February 12, 2019
The Do’s and Don’ts of Running a Startup Company
Share This Post
Starting up a new business and taking it from rags to riches seems to be on the agenda of every new entrepreneur today. The dream of making millions from an idea that you had one Sunday morning when walking the dog is exciting and promising. The market is full of such successful models and there even seems to be enough room for more. So, is running a startup company that easy?
In my experience with two of my own startups and as a consultant, I have seen numerous blueprints of potentially successful businesses that ended up in the trash bin. Most of these enterprises never made it big because they failed to understand the do’s and don’ts of running a startup company. You see, even if you have a million-dollar idea, you still need to apply some basic business rules to ensure its success. Here are just a few of the major ones (many a hard-learned lesson) – but there are indeed many more:
One of the leading factors that bring startup companies to their knees is the lack of financial forecasting. Opening a business involves more capital than the initial investment. You need to plan months ahead into the enterprise’s activity and try to foresee any risk of potential damage for your company’s finances. You would be surprised how many companies I work with that don’t even have an operating budget and it amazes me how they made it as far as they did!
Just because you start your business in the same garage as Steve Jobs did decades ago it does not mean that you will enjoy the same success. Copying a large company’s tactics usually ends in bitter failure. Instead, you should focus on your resources, the human capital that you can attract and the immediate possible evolution of your enterprise.
After spending enough time in the world of business I have identified flexibility as a crucial ingredient in any recipe for success. You need to keep an open mind and evaluate your opportunities for investment as they come, regardless of their nature. Very soon, you can see your company gaining capital and recognition doing something completely different from what you had imagined at its genesis.
Too many entrepreneurs enter the business dreaming of becoming multi-millionaires overnight. While it's not a bad thing to aim high, it is also important not to forget your reasons for being on that road. You should never discard your passion for financial benefit. If things will turn sour, that enthusiasm will fuel your ambition for going further.
If this is the first time you take command of a startup company, it is better to be something that you already know how to do. Flexibility is a key for success, but expertise can save you time, resources and energy especially in the first stages of your enterprise. If you have a tight budget, you will need to wear a lot of hats and you likely will not be able to afford a full staff of highly-paid experts or folks with years of experience in the field. You will be rolling up your sleeves so make sure you know how to do it.
Connections are crucial for every startup company owner. When you first open your business the people that you know in the industry are essential for your growth. As you develop your brand recognition and financial capital you should keep networking with the same eagerness of your early days. This strategy will keep you open for new opportunities, customers and talented employees that make their way into the market.
Great talent is difficult to find for every startup company owner, and especially for new entrepreneurs. If you get the chance to stumble upon some diamonds in the rough, do not hesitate to hire them and treat them rightly. The professional headhunters are always on the lookout for wonderkid employees, and it would be a shame to lose your best workers to large companies before you even get your business off the ground. Find the balance between money and loyalty and consider them having a stake in the business. If they see a financial reward on the back end, they may be more flexible with you on pay at the beginning and have a vested interested in the operation’s success.
On the other hand, you must keep an objective assessment of your employees. Spoiling them too much or praising them for banal achievements can severely damage your company’s fortunes. In time, you become emotionally attached to mediocre workers and keep them in positions where new, talented employees would excel. Employees are not your friends. I have broken my own rule on occasion but there was a clear understanding that business is business and if I put my foot in your backside once in a while – it is forgotten when tipping back a cold one outside of work hours. Many people can’t do that.
Many entrepreneurs running startup companies have the false belief of being able to cover every position in the office. While nobody is debating your multitasking abilities, you should consider delegating your tasks to your partners or employees. This practice enables problem-solving from different perspectives and allows you to focus only on the most important parts of your strategy. So, when I spoke of wearing multiple hats, that doesn’t mean you have to do everything, so delegate what makes sense not to waste your time doing.
Last, but not least, you should not let early failures intimidate you. It is quite common for most new business owners to stumble in the beginning. What is important is how you keep from falling and what you learn from it. And – don’t make the same mistake twice. Remember that the definition of insanity is doing the same thing over and over, expecting a different result. It is crucial that you keep your optimism and focus on your goals even if the boat catches a bit of water after leaving the shore.
Share This Post