Launching your own business can be challenging and, at the same time, overly exciting and rewarding. As you start your business, you will encounter numerous financial, staffing, legal, marketing, and customer issues. The journey from funding to becoming a brand is difficult indeed. According to research, the failure rate of startups is 90%, and an estimated 21% of businesses in the United States fail in the first year. Similarly, 30% of startups fail in the second year, 50% in the fifth year, and 70% in their 10th year.
“You have to see failure as the beginning and the middle, but never entertain it as an end,” says Jessica Herrin, the founder, and CEO of Stella & Dot.
Unfortunately, there is plenty of contradictory advice for aspiring entrepreneurs. Here, we present a guide to first-time founders and entrepreneurs navigating the startup landscape.
Start a Familiar Venture
Being a first-time founder before launching your business, think of something you are passionate about and know. Since startups can be grueling, you need to choose something that excites and motivates you. Avoid businesses you are clueless about because it may hamper your success. Kevin Rose, the co-founder of Digg, says, “Don’t let others convince you that the idea is good when your gut tells you it’s bad.” At the same time, choose a business idea that presents an ample market opportunity. Before starting your business, ensure that you do adequate research of your product or service market. Even investors will only invest in your business if they see a significant market opportunity.
Raise Enough Funds
Raising enough funds for your startup will be more challenging as a first-time founder and take longer than you think. You must ensure you have sufficient funds for product development and the marketing expenses that may be incurred. Ideally, you should have adequate capital for your operations. However, never worry about diluting your ownership share in the business. It takes time and a lot of money to develop an excellent product. Once you have launched your business, you must constantly monitor your finances. Several startups have failed because the entrepreneur could not adjust spending to avoid a cash crunch. Learn to live on a shoestring budget until meaningful revenues start flowing.
Research the Competition
Ensure that you have thoroughly researched competitive products or services in the marketplace before launching your business. At the same time, be informed about your competitors’ new developments and enhancements as a first-time founder. You can achieve this by setting up a Google alert to notify you about the latest information regarding your competitors. Since you are new to the startup landscape, you should not hesitate to seek advice from other entrepreneurs and business professionals. The input provided by lawyers, accountants, and business coaches can be valuable for your business. You may even set up an advisory board. It is advisable that you also read industry newsletters and startup publications. Also, find mentors who can advise you on hiring, product development, marketing, and fundraising.
Develop a Great Marketing Pitch
You must have a concise and convincing story about the operations of your startup and the problem it solves. You should have this ready for potential customers and investors. Often, you may have to customize it for a specific audience. Be eloquent about your mission and goals and why your product or service is compelling and unique. If you come across an interested investor, be prepared to follow up with an executive summary about the company or a PowerPoint that offers more detail about the business and the market opportunity.
Hire Experts as First-Time Founders
Often, new entrepreneurs make one of the biggest mistakes by hiring the wrong people. Since you cannot deal with everything related to your business, you should hire people with relevant backgrounds and experience. While hiring new people, you need to remember that your employees should fit into the company culture you are trying to build. They need to be hard-working and flexible, as startup employees must perform multiple roles. You should do thorough reference checks on them and remember the old quote, “Hire slowly. Fire quickly”.
Networking is essential for every business – whether small or big. Networking can get new investors, new customers, great employees, and even a great mentor. One excellent way to network with the right people is to attend industry and startup events. In addition, LinkedIn can also be a potent tool for networking. So, ensure both you and your company have profiles on LinkedIn and constantly add new connections. When someone does a Google search on you, your LinkedIn profile will appear at the top of the search results. So, make sure you are making an excellent first impression.
Offer Excellent Customer Service
For instance, several companies like Zappos and Virgin America became incredibly successful because they focused on excellent customer service and support. As an entrepreneur, you also want your initial customers to give referrals and praise you to their friends and colleagues. So, go that extra mile and thank your customers personally by email.
Just Do It
There is never an ideal time to launch a startup. So, follow the famous advice and “just do it” especially if you are among the first-time founder. Take the first step to building your business. Take the leap, even if it is only part-time, while you still have a paying job. “When you are building a startup, it is difficult. Particularly a startup that is expanding at the rate of Tinder. You must give 100%, and you must be committed. Solving the problem needs to be personal, or else you will disintegrate,” advises Sean Rad, Co-founder of Tinder Inc.
Leave a Reply