Top 10 tips for startups
BEFORE YOU EVEN START PLANNING YOUR BUSINESS, MAKE SURE YOU HAVE THE MOTIVATION, PASSION AND COMMITMENT. THE TIPS HERE ARE FOR CREATING A REAL BUSINESS, NOT CREATING A JOB FOR YOURSELF (A BUSINESS CONTINUES TO EARN MONEY EVEN WHEN YOU ARE NOT ACTIVE IN IT, WHILE CLEARLY A JOB DOES NOT). TREAT THE TIPS AS A CHECKLIST.
1 – Be professional and lead from the get-go
It’s not a hobby anymore. You now represent a business and it’s your opportunity to do your life’s best work. Everything about you and your startup needs to let people know that you are 150% committed to running a serious business. Your pitch, your story (your why) and the culture you create needs to be compelling. Whether you’re the founder or leading a team, how successful you are will come down to your ability to lead and unify people around a common purpose.
2 – Have a plan based on product market fit
Even if your plan or business model canvas is just one page – write it down. This will help clarify your objectives, goals, milestones, value proposition and will help you differentiate yourself from competitors. Do the necessary research and don’t keep your plan top secret – ideas are cheap. You need to action the ideas to create value and scale to achieve success.
3 – Apply for your ABN and business name
You’ll need an ABN (Australian Business Number) to run your business. It’s used for various tax and business purposes like claiming GST credits and confirming your business identity when ordering and invoicing. Applying for an ABN is free. Your business name or trading name is the name you use to run your business. While it’s not compulsory to register a business name, if you’re a sole trader or partnership and want to trade as something like Mic’s Lab, you’ll need to register it. It’s also a good idea to check if your preferred business name is available as a web address and social media profiles.
4 – Secure customers and sales early
Make sure there is an authentic connection between you and the problem you are trying to solve. Do a lean, minimal viable product and test it out on potential customers and friends. Secure early adopters, customers, testimonials and revenue asap so your business can survive then thrive. Cash is king because until you collect the cash, you’ve not made a sale. Without sales, your cash flow is going in the wrong direction. Customers are your most important asset, so understand how to find and keep them (and your legal obligations when marketing and selling products and services to them). Really define the problem you are solving and who you are targeting: age, education level, income group. Understand purchase patterns and motives, then define how they will benefit from your product. Then look at positioning your product to maximize those benefits and price your product accordingly. In sales you sell to two key emotions FEAR and GREED.
5 – Get it right the first time
Get the structure, legal and tax issues right the first time. It’s much more difficult and expensive to unsnarl a mess afterward. Learn what your legal and tax responsibilities are before you start your business and operate accordingly. There are four types of business structures – sole trader, partnership, company and trust. There are advantages and disadvantages for each structure, so investigate each option carefully. Having the correct registrations, licences and permits is crucial. You also need to consider registering a name for your website and insurance issues i.e. insuring your commercial risk and getting workers’ compensation for any employees, etc.
6 – Don’t be a lone wolf
Get a business mentor and the right team. We all have blind spots and having a trusted mentor with deep knowledge and experience will help get you through the startup journey. Know your strengths and weaknesses and surround yourself with the team you need to make the business successful.
7 – Get action oriented
Time is precious – you’re your own boss now, but you will need to be disciplined. Success will depend on your own merits – think for yourself but also access great advice and remember, slow decisions will probably mean you miss out. Be ready to pivot if you need to, have Plan B ready in case the worst scenario happens and expect the unexpected.
8 – Get the money lined up
Get the money lined up and dilute if you need to. The best startup capital comes from customers (and some grants,) however, if you need investment to grow your business, you need to be investment ready. Set aside time to secure the capital (it usually takes three times longer than you expect). You must be prepared for rejection and to share the risks and rewards. There are many options so get professional advice and remember a smaller percentage of something funded is worth a lot more than 100% of something that’s not. If investors don’t say yes, move on. Be prepared to lose 30 per cent equity if you’re inexperienced and 10 per cent if you’re not.
9 – Be realistic
Be prepared to aim high, defy logic and lose your social life (at least temporarily). Startup businesses are often fun and exciting however they demand commitment and persistence to beat the resistance. You will need to put in long hours and lots of them to make the business work – it is certainly not a 9 to 5 proposition.
10 – Be passionate
Enjoy the journey – it obviously helps if you do what you love. You’re going to devote a lot of time and energy to starting a business and building it into a successful enterprise, so it’s really important that you truly enjoy what you do… for the medium-term anyway.
Chief Executive Officer