5 Steps for Start Up Success
1. Are you really an entrepreneur? This is the first question you must ask yourself. While many like to fancy themselves an entrepreneur?—?the success of tv’s “Shark Tank” is based upon this very belief?—?too many business people confuse “entrepreneur” with “risk taker.” Certainly the entrepreneur must be willing to take some risks in creating a new venture. The smarter entrepreneurs, however, have limited those risks from the beginning. Risk Management is an underpinning of all successful ventures, and the more time spent analyzing business risks, including an honest “SWOT” analysis (strength, weaknesses, opportunities and threats to the business), the more likely the opportunity for success.
2. Operating the business does not require innovation. Being creative or having innovative, unique ideas are certainly benefits that can distinguish a firm’s products or services. Indeed, if the business plan is based upon introducing new products to an existing market, the entrepreneur will need to promote the differences in those products. In operating the business, though, the smart entrepreneur follows business basic principles in legal, accounting, finance and human resource management. Leave creativity to the product development team and instead operate the business conservatively, with time-tested fundamentals.
3. Do not depend upon friends. You might “get by with a little help from your friends” but your business will not thrive. The natural inclination for any entrepreneur is to presume that friends, family and close personal relationships can be tapped as buyers, consumers, or referral resources for the new company. Why wouldn’t these people want to help the entrepreneur? Simple advice?—?don’t mistake friendship for business. The sales plan that relies upon personal relationships as a major component is doomed from the start. Rather, the successful entrepreneur predicts sales from those with whom she had a prior business relationship, and with whom she has a track record for delivering products or services that exceeded expectations.
4. At all costs, seek the right partner to finance your business. As I remind my children all the time, Rule # 1 in Life is to marry the right person. Rule # 2? See Rule # 1! Same rule applies when seeking financing?—?selecting the right partner to support and help grow your business is critical. Choose wisely, and with a long term view. Consider the many options available for financing?—?traditional bank loans, private equity, partnerships or strategic alliances?—?before deciding upon which structure works best for your business model. If additional capital is going to be needed to fund growth, plan for that from the outset. Business professionals advise that most start-ups are under funded and destined to fail within the first 12 months.
5. Plan for success. Too many start-ups are surprised by their own early success, and allow competitors to quickly jump into the same market. Assume everyone is watching and trying to copy your model. If you did not plan to grow your business, your early success will simply be a launching pad for some other smarter business person.
Good luck and visit us today at Procor Solutions + Consulting!