Never before has our country seen the inception of so many entrepreneurs than in the past few years. Since the collapse of the economy, one of the most promising discoveries found rising from the ashes has been the surprising presence of startups. Seeing as new jobs are still being created at a glacial pace, creative business ventures are finding their target markets at the speed of brainstorming. However, an ambitious and innovative idea isn’t all that’s necessary to start a successful new business. Nellie Akalp, writer for Mashable, has constructed six precautionary guidelines for startups from her own extensive experience as an entrepreneur.
1. Don’t Underestimate The Business Plan: Just as hard as it is finding jobs these days, it’s equally difficult finding investors to back your startup. The obvious solution is to break ground without funding, which leads some entrepreneurs to believe a formal business plan isn’t necessary. However, like an author uncovering their story through an outline, creating a business plan can help flesh out vital information, like forecasts and marketing strategies.
2. Don’t Get Stuck In The Past: While past success and failures do provide valuable experience into future projects, they do not take into account the changes the market has seen since. In regards to starting her second business, Akalp said, “We had to stop dwelling on previous competitors, customer needs and service expectations and write a brand new playbook.” It’s crucial to go through the entire process again, as if it were your first business, to ensure there is a still a desire for your product or service.
3. Don’t Hire Friends: Everyone wants to help out their friends, especially if their talents might be beneficial to your new business. However, a friendship is an entirely different entity from a business relationship and the rule of thumb is, they mix like oil and water.
4. Don’t Dive In Without A Plan: Every campaign or initiative, like the business plan, needs detailed preparation. Startups thrive off the “new ideas,” but be careful not to lose concentration on the bigger picture. Moving forward can be difficult with new ideas sprouting every other day, pulling your business in different directions.
5. Don’t Fall Into The Discount Trap: “At the beginning, too many young companies feel the pressure to heavily discount their prices in order to win business.” Try to place more concentration on attracting customers by bringing more value to your product or service, as opposed to offering it at a lower price.
6. Don’t Be Afraid To Fail… This is self-explanatory.