What’s the magic secret for a successful start-up? As most people are aware, there isn’t one.
Even if a group of entrepreneurs have a golden idea for a start-up, this won’t translate into success unless a number of factors align: timing, capital, market preparedness, scalability, expertise, etc., etc.
So, the truth of the matter is that, for a start-up to be successful, it needs to be doing a whole bunch of things right at the same time. And to be doing all of these things right at the same time, you need to be constantly putting your ear to the ground and gathering information.
And that’s why you’re here, isn't it?
To help you out on your journey, here are the start-up business tips you need to be aware of to get things moving in the right direction.
The unfortunate reality of start-ups is that many of them fail. Some estimates suggest that the number is as high as 90%, but the Australian Treasury suggests the number is likely lower. Either way, things rarely work out the way you think they will when you’re an entrepreneur, and so much of it has to do with being poorly prepared.
A lot of entrepreneurs feel absolutely certain they’ve got an idea that’s going to work, but there is often some blindspot that undoes them. Although it’s often said that entrepreneurs learn from failures, in reality, these failures can often be so fatal that there is no second chance to learn from them.
The other reason that planning a start-up is so important is that, along the way, you are likely going to need to show a lot of other people your planning. At the low end of importance, you’ll be showing collaborators and employees. At the high end, you’ll be showing investors. This latter group will walk away if you can’t at least show them a business plan executive summary that demonstrates you’ve thought things through and that you know what you’re talking about.
With that in mind, here are some areas in which a start-up needs to do some serious planning before getting going with the actual business.
Of all the tips for starting a small business or start-up that you could get, this might be the most important: research. Too many start-ups have failed because their operators knew their idea was golden but didn’t know much else.
It’s important to do research for two reasons. The first is that it holds very practical value in guiding your decision-making. The second is that, once again, you are one day soon going to need to prove to someone (investors) else that you know everything there is to know about what you are talking about.
Research can be focused on the following areas:
A start-up needs to not only know who its market is but also everything about them. For example, how do these people shop, how do they get information, and what other things interest them?
When you know about the people you are selling to, you know how to tailor your product and also how to reach them.
Of course, your product is excellent, and it may be a whole lot better than what others are offering (or maybe no one is offering anything like it). But you still have to research what the current comparable products or services are. Then, you need to work out what those offerings are doing well and doing poorly. Finally, you can focus on your point of difference.
Lastly, you need to know who the other players in the game are, and you need to study both what they’ve done well and what they’ve done poorly. This will help you avoid certain mistakes, give you inspiration for improving your methods, and also reveal opportunities to fill market gaps.
It can be very tempting to get the show on the road as soon as possible, telling yourself that you will work out how to cover costs as things go along.
But this is a recipe for disaster.
The reason is that, when you do run out of money, there usually isn’t an option to hit the ‘pause’ button. When you try to hit pause you usually end up losing capital and you also hurt relationships with clients, customers, suppliers, and investors. In turn, your brand is tarnished, along with your own confidence and momentum.
So, work out where your money is coming from before you do anything. Make sure you check out the grants offered by the government, as well.
Of course, all start-ups dream of success, but not all of them plan for the mechanics of the transition between the revenue of $1,000 to $1,000,000. Thinking about the transition to larger scales can be boring, but somewhat like the issue of capital, you can get stung badly if you try to work it out on the fly.
What happens for example, when people get interested in what you’re offering but then you don’t have the infrastructure to give it to them? The answer: disappointment and brand damage.
Without getting caught up with dreams, work out what resources will be required to reach certain milestones and have practical plans for getting those resources in place when needed.
Networking is something that you should be doing whether you’re just getting started or you’re already hitting your first milestones. Networking turns some people off, particularly because it can seem a bit superficial. But the benefits of networking are really quite concrete.
If you network well, before too long you are going to benefit from:
Find ways to meet and get chatting.
A major issue for small start-ups is that they lack personnel in key expertise areas, and this can clip their wings from the get-go.
The most common expertise gap that start-ups face is on the IT side of things. This is because the vast majority of start-ups now need to be reliant on some kind of technology platform, whether that relates to customer apps, websites, inventory tracking, or payroll.
But of course, IT isn’t the only skills gap that can cripple a start-up. Some entrepreneurs can code like demons but don’t have any clue about how to optimise online marketing, build a client base, or manage finances.
If you have a skills gap, you can’t afford to put your head in the sand about it, because this is likely going to undermine the value of your offering or cost you time and money. Sooner or later, you will see that cutting corners isn’t an option.
Research and network to find what you’re looking for, and don’t be afraid to offer equity to get you where you need to be in terms of the skills on your team.
So, you’ve got the product set up, but why isn’t the money rolling through the door? Most likely because you’re not marketing well enough (and this is where having the right expertise on board is critical).
As you’ve already done the research, you should know to whom you are marketing your offering. In turn, this should teach you something about what channels you are going to market through (Facebook, Instagram, email, television, banner ads, snail mail, etc.).
Now it’s time to hone a custom-built marketing plan — and bear in mind that putting this plan into effect could represent a significant portion of your capital.
If people don’t know about what you’re selling, how can they buy it?
Documentation is everything. Whether you’re submitting tax, showing numbers to an investor, or getting the right registrations for a grant application, you absolutely need to have your documents in order.
It’s probably the most boring aspect of any start-up, but it will ultimately be the most important if it causes you to fail.
Part of the documentation that you should be maintaining as you go is your business plan. You want to be continually revising and expanding this plan, even when things seem to be running smoothly.
On the one hand, you may need to show more people evidence that you know what you’re talking about. But, on the other hand, continually planning will also mean that you always force yourself to think about what opportunities and dangers lie ahead.
One of the big issues of starting up a business is the overheads involved with setting up office space. It’s not just that a lot of office space contracts lock you in for extended periods, but also that it often costs a lot of money to kit that office out so that you can actually get work done.
But in the modern business era, there’s another option: flexible office space.
Flexible office space, or a coworking office, gives a start-up the flexibility to enter into a fully set-up workspace quickly and easily, without the need for an expensive lock-in contract. This is essential for prudent start-up operators, who should be aware of the real possibility that things might drastically change course within the first 12 months.
Also very important is the fact that a coworking space gives start-ups the flexibility to scale up and down with personnel very easily. This is critical because a start-up personnel base can fluctuate a lot within short spaces as new clients come on board, markets become unviable, and all sorts of other eventualities come about.
An added benefit of working in a shared workspace office is that it gives start-up operators the opportunity to meet and collaborate with a whole range of business contacts they wouldn’t get exposed to otherwise. Network, network, network.
If you want a flexible workspace option to get your start-up rolling, get in touch with Christie Spaces today.