through. You should have goals and achievements figured out at the outset. And, most importantly, how to reach those goals.
It is easier to see the big picture and dream of it, but how you are going to achieve that is what perseverance is all about. 10% of startups fail within the first year.
Learn what needs to be done. If in the journey you need o do some heavy lifting on the job, then learn the skills or apply them or gather experience to do it right, but persist in your goal. The process may take time but see it through.
The learning is in the journey and the process. Two percent of successful business owners admit they have the right qualifications and backed up experience to run a company, even with limited cash flow.
Having just an idea is not enough, but knowing the right people to go to or leverage is as 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.
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