Launching Your Own Company
- Be totally realistic. Do you have the courage and support system you will need to step off the ledge, leave your current employment behind and start your entrepreneurial career? It's a huge step!
- The support system you need includes your family's full endorsement and enough cash in the piggy bank to get you through and beyond the start-up stage. Remember, things always take longer and cost more than you think.
- Try to hang onto your current job and income stream and benefits as long as possible while you use non working, free time nights and weekends to plan and get your business going. Wear two hats for a while. The longer the better.
- Expect to fund your own start-up efforts personally. Maybe your family and a few friends will help but assume you are on your own for financially backstopping the launch. Unless you have some stellar track record starting and growing a previous new business why should anyone besides you back you in the beginning?
- If you try to raise outside funding for your start-up be realistic proposing what investors get for sharing the risk. I have seen too many viable new ventures never get off the ground because the founder had unrealistic expectations when fund raising.
- Put your plan on paper. Be aggressive with your expense estimates and conservative with your revenue and cash flow projections. That's just the way the world works. You always overspend and under-receive in a start up.
- If you don't know how to put together a realistic business plan then go find someone to help you. Make the plan monthly in year 1 and quarterly in year 2. Forget year 3. You will be lucky to get that far. Review and adjust your plan every month or two during year 1.
- Keep your start-up costs down. Why not start in your basement?
- Pick a business idea that you have total faith in and one that excites you. If you can not be passionate about your own new business idea forget about it. Without deep conviction and passion you have no shot of being successful.
- Pick good professional advisors right from the beginning. Make certain you have a CPA, a lawyer, a bank and an insurance agent to work with from day 1. And make it clear from the outset that you are on a tight budget and that they have to go light on their fees until you get going. Interview 2 or 3 candidates in each category until you find the good fits. This is your advisory team. They have to work together.
- Be prepared and look forward to personally selling. Your new venture is going to depend very heavily on your passion for selling whatever service or products your new company will produce. Unless you are prepared to be the lead salesperson in your Newco don't take any further steps. You will never get going successfully. You will burn through plenty of sales people as you launch and grow your business. You have to be ready to carry the selling burden.
- Spend lots of time recruiting your staff members. Making personnel hiring mistakes can be deadly. Use your personal network to find potential new team members for your organization. Get rid of poor performers quickly. Recruiting great performers is the only way you can succeed. Constantly be looking for real talent. When you find an exceptional person create opportunities to bring them aboard. Top notch people always pay for themselves.
- Rather than staffing up with employees outsource as much as you can with strategic alliances. Why not use a free-lance bookkeeper, independent sales reps, and a web development company? Get as close as you can to being a "virtual" company, particularly during the early stages.
- Develop ways to compensate all the people you hire including outside vendors with some incentive component. You want everyone on your team to have a bottom line incentive.
- Put yourself on the payroll early on in the start-up effort. Why should you work for free and pay all the others?
- Be prepared to re-invent yourself and your business model constantly. The world is changing too quickly. If you stand still you will get run over. A year from now your business will look totally different than the one you envisioned at the outset.
- Have talent on your team that is great using all the emerging internet tools, i.e.; web sites, Linked In, Facebook, Twitter and all the others that will emerge before you read this little piece. If you can't communicate about and drive your business via the Internet it will be toast before it ever gets off the ground.
- Make certain your business has multiple revenue streams and a widely diversified target customer base. You can not rely on a single product or single service for long term success. And you can't rely on a narrow market segment for your sales. If appropriate think globally instead of nationally or regionally.
- I have always found that start-up and emerging businesses need to raise less capital to support their plans than they think. Often creativity, the owner's sweat equity and high impact strategic people connections can replace a big chunk of the capital anticipated to fund the project. And, if you do actually have to raise funding think about getting it from "strategic" investors, i.e. ones who will benefit from your emerging company in addition to getting a return on any invested capital.
Garden State Woman plans to host networking events for those thinking about starting their own business and those who are already underway with their new ventures. Let us know if you are interested in attending. Contact:
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