21st Century is considered to be the “Generation of Entrepreneurs”. You walk into a high-tech conference, a networking event or meet someone at the coffee shop for a casual chat, and the buzz word you will hear today is “Startup”.
If you are reading this article, then I would think you are a fresh entrepreneur, a final year student looking to venture on your own or a person with decent years of work experience and you have decided to break-away from your unexciting job to start your own business.
You might have a brilliant and innovative idea, and feel you are well equipped with all the resources needed to be a successful entrepreneur. However, it’s always better to take a planned approach - be proactive and ensure that you have the fundamental elements and assets required to succeed in your venture.
Here are some useful tips for the Young and upcoming Entrepreneurs from Co-Founders of RapidValue Solutions – Rajesh Padinjaremadam (CEO), Sirish Kosaraju (COO) and Rinish Nalini (CTO).
Understand your Ecosystem
Before you get going on your idea, you should spend time in understanding what other players in similar space are doing. Research on your competitors’ service offerings and product features, find out if your product will have buyers and what are the buyers looking in a product/service. If you are building a technology firm, you need to know other service providers and vendors would your product/service connect with.
Choosing your Partners
Entrepreneurship is tough – It’s a marathon and not a 100 meters sprint. More often than not you will need partners who will have to help you reach that 26 mile mark. While doing it alone is not easy, incompatible partners can be disastrous for the business. It is critical to choose your co-founders carefully. Two to three co-founders is usually an ideal number and your co-founders should bring complimentary skills. For example - If one is good in sales, then the other should be good at product development. Apart from the skills, the founder team should have a similar risk profile as well as similar ideas of what the dream, and more importantly the path to take to achieve the dream.
Be Prepared for the Tough Times
Before you plan all the resources and logistics needed for your business, please be prepared to cross the hurdles during this journey – long working hours, interactions with demanding customers, and to find and invest in talented human resources. You need to understand completely that entrepreneurship isn't simple and doesn't guarantee success.
Have a Business Plan
Now that you have decided to take the risk, you need to have a business plan. You need to think through a few key aspects – What’s my product offering, how do I differentiate myself from the competition, who is my customer, why will user pay for my product, how much will he pay for my product, what is the cost of my product, what is my sales process and plan.
Apart from the above, you need to set some realistic milestones for yourself such as:
- I will develop a prototype in six months
- Six months to validate the market i.e. get one or two paying customers
- If your plan needs funding, then you should have some funding milestones as well
- Scaling the business to ten paying customers etc.
If you’re not hitting the milestones, you need to figure out why this has not happened and work twice harder to makeup or close the business or move the business another route. For example: If customer validation fails.
You will also need to know the legal and regularity aspects of your business. Get in touch with a good lawyer and a Chartered Accountant to find out all the details before you go head and register your company.
Cash Cash Cash
You should start your business once you have a good network in the corporate world, or you can self-fund or you have ground-breaking ideas which might have higher chances to get VC funded. However, you shouldn’t depend on Angels and Venture Capitalists to finance you right away. This means that your initial customers will mostly be the ones funding your business through their cheques. Therefore, ensure that you conserve your cash and that you build cash inflows from your customers. This is absolutely critical for long term survival of any firm. Infact most Angels and VCs will expect you to have paying customers before they invest in your business. If you get to good cash flows then there are other forms of funding that you can look - Debt funding from banks, other financial institutions etc.
Hire and Nurture the Right Team
You might start alone, but eventually the aim is to build your team. First step is to hire the right team. Look for culture fit when hiring rather than just skills. The initial growth phase is hard and you need to have a team which gels culturally together and also thrive in the uncertainty and chaos that a startup offers. You need to know how to nurture your team. Everyone looks to grow in their career. Develop a good rapport with your team mates; it can be personal but at the same time keep it professional. Give them the opportunity to come up with new ideas and take ownership. Nurture a healthy work culture.
Note from Co-Founders: Every single company situation is unique in its own way. Therefore, not all points mentioned below may be applicable for your specific situation. You should judiciously choose to do what suits best for your situation. These above mentioned tips are personal thoughts.