Business Startup Essentials
Putting the Puzzle Together
Business Startup Essentials: Every business startup is based on its own special business model and value proposition. At the same time, every startup like any other business, has a range of functions to fulfill—pieces of the puzzle that have to fit together in a meaningful way.
For startups and early-stage businesses, the names of those functions are pretty much the same as those in established companies, even if there is no actual department doing the work. Even a one-person startup has to take care of them all. As the business grows, the founder’s job will become split and people will be recruited for each specialist function.
The essential business functions are:
The bad news is that you need to think about all six from the start But the good news is that you each essential function will not need to be perfect before opening for business. The reality is that you will start as best you can—learning very quickly how to do better.
If you have been thinking about starting a business, you will have come across the term ‘Business Plan’. Whether it is a full-blown 50-page document full of fancy charts, well-researched statistics and detailed financials, and accompanied by slick Power Point visuals—or the scribbles on the back of a dog-eared envelope, you need a plan.
But, do not confuse the map for the territory. Too many eager entrepreneurs have spent months crafting an exquisite business plan and wonder why they never managed to get the business idea off the ground. They may have simply wasted months of toil and missed sales. A half-completed business plan with a flow of revenue will win every time. Read more on business startup planning…
You may be wondering why I put selling before marketing. I hear you say that it must be the other way around. Of course you need to have a marketing focus. That will have been part of the business model and the value proposition that you conceived when you were getting started. Your marketing and brand strategy must be clear to you, even if not written down in a formal marketing plan.
But with no sales coming in all you are going to be doing is draining cash. As the venture capitalists say your ‘burn rate’ will likely put you in a fizzling rocket category before take off. Sales are undoubtedly your best form of financing. Managing your cash flow means being parsimonious with your expenditure, but whatever funds you have, they need topping up with revenue. Read more on selling from Day 1 of your startup…
You have heard that marketing is all about the 4 ‘Ps’: Product, Price, Place and Promotion—what, how much, where and how. It is and rather a lot more besides. First you will have defined your target market and then you will have started to create your brand.
Don’t be blinded and think that all four ‘P’ boxes have to be filled in. What’s more important than anything these days, is to be engaged with your customers—by every means available. There are lots and above all: right near you in your own locality and spread all over the globe via the Internet. Don’t miss opportunities for dialog: listen as well as tell.
In a startup business, the brand will be an aggregate of all the company’s behaviors, not just the product or service. You will be building reputation from day one. You should see marketing as a process, not just a series of actions. You will have sensed what value your customers seek and ultimately you will seek to deliver on that value and aim to keep delivering as the business develops. Read more on startup marketing…
The essential you know all about. You are likely to say you do not have enough of it. But lack of finance halts very few startups in their tracks. Complex technology ventures or high capital intensity projects, maybe. For most of us it is the way that we finance that is critical—and, of course, the way we spend our funds.
You almost certainly have your shirt on now—and wisely so. Do not risk losing it.
The key is to work out how little money you need, rather than how much money you want. There are many creative ways of financing the business and you will be wise to ‘bootstrap’.
Bootstrapping is the way to go, especially in a period of tight money. In any case, even the super successful startups in the Inc. Magazine ‘Inc 500′ are self-financed to an overwhelming degree (over 80 per cent). Read more on startup financing…
You may think that once you open for business, you just do it. Getting organized both as a business and personally requires careful and deliberate thought. For example, there are things that only you can do, but there are others which will be much better done by others inside or outside the new venture.
If you are going to register your business as a company, don’t simply go for an LLC as a matter of course. there are several corporate forms that may be much more appropriate.
Figuring out the best way to carry out work or manage teams is tough to do and it’s too easy to set about them without any preparation. Read more about organizing new ventures…
Leading Your Startup
First of all as an entrepreneur, you must lead from the inside and manage with a strong reliance on your intuition. Of course, this has to be balanced by dated-backed pragmatism.
When you start a business, you may not spend time reflecting on an appropriate style of leadership–you just lead, but you will find some styles much more appropriate than others. Read more about leading startups…