Many people dream of starting their own business and being their own boss. No attending mind-numbing meetings, no being glued at the desk, no answering bothersome phone calls, no writing boring reports in a thankless corporate job. Instead, creativity, freedom and independence await you at your own start-up. Nowadays, launching your own business might seem even easier with crowdfunding platforms like Kickstarter or Indiegogo, which allow you to get funding from peers rather than from banks and other credit institutions.
Not so fast. Launching your own start-up requires immense effort and savviness, and is not as easy as the abundance of crowdfunding campaigns in your Facebook newsfeed might suggest. First of all, there is no guarantee that your business is going to be successful, regardless of how organized, experienced or hard working you are. While being your own boss comes with great rewards, it also harbors huge risks. Yet, you can minimize them and increase your chances of success if you follow a few guidelines.
Below, you will find the eight most important things you must know when launching a start-up.
1. Who is the competition in your field
This may sound like a no-brainer, but you should really find out as much as possible about the industry you wish to work in and who your competition is. Not only do you need to know who you’re up against, but you also want to know how your competitors operate, what makes them successful, and what you can learn from them. Most importantly, you should think about how you can stand out and what makes your business different.
2. A good idea is not enough
As innovative and groundbreaking as your idea might be, that alone won’t keep your business afloat. For example, famous inventor Nikola Tesla, who invented fluorescent lighting, the Tesla induction motor and the Tesla coil among other things, and is credited with the invention of modern radio, died impoverished and in debt. You’ve got to know how to implement and market your idea in order to profit from it.
3. Choose the right partners
Depending on the kind of business you’re launching, it can be wise to partner up with somebody, especially if you lack connections and funding. A partner who knows the right people or has access to funds will make your life as a self-starter much easier. However, you do want to make sure that this person is trustworthy, especially if you don’t know them for long, as you have to protect yourself and your assets. You may consider conducting a background check through services like Instant Checkmate to learn about arrest records, fraud or embezzlement chargers.
4. It will be hard to get funding
No matter how inspired by crowdfunding stories you may be, people will be reluctant to give you money. Certain kinds of start-ups are regarded as better risks than others. Banks and other more conventional institutions are, for example, hesitant about loaning money to retail or service start-ups. While business grants are generally difficult to obtain, they’re particularly scarce for start-ups. Check local, state and federal loans, as well as private investors like foundations, if your business is suitable. Consult a financial advisor or join workshops to find out about further funding options.
5. Keep your day job
Unless you have ample resources, you should not quit your day job under any circumstances during the early stages of your new business. You need to realize that most likely, you won’t be making any money right away. It is not uncommon that you will actually be indebted during your first year, and that you can be happy if you’re breaking even. Many people won’t make enough from their start-up to pay their personal monthly bills for a year or even longer. Be prepared to invest extra morning, night and weekend hours into getting your new business off the ground.
6. Plan, plan, and plan some more
A recipe for disaster is a seat of the pants approach to launching your start-up. Make a detailed, extensive checklist (you can find a myriad of examples online) and follow it meticulously. Don’t skip steps because they’re tedious. The more grunt work you’ve done, the more likely you will have success later. It’s highly recommendable to write a business plan, especially if you apply for loans. In addition, familiarize yourself with registration requirements, tax laws, insurance policies and other regulations associated with starting a business. Visiting an accountant is highly recommended.
7. You will never have enough expertise
When you run your own business, it feels like you’re doing a dozen jobs at once. You’re a CEO, a bookkeeper, an accountant, a receptionist, a social media manager, and many more at the same time. You might be very enthusiastic and think you can multitask everything, but the truth is that most people can only do two or maybe three things well at one time. You should focus on your major responsibilities and strengths and outsource everything that doesn’t need your constant involvement or that you’re simply not very good at. This will help you streamline your business as well.
8. Be a salesperson
Whether you like it or not, you’re the salesperson of your start-up. While you might not be cold calling, giving sales presentations, updating social media profiles or dealing with customers all the time, you’re certainly the face of your company. You oversee the marketing efforts and are responsible for the marketing strategy. This also means you should be able to advertise your business and attract potential investors/clients at any time. Think about how you’d describe what you do in two or three sentences.
Launching your own start-up can be very daunting. It takes a lot of time, money, and stamina to take off and start your own business. However, if you inform yourself, plan ahead, and get necessary assistance, your chances of success will increase immensely.