There exists a dilemma on whether or not to take that first step towards entrepreneurship. It’s a different ballgame when it comes to taking that leap of faith. Certainly, it can be challenging to do a business “part-time” until it is either big enough to manage or shrink to a level where its sustainability is jeopardized. But the most effective way to find out if your idea is going to work is to simply go all-in. Otherwise, you will never truly know.
Do you know that only 20% of small businesses can sustain above one year? And almost half of the rest wind up their operations within five years of starting up.
And if you are moving ahead then better ask yourself a few questions that you are too afraid to ask otherwise. For example, will you be allocating huge funds or bootstrapping? What are your sources of revenue? What are you going to sell? These are just the basic ones. Brainstorm on the following to get the best out of yourself as a startup entrepreneur.
1. Who are the people you are bringing on board?
Talent plays a crucial role in defining the strength of your workforce. Best is to test the mettle of each individual that you rope into your business early on. It’s a great asset to have talent around you especially while building an A-team for your startup. Having great talent around in a new business is the key to success. Be sure of what you are looking for. Scaling up? Sustainability? Rapid growth? Answer these questions honestly and pick up the team accordingly. The skillset of a team that works from scratch to scale up a newly found business is different from the one that is expert in doubling the business.
Bring in talent by offering whatever you can, be it ESOP as a part of their compensation package as well. Consider keeping 15-20% of your total equity aside for your key players as a rule of thumb. All the expert individuals that you rope in initially will also have an emotional connect and are those whom you cannot afford to lose. They are ones whom you simply cannot afford to lose any matter where they stand in the hierarchy. You will need their assistance as they offer something new to your business frequently.
2. The ‘must-have’ funds you need to kickstart
Have you gauged the amount you require in starting your new venture? Well, what about the precise ‘must have’ for long-term sustainability? Many remain unsure of audience response and choose to invest in research get to a conclusive figure. No matter where the funds come from, having a ballpark goes a long way in battling operational hiccups. Limiting the usage of funds initially is a great way to identify the bare-minimum required funds to operate a business.
Many founders go bonkers when they are funded only to see the finances plummeting later on. When you have known the minimum amount to run a business, you will usually know when to stop spending and where exactly you need to cut corners.
Leverage profit to accelerate phase-wise growth and capitalize on every possible financial leeway you can. Regardless of what sort of purveyor you are, stick to basics of old business – earning bare minimum out of whatever is invested. But at no point surrender to swindling to help your business thinking it will romp you to victory. Prepare a list of things that you ‘must need’ to buy just to give your business a good start rather than toying around with the ideas of what you want to have. You will be surprised to see how preparing that list will shrink your budget and see profits on the surface.
3. Do my business have a USP?
You will need to have an upright answer to ‘what differentiates my business from the competitors’? No matter if it is only a couple of things, there has to be something in your business which should serve as a special sauce. That’s something to stand out amongst the rest.
For example, we offer a comprehensive legal process dashboard to users, bringing in transparency to the legal process that involves bureaucrats at every step. If someone opts to register private limited company online, it provides them with an easy way by listing all the required documents for the same and what all need to be fulfilled to get started.
So far as the special sauce is concerned, review every corner of your business as it can come from any operational sphere. Right from how users can render your services to improvement in the quality of their lives by choosing your product. It can be a competitive pricing, exceptional customer service, and the way you craft your product around a greater cause; like, organic cotton cloth, etc.
The question you need to ask here is “What will tempt, push and even lure prospective customers to make a purchase my products/services over the competitors?” And now, see if your special sauce offers an answer to this question in affirmative, go ahead and weave a marketing plan around it.
4. How will I tackle legalities involved in starting up?
There are a plethora of boxes to tick when you think of legalities involved in starting a new business. Right from registering a company to making vendor and employment contract. And if you are looking to carve a brand out of your startup in a longer run, then you must also opt for trademark registration in India.
I have seen many businesses reinventing the wheel in every aspect and trying to address the legal concerns all by itself. While it’s a good thing to immerse yourself completely in your business, but that shouldn’t be at the cost of your primary activities.
Before you plunge deeper into this, ask yourself “Do I know all that I am going to do to get my business compliant?” If not, better consult business professionals to leverage to leverage their expertise and experience in the industry. Same goes for the legal business consultants. It is now easier to find online legal consultants to help you cover the fundamental legal grounds of starting a new business.
5. What are my Resources? Can I manage them efficiently?
All I can think of now is a movie scene from the film Cast Away wherein in the protagonist Tom Hanks opens up all the floating packages to repurpose for survival? That’s the true mettle any successful entrepreneur should have. Especially if you are running a lean startup then efficient employee management is the key.
Some agonize about everything they don’t have. But it all boils down to what all you have and you plan to utilize it to better your business. And those of you who are still in your college and dreaming to be an entrepreneur, your best resources are your professors who are can guide you and make you aware of the industry happenings. And then you have all those numbers, the customers – your pals and other students. Consider them to be your future customers and collect feedback on your ideas.
Again, list out everything that can benefit your business including skills, people, underutilized resources and you will soon discover how to make the most out of the least.
Well, DON’T ASK THIS QUESTION to yourself: “Is it the right time to start my (ad)venture? There is no better time than ‘now’ unless you simply beat the bush around the idea of starting up. Rather ask “How can I make the most out of the available resources and what I’d expect in return from it”.
Passion alone won’t fetch you profits. Daydreaming won’t build an empire. You will have to grill yourself, unlike a job where your boss will take up that ask. So if you are genuinely on to this one, ask yourself harsh questions and answer them honestly. Because, for these questions, only you will be having the answers. If you have recently started a business, leave us a comment on what all questions you live through while starting up?