Garages and basements, not tall glass buildings, are are the birthplaces of business legends like Amazon, Microsoft, Google, and Apple. Startups may have humble beginnings, but they have the potential to grow into multimillion-dollar corporations with the right combination of people, goals, and financing.
If you’re starting a startup company, you’ll need to consider these eight tips to increase your chances of launching a successful business. First, let’s begin with defining what a startup company is.
What is a startup?
A startup is a company in its beginning stages. It’s founded by entrepreneurs and funded by banks, grants, the company founder, and possibly the entrepreneur’s families and friends.
Unlike a small business, a startup’s goal is to grow fast because there is a large market for its product. Many startups are tech companies for this reason.
It’s not surprising for startups to begin in someone’s basement or garage, with boxes of products stacked in the home and the CEO’s desk in the garage.
One of the key ingredients that will take a company from this humble beginning to rapid growth is leadership.
Startup Tip 1: Strong Leadership
Having strong leadership and a talented team are two of the most important ingredients in a startup. The CEO and the management team develop the company’s mission and vision and inspire the team to keep going, even in the darkest times. In the beginning, a startup will experience some rough ups and downs.
The leader is responsible for ensuring that roles and responsibilities are assigned to team members, and everyone is held accountable for their tasks. The leader also sets team goals and clarifies what will happen if those goals are not met. For example, will they need new goals if the original deadlines were not realistic?
Having strong leadership is key to a startup’s success. Without a clear vision for the company, a startup could drift like a lost ship blown from one direction to another, achieving little.
Startup Tip 2: Talented Team
A talented team will take the startup to the next level. What roles will each person have? Each team member should be assigned roles and responsibilities depending on their skills and expertise.
If someone has accounting experience, they can recommend the best software at an affordable price to begin tracking financial transactions, for example. Someone with HR experience can begin formalizing work contracts and policies for benefits and work hours.
The upside of a startup is the vast expanse of unexplored territory. Company rules have not been established, and decisions need to be finalized about software and communications systems. The team can choose how the company is managed.
The downside is that if the team doesn’t make these decisions to organize how the company is run, chaos and frustration can set in quickly, and team members will quit.
When finding people for a startup, choose talented people who can help get the company organized and running efficiently as quickly as possible. It’s their job to spot what needs to be done to help the leaders and the team to reach company goals.
Related: Working for a Startup
Startup Tip 3: Clear Plan
The management team absolutely must clarify the plan for the company. What are the goals for the first month? How about goals for the second and third months? Without a clear plan, the startup is like a group of people showing up at a vacation spot with no idea what they want to do there.
After time has passed for a milestone, the company needs to assess whether the goal was met or missed. If the team fails to achieve the goal, such as having $1000 in sales for month 1, then the team needs to assess what could have gone wrong. What do they need to do differently? How could they improve?
When the team has a plan and clear goals, it’s easy to tell if they were on track with their goals or if they need to change direction to meet objectives.
Startup Tip 4: Established Culture
Establish company culture from the beginning. The management team leads by example in terms of how they treat others. When a team member works hard, do company leaders acknowledge that person’s contribution to the company?
Do company leaders take the time to get to know each team member personally? Do they know the names of a team member’s spouse, pet cat, or favourite ice cream flavour? Or does the startup staff only hear from management if they fail to complete a task?
When the company leaders set a positive and supportive environment, and not a negative one, then the entire team will also follow the example and support each other.
Startup Tip 5: Funding and Financing
How much runway does the startup have? Before getting into business, the founder will have looked for financing from various sources, including company stakeholders or board members. However, how long will the funding last before the startup can no longer afford to keep the lights on? Some companies may have as little as $25,000 to begin the founder’s dream.
The amount of funding will affect how much the startup has to invest in product development, customer fulfillment, marketing, and paying staff salaries. When the funding runs out, what plan does the startup have in place to keep the business going?
Startup Tip 6: Protecting Intellectual Property
Intellectual property is like a vital piece of the company that you cannot give up. Intellectual property could be what makes the company stand out from the competition and what makes its product one-of-a-kind. Having this information stolen would be like losing an arm or a heart.
One way to protect intellectual property is by asking all staff to sign contracts about the use and distribution of this information.
Startup Tip 7: Learning from Mentors and Brands
It is rare – perhaps non-existent – for a startup to be the only one of its kind in the marketplace. The startup could learn from successful companies in the same niche and award-winning brands in the same industry. How are these established companies finding and keeping customers? What is their strategy?
In addition to learning from successful companies, startup team members could learn from a mentor or two. This person has experience with startups and running companies in that industry and functions as an advisor whenever the startup team has questions about running the business.
Startup Tip 8: Networking and Promotion
Any member of the startup team can attend networking events to form relationships with business owners interested in their product or working with their startup. They can also attend events such as conferences and conventions to find opportunities to tell potential customers about their business.
Other ways to promote the startup include creating informative content about its purpose and products on its website and social media, and building relationships with industry leaders. For example, if the startup sells medical devices, they could reach out to leaders in the medical field to tell them about the startup and create awareness of what they have to offer.
Running a successful startup depends on many key factors, starting with strong leaders and a talented team. The first year, especially the first few months, will be difficult, with many decisions to make about even the simplest things, such as where the team should hold meetings.
Proper planning is important and expecting the unexpected is crucial. Success won’t happen overnight, but having a clear plan and goals are the first steps.
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