The Checklist that every Startup Founder needs
Running a startup opens the founder up to a combination of many feelings and experiences. From fear and uncertainty to enthusiasm and hope, a founder is bound to undergo a rollercoaster of emotions. While all of these are important and play a significant role in the journey to building your business, real, sustainable success is a function of many other ingredients.
Other factors such as the core business idea, value proposition, potential market size, and execution strategy are central to growth and success. No doubt, the challenges and rough terrain will have their heydays but having the essentials sorted can help your business start on a solid foundation.
A business may run on an idea at the initial phase but as the days roll into months and years subsequently, there’s more to keeping your brand alive. In exchange for the product or service your business provides, you want to realize some profit, so that the business becomes self-sustaining, income-generating and is able to cater to the operational costs required for smooth management. And so, the following are five important considerations you want to take note of as you begin the journey:
1. The viability of your idea: While it is true that execution gives wings to your ideas, any fundamental faults to your idea would be detrimental to your business in the long run. It is your business’ viability that determines long-term survival and sustainable profitability. However, this is highly dependent on your understanding of your unique selling point and existing customer base. A viable idea will fulfil the following criteria (and many others not mentioned here):
- Will you personally use your product?
- Is your target market big enough to create a real business out of it?
- Does your product offer any exclusivity or uniqueness that makes it different from competing brands?
- How soon can you scale your product/service?
- What are the long-term goals and projections have you set?
A good way to test the viability is to ask what people want. Your customers are the ones you exist to serve, so get their opinions through polls, surveys or any other means to know what the market expects and what they are willing to pay for.
2. Finance (Equity, Budget, Valuation & More): If equity is like a slice of pizza, then finance is the whole box put together. Equity refers to partial ownership or shareholding rights that allow the holder to enjoy the potential profits and value accrued by a company. Depending on what method you choose to go for funding (bootstrapping, venture capitalists and angel investors, money is a necessary resource in the facilitation of product building, testing and everything that goes into the development phase. Especially if you are going through the exterior funding route, equity will become a regular term in the vocabulary of your business. But apart from investors, startups have more recently resorted to giving co-founders and employees equity in exchange for the expertise they bring to helping the company grow. In the case of corporations, board members may also alternatively be paid in stocks rather than with cash. So, this is an important aspect of your business and you want to formulate a division strategy that ensures each player is well remunerated as much as the business can accommodate. As per budgeting, you want to categorize all cost implications and track the inflow and outflow of money. Again, you want to consider your exit value, which is the financial consideration given to a startup, or private business, should a change be required for its ownership structure, that is if you want to sell the business. Ultimately, being financially smart and strategic builds the credibility that enhances your success rate.
3. Leverage relationships/partnerships: What’s better than one person driven by a clear and vigorous goal? A team of more ambitious and committed hands! Instead of seeing partnerships as a cut in the founder equity allocated to you, think of it as a value exchange for the skill sets they bring to the table. Moreover, solo founders often pose a high-risk threat to potential investors who want to see not just the creativity behind the idea but also the dexterity that goes into implementation, planning and execution. To add to this point, in the early stages, you’ll need to get insight from those who have walked the same road you are on. While it is understandable that you want to keep your ideas to your chest for fear of idea theft, it really helps when you find trusted parties with whom you can share your ideas. Not only will they help you with honest feedback to boost improvement, but you can be spared the misfortune of making needless mistakes.
4. Chart out a distribution plan: Your end-user or customer is your target, but sometimes, you may need to reach them through a channel of middlemen. As such, you want to make a list of potential suppliers and distribution partners. This is often one of the most common challenges new business owners face as they get started, like a harsh reality they have to grapple with without prior notice. This is especially relating to a product-centred business, although service-based businesses may also require some form of distribution. Today, the internet offers a wide range of options with directory listings where you can access suppliers and distributors who redistribute your product type in large quantities. You can also source stockists based on criteria such as niche, location, B2B marketplaces, professional hubs, etc. Remember, whichever one you opt for should contain a substantial amount of people within your primary or secondary target market.
In conclusion, the ingredients for a successful and thriving business are multidimensional. They are all of these tips listed above and more! Think of it as having a concrete strategy yet being flexible to incorporate new things on the way as you go along. Leave room for growth, foolproof your idea, and expect mistakes, but be quick to work on them. Be open-minded in accepting feedback. Ultimately, the health of your business is what you want to make your top priority.