It can be a very emotionally filled time when you venture out and start your own company.
You will experience extreme highs and lows.
There will be fear and second guessing, terror when you think things are falling apart, and excitement and joy as a fledgling idea transforms into an actual business - and it's yours! No two startups are the same and yet they have many things in common.
The following are some tips for success that will help you with any startup.
1.
Only start a company to do something you have a passion for.
Make work something you enjoy?! Most think that work is just for money, and starting your own business is to make more money for yourself.
Your new business will steal almost all of your time, patience, and attention in the first few years.
If you don't love what you're doing, not only will it destroy your company, it will take you down too.
2.
Plan for the worst, hope for the best.
It's not pessimistic if you plan for the worst.
You are not mentally preparing to fail or anything like that.
You are being careful and dutiful when you ask questions like, "If I can't sell enough product, what will we do?" Even before the beginning, you need to plan your exit strategy.
How many losses can you sustain without permanently damaging yourself? When is too much money invested too much? It doesn't have to be all bad.
How much of percentage of shares are you willing to take.
What is the minimum amount you will accept in a buyout? The point of planning the end at the beginning is that you are doing it when clear-headed and not steeped in the emotions of the time.
3.
Use what you know.
It can be easy to justify big purchase of equipment, hardware, and software simply because that's what businesses have, or you will need it eventually.
Start your business using your three year old laptop, do the budgets in excel, manage the database in access.
Stick with what you have, what you know, and what is familiar.
You can always upgrade as needed later.
4.
Can you be too good at raising money? Getting a startup off the ground requires money, usually a lot of it.
So raising money is an important skill to have.
However, it cannot be the only reason for your company.
For example, if you get a mass of investors involved in product with limited sales potential, regardless of what happens, your investors will want a return on their investment.
5.
Watch the eggs; keep them out of one basket.
Especially when capitalizing on a niche market, limiting the scope of your business can be very damaging in the long run.
Make sure that your company is not too dependent on one particular market.
If that market isn't robust enough to support your company, changes, or disappears, you may find that your company cannot change fast enough for its survival.
6.
Beware the only preferred shareholder.
The two most common times to really need money are at the beginning of an enterprise and when expanding.
Venture capitalists can get you that money, but tend to only want to invest in a company that is already worth a lot.
When you get down to sign the paperwork to make them a shareholder and take their cash, make sure to read and understand the bit about "preferred shareholders.
" You probably already know this means that the preferred shareholder (the VC) gets their money back first in cases of buyouts and such.
After that, you and the other shareholders divide what money remains.
This seems fair, but if your company is sold when its value is down, the VC will get all their money leaving little left over for you.
7.
Don't hire top managers too soon.
If you were a freelance manager, why would you want to work at this fledgling new company?You probably wouldn't.
Businesses that are attractive to managers are business with customers, cash flow, and recognition.
Yours probably does not have little to any of those.
Even if instincts tell you to get someone in the hot seat instead of you, ask yourself if this is really the best time.
Try to wait for the moment when the business will pay for the manager, rather than getting a manager to make the business pay for itself.
8.
Use a lawyer, but not too much! There are many, many pitfalls in starting a business and a lot of them can be avoided with the selective use of a lawyer.
There are many companies on the internet offering standard, boilerplate contracts and waivers that are a godsend to new business; saving them countless dollars that are needed elsewhere at the beginning.
Shop around and find a business lawyer so you'll have one when you really need it.
Use the internet and take care of all the legal details you can, then call your lawyer to look it all over as a double check.
It will be vastly less expensive that hiring him to do everything for you.
9.
Unless it's your product, don't put a logo on it.
Money is the lifeblood of a startup.
Its presence will make things happen while its absence will guarantee failure.
Don't spend money on frivolous things.
A big case in point is putting your logo on shirts, not for sale, but to give to friends and customers.
Yes, you are getting your name out there, but no, that little will not make a difference.
Save your money for other parts of your business that truly need it.
10.
Make it fun! You have a passion for your business because it's yours.
Your employees may agree to some degree, but still a big part for them is their paycheck.
To get the full potential out of your employees there are many management methods you could try, but most often the best one - for you and them - is to make it fun to come to work.
Celebrate victories, birthdays, and Thursdays.
Reward good sales, achievements, and people.
Encourage ideas that make employees comfortable, happy, and productive.
Guess what: you'll have more fun too!