Starting a business checklist: 8 key steps most founders miss

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1 Starting a business checklist: 8 key steps most founders miss When running a startup business, what are the most important things? A great product idea, a business model, some capital and a drive for success? All of those. But important as they are, they aren t the only things needed. Paying attention to what others have done to succeed is highly important when starting up. But it s also important to look at what caused others to fail and what they missed doing altogether. If you re involved in a startup business, we can help. Here are the most important things to put into action and to circumvent when building a company. 1. Fundraising too early. Starting a company is expensive dauntingly so at times. We know it s tempting to get as much cash on-board as soon as possible, but it s not always the right thing to do. Business startups are unpredictable things though we d all love to see our projects make a profit quickly, and while the business plan may seem infallible and the product irresistible - others may not concur. Borrowing money from investors is very attractive but things can go wrong. If they do, one runs the risk of not being able to pay back the investors. The core aim of business is to serve the customer, whether that happens to be an individual or an organization. However, if too long is spent focusing on how to get money when starting up, fundraising becomes a time sink: there s less opportunity to spend time with customers and it s all too easy to become desperate for funds while losing track of the company vision. In the early stages of a startup, it s far better to focus on team-building, improving the product, testing, and client feedback. Many investors will not be looking to help if it appears a business desperately needs them they want to see that the resourcefulness exists to get the business off the starting blocks. After the company has lifted off, they re more likely to help it grow since there s a higher chance of return on their investment. 2. Not looking to make money from day one. It s easy to think that we won t make that much money in the early days of running our businesses. We ll put in a lot of hard work, and it will take a long time for anything to start coming in. This is the way businesses work, right? Well, in reality, there s little reason not to make money as soon as the business gets going.

2 Let s not forget one basic thing business is about money. Making it from the very start is a must. For example, if a business is developing an app, they could think about implementing microtransactions or charging per download. Businesses should look at the company revenue and all their expenses up front. If the product on sale is not going to make money from the beginning, it s time to move on and find another method or another product that will. The product doesn t have to make a large amount straight off the bat the quantity can be small but generating even small amounts can offer practical ideas on how to make an income grow. 3. Not having a tech co-founder (for tech/internet startups). It s been said that when starting a business, a technical co-founder is needed. After all, one can always be hired further down the line or outsourced. We can even learn to program ourselves why not? However, in reality, having a co-founder who knows about technology is a huge asset both to a business and its partners. Outsourcing can be hard since any team outsourced to may not be able to comprehend and share a company s vision. Additionally, if there s vital work that a contractor needs to do for someone else over a weekend, it could cause major issues. All this means that if work is being outsourced, people don t have complete control over their business. Next comes the issue of cost. If the co-founder doesn t come from a technical background it s going to be hard to understand the costs levied for work, and when starting a company, being lavish with spending isn t wise. A business shouldn t be paying over the odds if the work can be done for a fraction of the price or, ideally, inhouse. Some people suggest that it can be beneficial to learn to code when starting up. However, though having some cognizance of code is helpful, it is not vital to success, and the job is best left to those who have the expertise and who have been doing it for longer. Let s face it the better programmers are more likely to be those already in the profession. When starting up a company, it s far more important that we let someone in-house do the work while we focus on understanding the product, the market and building the company. If we ask an engineer about their work, they will probably say that most of the hard labor comes from writing code, whereas a salesman may say that most of the hard graft comes from selling the business. In a way, they re both right. The two are immensely tough and important roles, and taking on the technical aspects of the business without experience or outsourcing them ends up diluting the quality of work or risks loss of control through overspending. It s best to keep the tech duties in-house from the start in order and share ideas with fellow technicians, work on IT-related aspects together and keep costs reasonable while selling the business. 4. Having a CEO that can't sell (or do marketing). Having a CEO who can take on sales or marketing is vital. The CEO of a company should be selling the company at every opportunity they can - working hours, after hours, dinners, even parties. If a CEO can t convince others what the business is about and why people should be adopting it, then the job probably isn t for them.

3 A salesperson as CEO has insider knowledge of the firm and its products. Not only this, but they re more likely than anyone to have an interest in the success of the company. A CEO who can sell has direct contact with clients, meaning they can build up relationships, get feedback, and see what service to improve. They have a much better view of things on the ground. Selling gives us access to skills and areas which are vitally important, it puts us on the front line. Through selling, we re listening to customers and finding out what they value about us and what puts us above our competitors. It allows us to build and improve our business from the inside rather than from the top down. Marketing is another really important area. CEOs need to understand the market that they re getting into they need to be able to look at that data, interpret it and work out the best ways to develop their product in line with what their market is doing. It s important to be able to work with the markets and act accordingly. Since marketing underpins sales, knowledge of either area or both is extremely useful. If a CEO does not know about the market they are getting into, it s very difficult for them to get to grips with demand. Having knowledge of marketing also means the CEO will have a better idea of how to advertise and promote. In simple terms, if they don t know the market, they don t know the customer. 5. Spending too much time on the product before testing it with users. It sounds like a good idea to release a perfect product when starting up, doesn t it? Well, this isn t always true. Sometimes it can be best to release the simplest version so that it can be sold to someone who can test it. This will leave more of a runway the money needed to let the company maintain itself while trying to get the product off the ground. Until a product is let loose into the wild, it s difficult to know how people will react to it and, more importantly, the different ways that people will use it. Apps, for instance, can be used in many creative ways which aren t predicted by their developers, and it s common for users to take them in directions other than those which the developers intended. Continually testing, and testing often, is what strengthens the core ethos and design of a product. Testing a product will also show exactly what its flaws are, and what people find difficult to use about it. With the proliferation of apps and other products that are out there, and the ease with which they can be accessed, customers have limited time to choose a product and many have limited patience. If people like how a product is developing, they're going to be far more likely to recommend it to others and to follow its progress. 6. Not running a business model canvas. A business model canvas is a relatively new technique that summarises all the key aspects of a business model in one place. It s extremely effective at consolidating and improving on all the important areas of a business. The business model canvas is divided into nine sections: customer segments, value propositions, channels, customer relationships, revenue streams, key resources, key activities, key partnerships and cost structure. We ll go through them all: customer segments relate to the different types of customers organizations and individuals at which a business is targeted; value propositions relate to the types of

4 product that customers will use; the channels section looks at the best way to reach out to customers; customer relationships refers to the type of relationship a company wants to forge; revenue streams relates to delivering value through pricing; key resources relates to the assets within the business which are most important; key activities addresses the main activities which are the core of the business, while key partnerships show who the business can get on board to help deliver the right model. These lead to a muchimproved awareness of a business's cost structure. The business model canvas is excellent at not only showing how a business can be mapped out, but how it can develop in multiple ways. The visual method that the plan works under means that a myriad of different ideas can be explored to ascertain the best possible scenario for the customer. The customer value proposition is the central focus of the plan, allowing the company to think most about what its clients want and how best to streamline delivery. The canvas not only has the ability to do away with dull, verbose business plans, but it also gives users the power to envisage entirely different combinations of business strategies. It s a great tool to quickly see how to benefit both customers and partners. 7. Going it alone. When starting up it s an attractive idea to go all-in by trying to be an accountant and a lawyer, as well as focusing on all the other main points of the company. This way of working has unavoidable pitfalls and it s possible to become quickly overwhelmed while keeping too many balls in the air. The key to sorting this out is a BAIL set-up: Banker, Accountant, Insurer, and Lawyer. Giving these jobs to professionals will make things a lot easier further down the line. Not having a partner can incur significant risk. If, for instance, a business is sued by a customer, there is a chance that it could go under. Seeing as the owner would have to pay all the debts, they could lose possessions which could put additional strain on the owner s personal life. Having a partner or a team means all employees are less liable and the company can take on further opportunities. It s better for everyone the more, the merrier. 8. Forgetting that the customer is always right. It s easy for a startup business founder to think that they know their products better than anyone. Sometimes, however, the people that use the products day-to-day can be better judges of what s needed to improve them. Holding fast to inflexible ideas can have a stranglehold on a business. Often, when entrepreneurs are told to change things, they can get emotional and resentful of advice but sometimes heeding advice can be just what is needed to get things to change for the better. Customers that are happy with the service and the products they receive are customers that will give return business. Even though a company may have many happy customers, it is unfortunately not always the happy ones who are the most outspoken. The vocal minority can post harsh reviews on the internet which can really damage a business's name. Remembering that the customer is always right sets a high standard for service. Focusing on customers should be the main goal since they don t only purchase products, their words build reputations.

5 Now that you ve read our eight steps, you re much better equipped to get going with your startup business. The commercial world can be a difficult place, but these days there are a lot of experienced hands out there to guide entrepreneurs who are building a business. The most important things to remember are to stay customerfocused, test well and to have a great team. Commitment and indefatigable acumen go a long way to making things work. Most importantly, listening can be much more effective than issuing hard instructions. Now get out there and take some steps in the right direction.