Starting a business is not a cakewalk. As a new entrepreneur, you need to take care of a plethora of aspects of a business. It will be an overwhelming experience for you to start a new business from scratch for the first time in your life. You will have no idea about how to start or where to start and what is the first thing that you need to do.
Well, the best way you can start is by asking the following questions to yourself:
What type of business should you start, developing a product, or providing a service?
Is the product or service that you have created is brand-driven or marketing-driven?
How much is it going to cost you to bring your business off the ground?
How much financing do you require?
Do you need money, or do you need a strategic partner?
How are you going to promote your product or service on the market? Are you going to advertise it on an online platform or take the help of a PR firm? Or are you going to promote it on social media? If yes, which social media platform is going to be best for your business?
All these questions you will find in the different stages which are critical aspects of your new business: Such aspects are finance, product development, human resources, marketing, legal issues, customer satisfaction, etc.
Check out "Startup: Expectations vs Reality"
It is a common thing that your initial plans fail, which can lead to lots of frustrations, loss of money, and loss of other vital resources. It is essential to learn from all these failures and make changes. This plays a crucial role in learning a valuable lesson to run your business successfully. You must continue to learn and adapt as the business grows. There are some useful lessons that anyone venturing into the business world must understand.
The 10 major lessons have been listed here.
Finance is the Key
Your business must be backed by adequate cash at launch, especially when you need to invest in research and development. Thus, you need to take into account the time taken to convince investors before starting a business. There is a lot of time and energy involved in convincing investors to invest in your business. Investors require you to present information such as 5-year revenue projections, gross margins, and break-evens.
So you need to focus on these areas to convince investors. It is not advisable to insist on Non-Disclosure Agreement because it suggests you are wary of your idea being stolen. Investors are not likely to invest in your business if you require them to sign NDA. This hampers financing, which is the major requirement for a new business.
Funding Should be in Stages
Funding is crucial, but too much cash can cause the business to lose focus. Thus, it is necessary to take funds in stages as the business gradually gains momentum, increases in value, and the risks are decreased. Managing the finances adroitly is key to sustained business growth. Typical type of fundings you need at the early stages of your business include:
Seed funding: You need to do the viability studies of your business idea to see whether it is practically possible or not. Seed funding is done to do research works.
Pre-launch financing: After knowing that your business is viable in the real world, you need funding to develop a business plan. A business plan is made to create certain milestones and objectives for proper functioning and the creation of your business.
Startup financing: It implies funding for the production and marketing of your product or service. It also involves funds for operations of your business.
First stage financing: It implies funding for increased production and marketing.
Good product in Less Time
The product or service offered by your business should be able to make a meaningful impact on the lives of your potential customers while being different from what other businesses are offering. However, there should not be much delay in launching the product or service. Once the product is launched in the market, customer feedback will help you in making improvements and enhancing its value. Do not waste time in achieving perfection and hit the market as soon as possible.
Based on your customer feedback, you must also work simultaneously on the improvement of your product or service to meet their requirements. Constant innovation and changes play a key role in the success of your business. Incurring changes and making it available in the market as soon as possible is important as there is a risk that competitors might get an edge over you.
Marketing is Crucial
You need to sell your business to potential customers and investors. Thus, there are no shortcuts when it comes to marketing. Investing in marketing is always a beneficial deal because cheap marketing may save money in the short run but will end up damaging your brand. Hire marketing experts to design high-quality ads, SEO strategies, and other marketing techniques. It will be expensive but immensely benefit your business.
You can see how giants like Apple and Amazon spend millions in adopting different marketing strategies to increase their sales. In the beginning, you must go for marketing channels which need less investment and produce good results. For example, social media marketing, unpaid SEO strategies, email marketing, networking, etc.
High-End Business Website
Along with that, website security is also essential with rising threats of cyberattacks. You are at risk of making your website blacklisted and losing the majority of your traffic. Even small business websites get hacked nowadays, so never compromise on your website security.
Numerous paid web security frameworks can audit and track any potential risks regularly. You can also hire someone who has expertise in using these frameworks.
Get the Founder Agreement in order
Founder agreement is a piece of document for a business with multiple founders. The Founder agreement should clearly define the roles and responsibilities of each founder to avoid confusion and conflicts in the future. The agreement must also split the equity ownership clearly among the founders. Intellectual property assignment must also be a part of the agreement to ensure that the intellectual property belongs to the enterprise and not individuals.
Outsourcing is Beneficial
In order to minimize the in-house staff, you can outsource some specialized tasks to freelancers and consultants. Outsourcing not only reduces staff expenses but also frees up the in-house staff to devote more time to tasks linked to generating revenue.
Some of the key benefits of outsourcing are: make your business more competitive, effective utilization of time to produce maximum results, 24/7 customer support as well as operations, utilization of skilled expertise, etc.
Hire an Expert Business Lawyer
The common mistake that newbie business founders make is to hire inexperienced business lawyers to save money. This is not an advisable course of action because it is necessary to avail the services of an experienced business lawyer to avoid legal problems and get the best legal advice on a host of issues that may crop up as the business grows. The business lawyer must be an expert in tax laws, employment laws, contract laws, intellectual property laws, venture capital and angel financing and corporation, securities, and commercial law.
Provide Information to the Investors
You need to keep your investors informed about the current status of the business through monthly updates. The updates must include a summary of the progress of the business, information about a product, metrics in focus, current cash position, and monthly burn rate, strategic issues, and team information. Doing this on a regular basis helps in maintaining trust with your investors and will help in avoiding any future conflicts.
By keeping your investors aboard for a prolonged period of time helps in a smooth flow of funding to your business without any disruptions, which is also a key parameter for your business success. Along with this, you also need to maintain this trust in an efficient way by maintaining your integrity and credibility.
Hire Employees Correctly
You must ensure that the employee has adequate experience for the job which he/she needs to perform for your business. Academic credentials and references must be given importance. Ensure that the employees need to sign confidentiality and inventions assignment agreement. Apart from all this, make sure you do a thorough background check of the new hires as some hires having a criminal background might hamper your business image.
This is the beginning of your task as an entrepreneur. To stay abreast of the profit and stay afloat, you always need to be growing your business. It's going to take time, indeed, but you'll get out of your business!
Contributed author: Jessica Rose