Founder 411: 4 Keys to Startup Success
Founding a startup is exhilarating. You’ve got a great idea, and you’re out to change the world—or your market– at least.
Once the initial rush of creativity and excitement wears off, though, building a business from scratch can feel overwhelming. Navigating leadership responsibilities, large-scale decisions, and a healthy work-life balance can be a nightmare without the proper organization and fundamentals.
When I first started at Smartshyp, they had four people running the entire company. The responsibilities were divided into the website, customer service, marketing, and then everything else.
No one was working under 40 hours.The vision for our small e-commerce company was there, the site was up and running, but we were missing the workforce. I soon realized that even though things were going well, there were more crucial initial steps that had been forgotten, leaving the company in disarray.
If you’re in this situation, these tips will help you organize and position your startup for success.
1. Do your research: If you know the direction to take your startup, you’re more likely to find success. Nirmala Reddy, writing at Forbes, shares that when you’re analyzing what opportunity exists for your business, you should “gather more data and facts associated with it before finalizing any decisions.” Take time to research your strategy decisions before you jump into business.
Define your customers. Will your business model target tech-savvy families or young adults right out of college? Or will you sell to businesses and other startups? Decide who you’re selling to, research how they shop, and use Google to see what questions they’re asking. Dan Shewan at WordStream writes, “Consumers rarely want to buy things for the sake of buying them – they want to solve their problems.” Use the info you’ve gathered to build out what benefits your product offers and what problems it solves for your customers.
Know your competition. Whether you’re selling office supplies or a new app, you need to know who you’ll be fighting for customers. According to Amy Biggart, writing in Conductor, both direct and indirect competitors determine what success you have in the market. Once you know what you’re up against, you can get creative with how you compete, like pivoting to customer loyalty if you won’t always have the cheapest price.
2. Get your finances in order: Keeping accurate books and having a picture of where your startup’s money is going and will go in the future is critical. According to Miriam Caldwell, writing in The Balance, a financial plan helps you with long- and short-term goals and lets you “set yourself up to win financially by really managing your money.”
Hire an accountant. Whether you bring one on full time or outsource, pay a professional to handle your financials and let them do their job. At , the Entrepreneurs’ Organization advises that hiring an accountant may be cheaper for your business. Sit down with your accountant, assess your startup’s current financial situation, and hash out a plan for where your money will go. Then stick to the budget! Having someone with the proper training and industry knowledge can help keep your startup running smoothly from the start.
Line up your funding. You know the saying: it takes money to make money. When just starting out, it can be tough to know where your money is coming from. Some options include self-funding, venture capital, and bank financing. If you’re going for venture capital, consider hiring an attorney that specializes in dealing with firms. If you’re going to the bank, make sure you’ve done your market research and have thorough projections (your accountant can help here). Ben Ruthi at NerdWallet advises that lenders want to review a “full financial profile” before giving approval.
3. Assemble your staff: Don’t just hire the first positions that come to mind—plan which positions and qualities will help your startup grow.
Fill essential roles first. Skye Schooley at Business News Daily recommends hiring lead positions like managers for sales, marketing, technology, and finances. If you need more positions but aren’t ready to hire employees full-time, Schooley also recommends outsourcing to freelancers until you can hire them in-house.
Look for reliability and flexibility. Knowing you can count on the staff you have is important. According to Vinil Ramdev, writing in Entrepreneur, startups should hire employees who are flexible: “An employee who believes that he should only do tasks related to his job description may not be an ideal fit for a startup. Unexpected changes are part of the game.” Help your new hires find success by making sure they know up front if they’re expected to jump across different responsibilities.
4. Use the right tools for the job: Building a business means having the proper services and tools in place to make your startup much easier to run.
Reliable internet. You can have all the genius ideas and productive staff in the world, but if you can’t get online there’s not much you can do with them. Catherine McNally at HighSpeedInternet writes that what speed you need for your small business “depends on how many employees use the internet at a given time and what kinds of activities they use the internet for.” For example, McNally recommends if you have five to ten employees who typically share large files, look for between 50 and 75 Mbps for your internet speed.
Budget for tech. Tech problems can be frustrating and possibly affect employee morale. When choosing computers and other tech, don’t skimp on quality. At , John Boitnott says, “Investment in new tech demonstrates that you are invested in employee success,” and you should “pick technology that lets employees spend less time on tasks that can be automated.” Those early tech investments might go a long way to save your employees time and effort.
Whether you’re just dipping your toes into the startup waters or you’re a serial entrepreneur with several successful businesses under your belt, staying on top of organization is crucial to success. Knowing you’ve got all your ducks in a row can give you the confidence and freedom to focus on your big ideas.
About The Author
Jeannie is a recent graduate of Brigham Young University, graduating with a Bachelor of Science in Sociology. In her studies, she emphasized women's issues and education as a mitigating factor for socioeconomic status.