12 Startup tips for first-time founders
Entrepreneurs are saddled with the responsibility of designing and creating solutions that meet their target audiences' needs. The process is filled with twists and turns, sometimes expected and unexpected realities. If you are nurturing the idea of getting into the entrepreneurial space, consider these insider tips from my experience with various business ideas and my journey through RedViolet Company.
There are five categories of people in the entrepreneurial world, namely:
Those that aspire to be entrepreneurs but are saddled with excuses and fears that they never step into it.
Those start but fail before they launch.
Those that regress or fail after they've achieved some form of traction.
A small percentage starts but doesn't scale.
The few that scale and reach the status of unicorns.
Which category do you want to be in?
The fifth, right? I have compiled a list of tips you need to equip yourself with to launch your startup into a successful business.
1. Transcend and Start
Fears. Excuses. Procrastination. You need to transcend them and start somewhere. Otherwise, your new idea is going nowhere. Suppose you can't even convince yourself that you have the potential to nurture your startup idea to success. How would you buy the interest of potential investors, partners, and customers to share in your vision? Food for thought.
2. Be a Solution
Please don't invest in that idea just because you think it's cool or feel it's the next cool thing to do. First, understand the business behind your vision and the potential business models. Research the addressable market. Who are your customers, how much are they willing to pay, are your competitors offering the same product or service, and what's your unique selling proposition? Other questions you should ask yourself are;
What problem will my startup solve?
What needs will it meet?
What unique value will it add to people's lives?
Are people want to pay for it, and how much?
Who are the people that will pay for it?
Are they any barriers to entry? If yes, what are they?
3. Small and Simple Is Wise
Like many entrepreneurs, you probably have ideas of multiple potential features and directions your new startup could have and go. Now watch out. Don't get too carried away in your brilliance that you give birth to an unmanageable, cost-ineffective, convoluted business or end product nobody wants to buy.
Start small and simple. Test the concept behind your idea by creating a minimally viable version. This is also called a minimum viable product (MVP). Once you can validate that customers would pay for your MVP, you have a proof of concept and can inject new features as your business grows.
4. Passion and Wisdom Are Couples
In the words of Thomas J. Watson, "To be successful in business, you have to have your heart in your business and your business in your heart." Love what you do, cherish it, and live it. Passion energises and compels you to keep going when challenges come rearing their ugly heads. Learn to tame your passion with wisdom. While it can fuel your progress, knowledge guides you in the right direction, and wisdom knows when and where to turn.
5. Always Listen
Listening, in this case, is both literal and figurative. In other words, be like a sponge. Learn always to absorb information. Talk to people who care about your startup, friends and family, experts, consumers or users of similar solutions. Read books. Attend seminars and webinars. Read body language while talking to people about your business. Learn from your mistakes as well as others. Soak up knowledge every step of the way. You need information at every phase of your business, but you must also learn to sift them properly.
The correct information can help you with;
Identifying your competition
Analysing and preparing your strategy
Identifying your target market
Identifying your pricing model
Identifying trends within your target market
Understanding your customers' needs
Setting short, medium, and long-term goals
6. Filter and Adapt
The last thing you want to do is to inject misinformation and misconceptions into your business. Absorbing information is one thing; filtering away the trash and adapting to trends is another. Things change. The reality is that the world has become more dynamic by the day. And some information becomes outdated and useless faster. The key is to be open-minded. Approach change with an open mind and adapt as quickly as possible.
7. You Are Not an Island
One major pitfall of becoming an entrepreneur is trying to do everything yourself, which translates to many responsibilities that bring your business down. Every entrepreneur needs help. In the case of first-timers, getting help becomes exceptionally vital. I will first suggest 'never walk alone', find a co-founder with similar passion and ensure they represent some of your gaps. Help can also come from an employee, which you may not be able t afford at the beginning, using volunteers and interns. You will need moral support, a lot of it, usually from friends and family, your advocates. Draw inspiration from people, get a mentor and let me also add financial support. The key is understanding where and why you need help and surrounding yourself with people who can provide that support at every step. The journey, however rewarding, can be draining.
8. What About Legal Requirements
Laws aren't fun, but it pays to understand the rules surrounding starting and running a business in your primary location. You could face ugly penalties should you fail to adhere to government regulations. For instance, some of the legal principles you need to pay attention to pertain to:
Forming a legal structure
Registering your business with your state
Setting up an accounting system
Following employer laws
Taking care of business-specific tax liabilities and more.
Consult a corporate lawyer or accountant for advice. This may very well save you some legal headaches in the future.
9. Project the Costs
As you flesh out your startup idea, remember to factor in how much the venture will cost — that is, every business expense from development to operation. These include location and rental costs, supplies, and marketing. It's essential to treat your capital as someone elses' money, even when it is yours; that way, you are more accountable to it. Separate your personal needs. Understanding your costs and getting a hand on them from the beginning is better than allowing them to drain your capital.
10. Business Financing
Get a grasp of business financing. This is probably the primary reason many startups fail. No one wants to give their money to you without some traction, except for angel investors and your family and friends who are betting on you at that very early stage. It is crucial to understand how you intend to fundraise your idea. There are many approaches through which you can fundraise, such as Angel (seed or private) investors, venture capitalists, loans from traditional banks, equity financing, bootstrapping, grants and many more. Most importantly, it is imperative to understand how each method can help you through various stages in your journey.
11. Earn as You Build
It takes time for a new business to pull in a steady income. Hence, savvy first-time entrepreneur would keep their day job while they develop their startup idea. That way, you will have an income source to support your expenses and businesses''. Plus, you have something to fall back on if your startup fails, work against it, but be open to it. With time, as your startup becomes steady, you transition from an employee to a full-time entrepreneur.
12. Fail Fast and Fail Forward
Every entrepreneur must understand and adopt a mindset that encourages failure. There are quite a handful of uncertainties in the terrain. You must see failure as a learning process, and resilience is an attribute that will help you. Fail fast, learn from the experience and move forward. This is a primary key to innovation; by now, you know it's either your business innovates or dies!
These are not hard and fast rules for starting, and they are my opinion and advice to first-time entrepreneurs based on my personal experience. I wish you all the best with your new venture. If you have more to add, please add them in the comment section.