My startup recipes: Dos and dont's before jumping on the entrepreneurial bandwagon
I started my entrepreneurial journey in the year 2008, at a time when I had no idea what it takes to be an entrepreneur. Now, in 2018, I have completed 10 years of my journey and in this period of time, I have come across more failures than success. The failures that I faced have told me what not to do, and the success that I achieved taught me what to do to run a business. No doubt that I learned the things in a hard way. The interesting part is that I am still learning and again in a hard way.
There are some mistakes that are very hard to cover up and the same thing happened to me also when I started Humanital. My main aim in writing this article is to share my experiences with people who want to start their journey as an entrepreneur. This article might help you in some way in shaping your journey. This article is the first part of the “My Startup Recipes” series; it will provide you a check that will help you in evaluating yourself before you start your entrepreneurial journey.
Give a second thought to your decision:
Starting a startup is in trend these days. It’s quite natural also if you start dreaming of your future as a next Steve Jobs or Mark Zuckerberg. There is nothing wrong with it. You just spend hours and days to think and polish your business idea. If you have a concrete business idea, you think of ways to execute it. You start thinking about the funding, great team, and a swanky office. This is all good but always stick to the ground and at this stage think of challenges and problems that you’ll face from starting. Think of how you are going to handle those challenges. Introspect yourself and see where are the conflicts, which areas you need to work on. There is a certain skill set which you might need during your journey. If you are lacking somewhere, calculate the risk. And if you can acquire those skills, nothing can be great.
After you are done with all cross-examinations and find yourself at least aware of the pros and cons, risks factors, you are good to go. A well-thought decision will help you to have a smooth and successful entrepreneurial journey without facing much difficulty or failures that otherwise come in the way.
Take an opinion from your family and friends:
This is just like how we discuss and share regular stuff with our family and friends. You can discuss your business idea also with them. It’s not necessary that you’ll get positive feedback but you’ll at least know their interest level. And if you have any expectations from them, you’ll get to know also whether your expectations will be fulfilled or not. Always remember, support of family and friends is always a blessing.
Don’t consider them just your family and friends, think of them as your imaginary customer, investor or team member for a moment and see whether they are conceived with your idea or not. Sell them your business idea. There might be chances that they help you financially or introduce you to someone you might need after listening to you. Make sure that you are prepared with answers to their possible questions. If you are unable to answer their queries, it’s a thumb down for you.
As I earlier said, you won’t get positive feedback always. It’s up to you how you handle the negative feedback. Always remember, be open to hearing criticism, negative feedback but always be rational and keep your morale high.
Find a mentor:
Because you are going to be the first time entrepreneur, your journey will be full of challenges and uncertainties. Down the road, you will feel to have someone who can help you to get to your goal quicker, easier and with much less stress. A mentor comes into the picture for this kind of help. If not yet thought to have a mentor, start working on it.
Before you start your search for a mentor, it’s important to know what are your expectations from your mentor. Accordingly look around you. Go to startup events. Meet new people and try to gauge the compatibility between you and a potential mentor.
The process of finding a mentor should start only when you have made up your mind to start your own venture. If you have not decided yet, keep it on hold for a while because it will hamper your professional image when you say no late saying, I have not decided yet or I have changed my mind.
Start networking with industry people:
Knowledge comes from many sources. One of the best sources is from people. The more people you meet the more aware you will be. In times when people are easily found online, take the most out of it. Use every possible way to connect with people who you think matters to you. Please keep in mind that just establishing connection is not enough, engage with them.
Another way to connect is through an in-person meeting. This is still the strongest way of building your reputation. Come out from your comfort zone and start meeting new people, friends, and colleagues. It’s not important whether you have the complete business plan or not at this stage, you can share your plan for the future and ask for their opinion. I think this is the best way to start a communication in context to your startup.
There are many online and offline communities for startups. They keep organizing events for startup entrepreneurs. Make some time available to attend these events. At this stage, don’t think to go for any paid membership or events. As many of these events are held on weekends so attending them should not be a big problem.
Make financial arrangement for your personal expenses and all your liabilities:
No matter what stage of life you are at right now. There will be expenses. Make a list of all the expenses and come up with a total amount you are going to need every month or quarter to meet those expenses.
Once you know your expenses and liabilities, the next step is to figure out how you are going to meet them. Is it your savings or side income, which will help you to meet those expenses? Because starting a business will make you weak financially in the starting. There will always be a financial crunch. It’ll be hard to meet all your expectations if not planned wisely. So plan your few years keeping in mind the financial crunch.
Do your market research:
Most of the times, people who want to start a business overlook the need of doing their own research. This is something that needs to be done as early as possible because it gives you data about the size of the market, customer, competition etc.
Your market research will give you data for your business idea and will help to take the right decision. Before you start your market research, do some research on sample market research data, which will let you create a framework for your data compilation.
Validate your business idea:
Rather than just jumping on a conclusion and take a step ahead, you should consider validating the idea you have for starting a business. This will help you understand the threats that you may have to face in future along with knowing the benefits that you can get from it.
There is a number of ways you can validate your business idea. You can take feedback from your close network. You can also meet a few clients, which you think they might buy your product or services in the future. It’s always important to go for feedback with your strategically designed feedback form so that you could analyze the data you collect.
Another way of validating your idea is to make a prototype of your product and share with industry people, share on niche community websites, create a pitch deck and send it to potential investors. Including the feedback you receive, you should always use your market research data for your idea validation.
Document everything as a workable business idea:
The more you write, the more clarity you’ll get about your business idea. You should document everything.
If not now, you will need a proper business plan when you go for funding. So it’s better to start documenting early.
Create your team:
Without a team, it’s hard to get to where you want to reach. Doing things single-handedly is very difficult. It is essential to have a team that can help you achieve your business targets. Having no team actually put you at risk in the funding also. Investors are more interested to know more about your team than your business idea. So choose your team members wisely and make sure that you have a great team who are willing to work with you for a common goal. It’s your team actually who will take your business to the next level.
Work on the project cost and source of funds:
You need to be very particular about the funds that are required for your project along with the source from where you will get the money. This ensures that your business activities don't come to a halt because of finances.
While doing the project cost, don’t forget to include the cost, which will be required for marketing and office operations. This has been a very common trend when startup entrepreneurs generally spend all the money on execution and they are left with no money for marketing. You might also face similar issues if you don’t calculate your costing wisely.
The best source of funds at this stage is from your family and friends. If you have your savings, bootstrap your startup. There is financial help from Government also like Mudra loan. You can go with Mudra loan if your requirement is not more than eight lakh. Otherwise, prepare yourself for seed and angel round of investment.
Don't quit your existing job:
When I first thought to start my business, the first thing what I did was, I quit my job. One of the worst decisions I ever made. If you are in a job, never leave that job until you are completely prepared.
The worst impact leaving your job is on your source of income and on your savings. I am not saying to make your startup a side business but everything should be calculated. Till the time you have not decided anything about whether you literally want to start your business or not, you should not think about quitting your existing job. Most of the people make this blunder and they end up regretting it later. Never leave your job until you have done all the homework, have arranged the funds; have prepared the working business plan etc.
Don't create unnecessary financial liabilities:
Your idea might be a money-making business in the future but at this stage, it’ not. You are going to need money, loads of money for your startup. Initially, your startup will be totally dependent on your savings and in this case you can’t take any risk. You should not be spending your savings on things, which is not necessary. Don’t even go for any monthly EMIs option also. Financial burden can distract you from your work.
Don't compromise on the team building:
Your team is your strength, and thus you cannot afford to compromise on it in any manner. Team building is an essential part to pave the path to success for your business. Choose your team member wisely. Apart from what they bring to the table is, the compatibility with you and with other team members if you have any. You can bring the skill set in your team but can't bring the compatibility.
Don't share the complete business idea:
Your business idea should be a secret, don’t divulge all the details related to it with the people in the industry or your team. One step at a time, discuss on particular steps of your business idea rather than sharing your whole plan related to it.
Don't form or create any legal business entity:
Don’t create any legal business entity like a partnership or private limited company at this stage. You should wait till things start rolling out from your end. In case you change your mind later; it’ll be difficult to close the company. It’s better if you could wait for sometime.
What you can do meanwhile is, you can come up with possible names for your startup. You can finalize one name and book a domain.
Don't spend money on paid seminars, events and consultation:
Most of the new entrepreneurs end up spending a huge amount of money on seminars and counseling from the experts. With so much material online, you don't actually have to spend any money on such things. It’s your hard earned money and you are going to need them very soon if you start your business. It’s always a wise idea to keep it safe for the future and for more productive tasks.
As far as seminars and events are concerned, there are plenty of free seminars and events. You can start with the free ones and later when you start earning, gradually you can start going with paid ones.
My concern is, save money as much as you can. You are going to need them very badly.
Don't rent an office or buy any tool, software or paid membership:
Till the time your idea is in the conceptual phase, don’t bother to spend any amount on things like renting an office, buying any tool, software or going with any paid membership. Try to figure out free alternatives available in the market.
About renting an office, co-working culture is already in trend. There are few good options you’ll get in co-working space. You can decide accordingly when you are ready.
Don't make any long-term financial investment:
We do long-term investments to secure our life but in contrast, you have chosen the most unsecured way of securing your life. If you make a large personal investment at this time, it’s possible that you won’t have enough capital for your business. The initial phase of a business is full of risks and uncertainties thus make sure that you don’t invest any money in a long-term investment outside of your business. You might land up in a situation of financial crunch.
Don't move to a new city:
Shifting to a new place just to start your business is certainly not a good idea. A familiar place gives you a comfort and easy access to things.
Don't get into a new relationship:
Your personal life impacts your professional life in a great way. When you are struggling to start a new business, it is not a good idea to get into a new relationship. Your emotional health has the direct connection with your mental health so, better not to take a risk. If you still can’t resist, maintaining a balance between your work and relationship should be your first priority.