So, you are passionate about something and have identified an area needing a significant amount of improvement in there; what better time to take the leap and have a startup of your own? I mean, isn’t it the best when you can turn your passion into profession?
Absolutely right, now is the time to plunge into that entrepreneurial venture, perhaps better than ever, just as countless people around the globe. But I also happen to personally see and know many people taking the bait, biting off much more than they could possibly chew and biting the dust eventually.
Now, does it mean you shouldn’t think of initiating a startup? Absolutely not; all I am saying is to know exactly what you are about to jump into. Whether you like it or not, a magnificent idea will only get you so far. Isn’t it just plain common sense to bring along an umbrella if you see clouds covering the skies?
If you are certain it’s about time to start your own company, I am just here to assist you in getting some absolute basics totally right, so that your odds of actualizing your dream get better.
Here are three basic steps to breathe life into your startup:
1. It takes two to tango – assemble a reliable founding team
Why? I mean you can very much raise your eyebrows to the idea of assembling a founding team, but before you do so, just come up with a few of the most successful business ventures of our times.
Most of you will start the list by Apple, of course. What about Google? Did I forget to mention Twitter? What about Yahoo and Microsoft? In case you are wondering what’s the point of mentioning all these names, all of them had two cofounders when they started.
So, what do I want to establish? Well, nothing more than the fact that the odds of success of a startup enhance manifold when it is cofounded by two individuals. Does it also mean that a single person or a team comprising of more than two has no chances of success? Surely not, there’s no single formula to a startup success, but stats support the notion that it takes two to tango!
There is a twist to the tale though, the idea of cofounding with your closest friends and family. Apparently, there’s no harm in it. Just make sure their skills are a right fit for your entrepreneurial undertaking. Also, make sure you two are bonded strongly, because the highs and lows of a startup will definitely test the strength of the bond between the two of you.
Moreover, take due time in finding the best person as your cofounder, because it’s the keystone to the whole bridge you are looking to put together. And the chances of this happening overnight are almost close to none. It’s better that you don’t rush into this.
“Talent wins games, but teamwork and intelligence wins championships.” – Michael Jordan
2. Have a solid plan
So, with the most awesome idea and an even more awesome founding team, you are all set to inspire the whole world with your startup? It won’t be possible without a great plan in place.
You don’t necessarily have to write a 1000 page long document, but you must have a model for growth in addition to a pitch to play with investors (even if you have no immediate plans for raising money).
There are some serious questions to be answered before you go hitchhiking the treacherous domains of entrepreneurship. How big is the market that you are looking to target? How much of it do you think will you be able to cover surely and easily? How much time would it take? How many people would you need to hire initially? What would you be charging to lead your business to a profitable place?
It’s imperative to think about how to capitalize on any potential growth opportunities as they surface, and how you will execute the plan when it’s needed. There’s no end to the open questions you come across as a startup, but having a better understanding of the most critical aspects is the least bit you need to move forward with.
3. Run through your finances like never before
It’s almost certain to live without a paycheck for a while when you give your startup a go. So, you better take a good look at a number of things related to your finances before you kiss your day job goodbye forever.
Get a realistic estimate of how long you can survive without getting paid. One of the best ways to do so is by comparing it to when you plan to raise money (this also includes generating income from your business). In most cases, the time consumed in fundraising prolongs to 6 months or even more. So, be ready to divert some of your savings towards company expenses in the meantime.
Sounds intimidating? It can be, but there’s always a way around. Luckily, there are a few very good financing options nowadays for budding startups, like Y Combinator or TechStars. They offer help in covering early expenses while you come up with your prototype. Or, you might consider working nights and weekends on your business to minimize the time you have to survive without a salary. Also, not to mention, the age old technique of cutting back on unnecessary expenses to make some much needed savings.
“Well, I think that there’s a very thin dividing line between success and failure. And I think if you start a business without financial backing, you’re likely to go the wrong side of that dividing line.” – Richard Branson
What would be my next advice once you have assembled your dream founding team, come up with a feasible plan and sorted out your financial viability? I will suggest you halt everything else and get set go!
Share your personal experience/opinion in regard to your startup in the comment section below.