Starting a new business is analogous to sailing to an unknown destination. Many atimes we are immersed solely on how to get there quickely. Sailing requires vision, road map, team, route awareness and etc. Seldom do we bother about what's along the way-length of journey, storm, wind, logistics and etc. In as much as it could lead to an exotic experience of sucess and learning, starting up may bring about unprecedented outcomes of failure. I'll put aside the philosophy of sailing and get myself right down to imparting experiential reflection-of sailing in not just one but many of my endviours-as a founder, student, employee and advisor of "IT and services" startups. Coming up, I've summarized 10 relevant action points that we need to take in to account in the course of moving on with a new business idea.
1)Data driven marketing
Long gone are the days when you could say anything and all will be taken for granted. That marketing is only about saying empty "Words" or "Statements" or "Compound complex statements " to anybody. First, define your customers or the need for your product/servcies through an in depth consumer analysis.
-Quantify as to how big is the market for your product/ services through descriptive and prescriptive market analysis.
-Understand and benchmark your competitors. Analyze the main players as well as the entrants.
-Edify your distribution channels. Analyze as to how you will get your product/services to customers.
-Identify and structure the commission plan across different intermediaries.
-Develop your marketing action plan. Plan as to how you will get the word out across different demographic segmentations, prices, promotion and products. Quantify and iterate the plan. You are highly advised to have a marketing partner.
2) Startup Ethics While you may well be geninley interested in making difference through your business, you may obliviously violate a series of industry specific standards and ethics of operation. Subsequently, it's important that you take time for ethical need awareness and of listing all the possible ethical implications of your idea or startup. Carry out a holistic stakeholder analysis with regard to the possible impact that your product or service may have. Where possible, use a stakeholder mapping strategy frameworks. Furthermore; consult a lawyer or partner with one.
3)Startup Accounting Document what is own by the team regularly. Determine liabilities and equities of the team. Define as to how member’s equity will mature or fade out across time, skill and contribution to the team. Avoid cooking the book yourself as it’s smarter to partner with an accounting firm.
In early stage startups, you are in a constant challenge of finding the right team members as well as ensuring that your team stays as cohesive as possible. Play a group game. Spend time out with your team members so you know, understand and relate with each other better. The more you know each other, the easier it becomes to establish a casual depiction of circumstances and manage behavioral challenges and resources. The more you know each-other the less your perception and relationships among would be based on one sided small talk gossips, hearsay or just a subjective impression. Develop and nurture an open working environment. Get everyone in the team feel important and responsible. Avoid false hierarchies and strong boundaries.
5)Quantitative Analysis Quantify the present and future predictions of your business model. Operation costs, assets, liabilities and equities should be accounted. Where possible use Decision three, Cash flow analysis, Revenue metrics and Regression analysis and forecasting. While you can’t be 100 % sure about your quantification, quantified big picture helps design a reliable strategy.
6)Startup Finance How do you value your stocks? How are you going to divide among? How are you offering stocks to an investor? How are you going to pay employee anew? What happens when a shareholder leaves a startup? How must you divide revenue? How should you arrange a safe stock ? How will you mitigate flooding dilution? How should you exit?
7)Startup Operation Deals with the process by which a product or service is produced. This is where the need for being well versed in the art of the big picture -Project/Product management - would come in to play. Don’t over promise and under-deliver. Nor over plan and early deliver. Your ability to analyze your methods, manpower, technology and skill set will help you understand, plan and build your capacity. Schedule and metricize minor details as well as big pictures of activities. Maintain quality and industry specific standards.
8)Startup Economics Understand the demand for what you are striving to supply. Make sure you aren’t envisioning to supply what’s surplus. Make sure you aren’t supplying what’s in demand only for a short period of time. Make sure you are not building business structures for products or services that will play out only for a short period of time. Make sure that you aren't building a business that entrants can easily copy-play and thrive on. Check and balance supply Vs demand through time, geography and competition multi-variates.
9)Startup Strategy This is a very important aspect of your Startup. This is the stage that entails the make or the break moment of your your vision.
While strategy is a broad term, it’s divided in to three key categories: - functional, business and corporate strategies.
Functional: - Lowering operational costs and deploying the most effective business process.
Business: - Includes but not limited to your solid plan in competing in the industry you operate in.
Corporate/Startup Strategy: - You decide as to what kind of business you are. What would you like to be? Then again, why?
"The essence of strategy is choosing what not to do. Strategy is about making choices, trade-offs; it's about deliberately choosing to be different. The best CEOs I know are teachers, and at the core of what they teach is strategy " Michael Porter- Father of strategy
The Five Forces Theory of industry Structure, which was formulated by Michael Porter of Harvard suggests Substitutes, Competitors, Buyers, Entrants and Suppliers are an important factor in determining your Startups strategy.
Substitutes : Is your product or service easily replicable or replaceable?
New entrants : How likely is the threat of a new entrant getting in to your business.
Suppliers : How important is the collective bargaining power of suppliers
Buyers : How important is the collective bargaining power of buyers.
Competitors :How is the level of rivalry among existing firms and entrants.
Once you have brainstormed on the five forces, you can easily formulate the survival and growth strategies for your Startup.
Cost leadership: Deploying the lowest cost possible for the process, team cohesion and supply chain of your products and services.
Differentiation :Getting your product or services as unique as possible.
Focus : Solidifying on a market niche, a geographical area or a flagship.
10) Ponder the points you walked through .
Up-next:- Take out a piece of paper and brainstorm on your/ your teams contemplation of each section.
Up-next:- Take out a piece of paper and brainstorm on your/ your teams contemplation of each minute.
Mikael Argaw is the humble founder of http://www.entrepreneursinfinland.net. He has a background in IT as well as PM . Integrating with his ongoing further studies, initiatives, projects and as a hobby, Michael enjoys reading on technology, PM, Business Intelligence, Entrepreneurship, Education, Business development, and current issues. Michael is available for independent consultation - firstname.lastname@example.org
"Striving to stir positive ideas on the meeting table, blogs and groups"