When it comes to startup advice you can never get enough. Starting a business is one of the toughest undertakings you can pursue in life. Statistically you’re bound to fail and those who succeed take years to reap the rewards. So if you’re ready to take on the challenge it’s time to get informed.
Here are six crucial startup tips you need to know before starting your business.
Choose the right business
If you want to increase your chances of succeeding you should stick to areas of business that you’re an expert in. It’s great to be ambitious and it’s great to try and learn new skills in budding industries. However, if you jump into an area that you aren’t familiar with you’re only stacking the odds up against you. Not only do you have to learn about the industry, but you also have to start a company. The latter is hard enough as is.
In addition to choosing an industry within your knowledge and skill set you also need to pick something you’re passionate about. When you’re nine months in, running out of cash, and struggling to stay afloat that extra motivation is going to come from within. That’s only possible if you’re truly passionate about what you’re building.
Do your research early
One of the biggest mistakes entrepreneurs make is jump into building their product or service before researching the market. Your idea may sound great to you, but is there a market for it? Before you go spend a bunch of time and money you need to hit the streets and do your research.
If you’re building an on-demand tutoring app you need to talk to tutors and their students. If you’re building a state of the art spacesuit you need to find your way into the SpaceX headquarters. The point is, your potential customers are out there. It’s your job to learn everything about them before you build them a solution. What if they don’t need what you’re planning to build? This will give you the opportunity to pivot your business or maybe decide it’s not worth pursuing in the first place.
Document your plan
This is two startup tips in one. First and foremost, you need to plan. While that may seem obvious, you’d be surprised how many entrepreneurs hit the ground running without a proper plan. You need to specify your business goals using metrics and dates. Then you need to develop a roadmap where you can determine which milestones you need to hit in order to reach those goals. This plan will obviously change overtime which brings us to the second tip: document everything.
Not only do you need to plan, but you need to have it written down. To keep things organized I recommend using cloud collaboration solutions. Dropbox Paper is a great collaboration tool for startups. It doesn’t have all the bells and whistles but has the bare necessities when it comes to documenting your plans.
Test quickly and iterate
You need to take this one with a grain of salt. Not every business is meant to follow this model. That said, the vast majority should. It’s common for us entrepreneurs to become perfectionists when it comes to our products or services. We spend all this time and money perfecting the solution that we fail to understand one of the most basic startup lessons. You need to let the market decide for you.
If you haven’t already, read the book The Lean Startup. The basic premise is that you should develop your minimum viable product (MVP) and put it in the hands of your customers. MVP means spending the least amount of time and money on a product that encompasses your core value proposition. The reason we do this? So we can fail and iterate.
Failure in this case doesn’t mean you wrap up the business. It means you take the feedback from your customers, understand where your assumptions were wrong, and iterate accordingly. In fact, entrepreneurs often pivot the business so much their idea changes into something entirely different. If the new idea is what the customer’s truly want – you’ve done your job well.
Know when to cut your losses
Despite being told to remove emotion from business, it is a very emotional experience. It’s all too common for entrepreneurs to become emotionally attached to their business. This is why it’s so hard to cut our losses when the time comes.
There’s something you need to remember. Time is your most valuable asset. The longer you spend holding on to a dying business the bigger of a loss you’re going to incur. It’s extremely important that you know when to call it quits.
Let’s say you’ve built an app that helps teacher’s take attendance. You’ve tested at elementary, high schools, and universities in three different geographies. The majority of teacher’s told you they’re fine using pen and paper, in fact they prefer it. Do you take the app internationally? Do you target different kinds of schools? Or do you decide the app isn’t viable. In this case, it’s time to “take it behind the barn”.
Make sure you’re financially in check
As a founder there’s a good chance you won’t be earning a salary from your business for quite some time. It could be six months or it could be three years. It really just depends on the nature of your business.
As an entrepreneur you need to survive. If your business can’t pay you, you need to find a way to generate an income. There’s a misconception that you need to jump into your business full time in order to succeed. This statement definitely has some truth. There is a point where you need to give your business your all. That point however, is when your business can support you.
It’s okay to work odd jobs or side projects while starting your business. In fact, it’s often what’s required in order to succeed. Just remember, there comes a point when you either take it out back or take it on full time.