By Ryan Velez
While many industry experts may sing the praises of entrepreneurship and what it can do for your own personal success as well as the economy overall, what they may fail to shine truth on is that most startups will fail, and the deck is often stacked against prolonged success for them. A recent article from The Network Journal prepares you to navigate some of these early pitfalls, not by avoiding things, but by handling some of the major milestones of every business as it gets started. Here are some of the moments to prepare for and advice they suggest.
Here are some of the moments to prepare for and advice they suggest.
At the end of the day, every business needs a healthy cash flow to survive, startup or otherwise, but how you handle your first dollar of revenue can mean a lot towards your financial status going forward. This is both in the symbolic and practical sense. After taking the moment to pat yourself on the back, there are a few things to reflect on after making your first dollar. How long did it take you to make it? What were the costs to get to this point, both in time, money, and effort? If you find that making this dollar took an inordinate amount of time, or that you’re spending more on acquiring customers than their lifetime value, you want to make changes to your business model. Now is the time to do this, as you may not be able to do it later.
One major point that requires a lot of attention is your first hire. On the surface, this is a great moment—a sign that your operations have grown to the point that you need to bring someone on. When bringing on a new hire, there are a few things you should consider. First, make sure that the position you are trying to fill is clearly demarcated. Know what your end goal is for this hire and if there will be room for growth down the line. Also, when pooling for candidates, diversity is a valuable trait. This isn’t just in terms of demographics. Bring in diverse sets of skills, experience, and network connects. A varied lineup of these traits will create a more well-rounded business environment.
Another major milestone is seeking out your first investor, and the work here begins well before you start meeting with potential candidates. Make sure that you have a relevant network that can steer you towards people with experience in your industry. As you start talking to would-be investors, be sure to focus not just on their answers to your questions, but what they ask you. Try to gauge how interested they are in your business, and make sure they want to dedicate time and effort to your business rather than investing in a wide selection of startups. You also want to make sure that your chosen investor isn’t just for getting the most money. An investor can also serve as a mentor and friend, and these benefits outside the profit margin are some of the most important of all, especially when you are just starting out.
Keeping these facts in mind before you commit to opening your own business is always a good way to handle your startup’s success. This will foster an environment that is suitable for growth, and provide the flexibility for you to hop on opportunities quickly when they arise.