Do you have doubts about starting up a new business? Don’t worry; most people have dreamed of starting their own business at some stage in their lives, but the majority of them do not take the first step.
They are changing their minds for several reasons. Some fear that the business will not succeed; they could lose all investments they make. In many cases, their entire life savings.
Some people think they are too old to start a business. Even they use this as an argument that this is keeping them back, they think of other sources of income to stop themselves from taking the plunge.
Age is not a defining factor to consider getting into business for yourself.
“The average age of a successful entrepreneur in high-growth industries such as computers, health care, and aerospace is 40” and “Twice as many successful entrepreneurs are over 50 as under 25.”
Entrepreneurs get better with age – Harvard business review.
Colonel Sanders started the KFC chain when he was just 65 years old. Takahiro Mori, a real estate empire tycoon worth $13 billion, invested in the first property business at the age of 55.
Earlier start-ups were considered risky business or even foolish with a point of view that the business owner might have no idea how long it will continue. This term in business is called Going Concern. Many businesses have failed with a lack of monitoring of the going concern.
But in the age of social media and platforms like Facebook and LinkedIn, many have observed that starting a new business is not that risky. Not all start-ups are equal; some are unique in their way.
People are attracted to something new in the market. When you are enthusiastic about the opportunity, you are likely to succeed.
“Start-ups are no longer niche; they have gone mainstream,” says Daniel Gulati, co-author of Passion & Purpose
Whether you should start a new business is an interesting question but also a hard one. We suggest thinking about the transition in phases or steps to check your optionality to disengage at any point.
Focus on opportunities and research about the desired business with all due diligence and soul searching. Figure out whether that particular business is right for you.
“thinking about [it] just as an investor would.” Gulati
The very first step of any decision making required serious introspection.
Why would you start a new business in the first place?
Getting control over what you hope to get out of the experience will identify the right opportunity. Also, consider the value you can add, what makes you a so desirable candidate, and the availability of knowledge keeping in mind that the individuals who do best at start-ups tend to have a curiosity of an Analyst because roles and responsibilities are quite fungible.
In any business, the team is very important and plays a vital role in the company’s overall success. It is very important to like your team and feels aligned with the company’s ethos. However, that is especially true when you are working in a small, tight group. Once you are in discussion with a particular start-up, get a realistic and achievable view of what your work life will look like.
Many observers have believed a failed start-up is directly linked with a failed team. Our recommendation is to spend a few hours every day with your team before and after start-up about the business’s overall vision and how work will be done.
Start-ups need a financial strategy even before it is started. When you have an execution plan, a marketing strategy, and other important analyses, but when it comes to Financial Management or Plan, a start-up with a poor business model can die or fade away. A business model is defined with financial numbers and some metrics.
A compelling financial plan can help the business owner to get funds and find investors. For investors, the only thing matter is financial numbers in the future. They generally are least bothered about the team, internal policies, and Sales Plan. All matter numbers in the end.
Investors and funds providers take start-ups more seriously when they can perceive some level of the company in terms of financial management. A good Financial Plan can do wonders for a start-up.
The numbers can transmit a level of credibility and confidence. Therefore, start-ups that pay good attention to financial numbers in the early stages can value their business.
Yes, your idea may seem appealing, but great ideas are not always translated into great profits. So before you start-up, seek out guidance from industry experts. Many virtual business consultants might help and assist you well. While not everyone will think it is a good move ( considering risk factor), even the positive people willing to play devil’s advocate with you
Principles to remember
In reality, most start-ups are failed even if their business models are impressive. Most of the mistakes start-ups make are preventive, and focussing on those mistakes can somehow increase the chances of success.
These mistakes are:
What we often see in new businesses is that a number of individuals believe their venture is so appealing that the market will beg for it, and money will start to generate instantly. Most of them do not understand their product or services, especially in the early stages.
Many start-up individuals do not possess the skills what is needed for the business, and there is a lack of concentration in valuing their skills and business background besides their professional experience.
If you lack any skill or ability need for the business, be sure that you identify those needs in the early stages of start-up and study hard to learn all those skills. Theoretical knowledge can give you an upper hand against the competitors and can prevent the company from crashing.
Many founders want to build a perfect product or a solution for their business. The problem comes when you fail to identify to prevent cash flow problems that are usually low profits, high cost, clients delaying payments, etc. The more you start-up see those issues, the closer you are towards liquidity.
Always try to negotiate terms with vendors and clients. For it, the company’s terms and conditions are very handy. Many new businesses do not realize how important is company terms and conditions. If a client delays payment, it can affect the cashflow heavily since many fixed cost is also associated with the business.
Some start-ups launch products before their time and either market or related technology is not there yet. The key factor is to always ask questions to yourself with competitor benchmark and with a common-sense whether the product will work in the current market or have the potential to general cash inflows.
By the way: If you’re interested in rather join a growing start-up than building your own company, make sure to check out our website services. We help start-ups raising funds, financial planning, consultancy, and virtual assistance.