What to Know Before Starting a Startup
Posted by Rachel Hyun Kim on March 21, 2012 in Business Start Up Advice [ 3 Comments ]
Many individuals dream of shunning the corporate or career path in order to live through the entrepreneur lifestyle. These individuals aspire to become entrepreneurs, and create a business that will allow them to live a self-employed life. However, the lack of prior preparations can turn a startup into a stressful experience for the budding entrepreneur. People delve into their startup by writing code or creating a product, without fully formulating a business plan. In order to increase the chances of a successful business, it is vital that entrepreneurs understand all the risks and rewards that go with starting a startup.
5 Tips for the Budding Entrepreneur
Creating a startup without prior preparation or knowledge is a risky move, and can doom the entrepreneur to failure. The following are important tips to consider before starting a business:
One of the major concerns of an entrepreneur is money, and whether they have enough capital to start the business. Oftentimes, entrepreneurs rely on bootstrapping or the “three F’s” – family, friends, and fools – in order to build up starting capital. They also have the option to take out small business loans and other forms of borrowed cash. However, the main point to takeaway is whether the entrepreneur is ready to embrace the startup lifestyle. Bootstrapping is more than gathering and saving money – it is a lean business strategy that forces the entrepreneur to quickly reevaluate his or her values. If the individual is prepared to devote all their time and energy into a startup, he or she may want to reconsider starting a business.
2. Choose a Team Carefully
Do you have potential team members in mind? Any particular individuals that would make a great asset to your business? Unless you are creating a one-man operation, it is vitally important that the fledging business carefully choose its employees. Because of the startup’s small size in the beginning stages, every single employee makes a major impact on the progress of the business. Before starting, it is critical that the entrepreneur fully understand the ideal employee profile in relations to the needs of the business.
3. Understand the Service or Product
Perhaps you have the next great idea, website, or service that will allow you to make millions. However, the entrepreneur must understand every single aspect about their product in order to achieve that goal. What is the target audience and the ideal customer for your product? Does the product fit a particular target or niche? In order to start a business, the entrepreneur should consider every facet related to their service or product.
4. Create a Plan
Before starting a business, it is important that the individual makes the necessary preparations and consider possible scenarios. It can be easy to get caught up in the excitement of starting a business. However, without a strategic plan, the entrepreneur may find him or herself unprepared to handle unexpected situations. A business plan is not helps formulate a goal and vision, it allows the entrepreneur to organize his or her thoughts and create a long-term strategy.
5. Don’t Be Afraid of Failure
Oftentimes, it’s hard for individuals to accept or move on from failure. We’ve grown up in a society where individuals are handicapped by a fear of failure, and the criticism and rejection associated with failure. However, entrepreneurs need to understand that they will frequently encounter both small and large moments of failure. The challenge is whether the entrepreneur is able to learn from their mistakes, and apply the lessons for their next endeavor.
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