Some businesses take off to a quick start, and easily (so it seems) find the investors and customers that they need to grow. Others, not so lucky, struggle to establish their place in the market.
I have been involved in a number of start-ups, yet, I find that there’s still much to learn. In thinking through what the high-flyers seemed to get right before they got their shows on the road, I came up with a checklist which, I believe, will be helpful to anyone itching to start a business. Here are nine steps to take before you start your business:
- CLARIFY YOUR PURPOSE. We live a purpose-driven life. Your business must have its purpose in the general scheme of things. It must have a reason for coming into existence. To find your purpose, you must start with your Why. You must see, in your mind’s eye, why your product or service will help to improve the world and how it will make life better.
Do not mistake the purpose of your business with making money. That is the by-product of a purpose, clearly-defined, socially-relevant and clinically-executed.
Once you know the purpose of your business, make it your anthem. Let everyone know it. Engrave it in the minds of your staff, your mentors, your financiers and your customers.
- TAKE THE LONG VIEW. Start-ups don’t run in straight lines. Starting and growing a business is not a 100-metre dash. It is a marathon. With its purpose clear, you then attune your mind to the time your business will need to start gaining traction. You should be thinking in a time frame of five to 10 years.
This long-term commitment drives the purpose of the business, and gives it the staying power to wrestle with the problem it cares about. The thought of achieving overnight success is the stuff of story books. It rarely happens like that.
- THE HOME FRONT. Entrepreneurship is a lifestyle, not a job. If you are exiting 9.00 am to 5.00 pm work, where you leave office at closing time, and leave the work behind, until you return the next day or the next week, bye for good.
In your employee position you go through the motions of work, as required by your job description, from the beginning of the month to the end, and pick your cheque by the calendar on Day 30. Game over.
When you cross over to entrepreneurship, you work 24/7. You live, eat and sleep your business. You are first in, last out every work day, and the last to get a pay slip at the end of each month. There may be months you will not get paid, due to shortage of cash. More importantly, you have full responsibility for the employees that work for you. Everything comes down to you.
All too often, this burden, with its emotional ups and downs, gets to your family. The long absences, and the take-home work, tax your relationships. The un-steady income streams stress the family purse.
You are enthused by the spirit of enterprise, and strive to grow the business. You cut the image of a lone ranger, but entrepreneurship is not a solo game. It is a team sport. It kicks off from your home.
You, alone, cannot make the commitment to entrepreneurship. You must line your family behind you. Your family must support your decision to start the business, only then will they understand the downside implications before you strike out on your own.
- YOUR COMPANY CULTURE. Your purpose is clear. You are committed long-term. You have the buy-in of your family. Now, set out the work ethic of the business.
Do not expect the way the company works to evolve naturally, with little or no thought. It is best to carefully think through how members will do their work, towards achieving the goals of the business. This cannot be left to chance.
The culture of the company may be represented by its core values. These values will define the culture of the business, and make hard decisions easy. Culture rules and members must live by it in the business every day.
- CONFLICT BETWEEN CO-FOUNDERS. Co-founder(s) conflict can be a major cause of business failure. It is therefore necessary to consider and resolve, before the business starts, issues likely bring disagreement between its prime movers. Such issues include, but are not limited to, personal goals, equity, management, remuneration, contract terms, etc.
Settling and documenting these kinds of issues, up front, greatly reduce conflicts between the co-founders, and provide the collegial mien essential for the business to survive and thrive.
- FIND A MENTOR. Whatever the kind of business you are thinking of starting, there is a good chance that someone has started and made a success of that, or similar, business.
Find an experienced mentor who will literally hold your hand and walk you through the formative stages of your business. Any local entrepreneur, particularly if he or she is someone you admire, will be good fit for mentoring.
A good mentor will be one you are able to build a rapport with and has a feel for the business you are trying to start. Leverage this relationship to fast-track your start-up.
- FORM YOUR COMPANY. One way to give your business a hard start is to commence operations without formalising and documenting its status. That’s disaster waiting to happen.
Form your company. Give it a legal structure.
Get a lawyer to help you understand and erect the corporate structure of the business. Get the basic agreements to use with your first employees, contractors, etc.
- RAISING CASH. In weighing your financing options, the first questions you should ask are: Do you really need to raise outside money? Is bootstrapping an option?
Many times, if you think hard enough, you may be able to answer the first question in the negative, and the second in the affirmative. Consider bootstrapping as you plan to shake the financial bushes. Deploy your personal savings. Tap families and friends. You never know where the fruits will drop from.
If you need outside capital for your start-up, consider venture capitalists who invest on behalf of their partners and/or angel investors who put their skin in the game.
Should you consider going to a bank for a start-up loan? That is not the business of banks; unless they are playing broker for some soft intervention funds. Banks only loan money to those who have money!
Whichever options you choose, you must seek to work with people and institutions that you can trust to share your vision, and support the best interests of your business.
- DON’T WAIT FOR THE RIGHT TIME — START NOW. Starting is about the hardest part of starting a start-up. There is a natural inertia about starting, about waiting for the right time, about waiting for everything to fall in place. They never will.
When you have the clarity of what you want to do, when you are working toward what you want to create, the resources and opportunities that you need will become available.
Start where you are, with what you have. Start now!