The startup phase of your new business will be an exciting, exasperating, and predictably uncertain time for your new enterprise. There's satisfaction and purpose in creating a business from scratch, meeting unforeseen obstacles, and attempting to prove a concept with your colleagues. The trade-off for this sense of magic is the frustration of beating your head against a metaphorical wall, and being forced to rebuild the processes, personnel, and assumptions you set out with. There's also the fact that many businesses fail, and that your financial security, reputation, and personal wellbeing are also on the line.
Here are seven lessons worth contemplating for those with a vision of their own startup business:
1. The Playing Field Is Not Level
If you're not connected to a wealthy family, bellwether business interest, or influential organization, it will be easy to appreciate the fact that the playing field your startup exists on is not level. Entrepreneurs with a proven business record, investors with deep pockets, and the beneficiaries of old money are often one and the same, and they all have a distinct advantage over bootstrapping startup founders.
Don't be discouraged. Be grateful for whatever advantages you do have (you can read!) and get started. Because there's a great statistical probability that you're not one of the true business elite—it's wise to partner with other people as soon as possible.
Outreach will multiply the brain power, connections, and social complexity of your venture, and you will come to depend on these colleagues in order to successfully grow a business.
Find a personal mentor who can coach you, make introductions on your behalf, and give you honest advice on each part of your operation.
2. Keep Your Day Job, If You Have One
At the beginning, a startup will cost you lots of time, money, and mental bandwidth—and chances are you won’t make a profit at first. Keeping your business separate from your other work will allow you to maintain a personal budget and keep the lights turned on while you moonlight as an entrepreneur. It will also increase the number of colleagues, mentors, and business processes you can reference while getting your personal project off the ground.
3. Planning Before Action
There's a long list of pragmatic details that must be accomplished before you can successfully launch a new business. Write a business plan, set goals, and don't skip steps because they're tedious. Strategic grunt work is a key feature of bootstrapping your way to success, but you'll also be forced to delegate tasks to specialists as your business matures.
Both Google and Microsoft offer free templates for creating a business plan quickly. Google Docs and Google Slides are valuable for their collaborative tools which allow anyone on your team with an internet connection to access the latest version of whatever document you're working on. Word and PowerPoint are beneficial for their ease of use and accessibility.
4. Accelerator Programs Can Help
If your startup is prepared, participation in a business "accelerator" program can be an insightful route to receive feedback, practice your pitch, and potentially raise money. Both public and private funds are available to companies who compete in such programs, and accelerators are often hosted through the cooperation of universities, financial institutions, and private investors. Popular accelerators include Y Combinator, 500 Startups, and Techstars, all of which work with early-stage startups and focus on business strategy.
According to the U.S. Small Business Administration, calculating your startup costs ahead of time can help you:
- Do a breakeven analysis
- Estimate profits
- Secure loans
- Attract investors
- Save money with tax deductions
5. You Can't Have All the Expertise
Mitigate financial risks by hiring an accountant. Hire a receptionist or FAQ answering service if you're not skilled at working over the phone, or don't have the time.
Be humble and ask for help when you need it. Outsourcing can be an affordable way to manage tasks and delegate work. Do a cost analysis of how much time will be saved by hiring a specialist, and calculate what you will earn with the time that has been liberated in your schedule.
6. Refine Your Sales Pitch
If you work with a team of differentiated personalities, you don't necessarily need to be the one out there cold calling and making sales presentations on behalf of the business, constantly posting on social media, or personally serving customers. However, you must always pay attention to the way the brand is marketed and received by others, and ensure that your team has prepared a detailed marketing plan. Listen intently to others and search for opportunities to practice your sales pitch.
The Elevator Pitch
Having an "elevator pitch" that you can deliver on-the-fly is a game changer when it comes to soliciting interest in your product or service. Your pitch should be less than 30 seconds, direct, and delivered in simple terminology.
7. Startup Legitimately
Choose the correct structure for your business, buy insurance, and familiarize yourself with the prominent law firms in your industry and location. Skimping on insurance for equipment, taxes, employees, or auditing could cost you the business and your own financial security.
Be sure your startup is properly registered with the local and national government and be absolutely certain that you're complying with all taxes and regulations.
Longevity—the less realized and less talked about phase that comes after being a startup—depends upon your legal status as a business.