1. Introduction:
It’s easy to get started. It’s much harder to keep going. Many people and companies have started businesses, either by just reading a book or by trying their hand at it. However, the process of starting your first business can be challenging, especially if you are looking for a profitable venture at first.
I would like to shed some light on the difficulties that you may encounter while starting your business — and hopefully inspire you to find ways to overcome these challenges and make it tremendously easy on yourself!
2. The process of starting a business:
This is a very long post, but I should have some of the backgrounds for you. If you are new to this kind of thing, you should start with Part 1: Getting Started (aka “Getting Duh”), and Part 2: The Early Years (aka “The Early Years are Hard to Find”). You can also read a brief summary of the steps from here.
This is a very big topic and I am going to try not to get into it too much in this post because I want to focus on the start-up process as a whole, with an eye on the challenges it brings along with it.
I would like to make two things clear right away. First, several of these points apply equally well whether your startup has been around for a few weeks or years; second, these points are also true if your startup goes public in any manner (i.e., whether you sell shares or options). In other words: they apply no matter what you do. And that means that if you follow any one of these processes (or all), your company will be stronger for it.
Now let’s take a journey through those challenges and those rewards…
3. The challenges of starting a business:
A few years ago, I started a business. I would like to tell you about it but it’s not for the public. I used to do this for money anyway so why not make some money doing it from scratch?
The process starts with a strategy that focuses on getting the business up and running and building a sustainable revenue stream. If you want to do this yourself, there are many resources available that will help you figure out what your needs are and help you see if this is something that would work for your situation. For example, one of my favorite tools is called Canva which is an online creative platform where you can create graphics and designs in an easy way.
The process of starting a business also has its own set of challenges — most importantly, being able to stay focused on what needs to be done right now in order to get the ball rolling.
4. The importance of planning:
Planning is important to success, but planning is rarely done. And when it is, it is usually only done at the last minute. The reason for this is two-fold: first, there are so many variables that need to be considered (e.g. timing of the launch, product features, pricing structure, etc.) that it is hard to be specific in your planning (I’ve been in this situation many times).
Second and more importantly, there are many assumptions that need to be made; most of which should be made after you have a strong idea of where you want to go and what your business model needs to be. This can take a lot of time and planning and will require a lot of capital investment.
This post by Robert Allen offers some great advice on building a business from scratch without having a great business model (which often means working from only 4 months out).
5. The need for financing:
The first step in starting a business is to decide what you want to do. Once you have decided, the next step is to start looking for investors. The decision whether you should raise money initially should depend on what you want to do, and also on your experience with previous businesses. There are many motivations as well as big differences in experience that can influence this decision.
My personal view is that if you know your product or service well enough, especially if you have built up some kind of reputation, then it makes sense to get some capital straight away (because it will be easier to convince people that the time spent building up a good reputation benefits the company more than it does yourself). On the other hand, if your product isn’t very good yet or if you aren’t sure about your idea, then raising money might not be necessary at all.
For me, one of the biggest challenges in starting a business is financing — so much of our work has been focused on building out what we can deliver and preparing ourselves for when we raise money. For example:
1) We use personal savings rather than credit cards because:
a) We have no need for quick cash;
b) When we’re running low on cash, we just don’t have time for any unnecessary spending anyway;
c) We know how to make long-term plans;
2) The balance of our bank accounts is held by a bank account manager who pays an interest rate twice as high as most people pay at their local bank — so we can absorb any losses from bad investments easily; and
3) Our small business insurance position gives us access to high-end coverage at affordable prices. So there are no financial constraints (as far as I know).
However, there are many factors that impact how long it takes us before we raise capital:
The startup stage: Even when most startups don’t need financing right now right away (see below), they tend to delay their first round until they feel like they have enough momentum and stability in their products and services that they don’t need to worry about raising funds immediately (e.g., Ian Boulton has successfully raised $5M+ without needing any startup funding). This may take years even with typical growth rates — but often happens more quickly than expected when things go wrong or things get really tough financially during an early-stage startup period. If you think your product or
6. The role of marketing:
Do you know what your business is?
Do you know where it’s going?
And are you prepared to live with the consequences of failure?
The answers to these questions may not be in your control, but they are not completely outside of your control.
If you’re starting a business, then you’re in an enviable position: You have no one to blame but yourself. But if you’re starting a business when problems are already piling up around you, then it’s easy to blame others — and start searching for someone else to blame.
We all carry a lot of shame, guilt, and anxiety around our businesses nowadays. The reason is simple: we have tried so much that we ended up overwhelmed by the sheer volume of stuff we had produced. We all want our businesses to be successful, but so much of the work is done for us by others that we really don’t know where success lies anymore. We simply lack a clear understanding of what success will look like for us in the future and how to achieve it.
In this post, I want to talk about how marketing can help get us there.
This post isn’t about getting good at marketing (see below). It’s about getting ready for marketing when it comes time to do it — and having a plan so that things go smoothly (and not into chaos). You’ll also learn some very useful tips on how to make sure that marketing doesn’t just happen on its own, and why trying too hard is sometimes just as bad as not trying at all (if the right approach is taken).
In this post, I’m going to give four quick tips on how marketers can help us get ready for marketing when it comes a time — which could be months or years down the line after we’re done building our product. So let’s get started! Note: This post was originally called “4 Tips for Starting a Business”. I’ve updated it with some additional information based on feedback from readers and conversations with people who’ve been doing business from scratch lately. After reading this post, stay tuned for more posts that cover topics such as buying products (eBay), building products (eBay), using products (eBay), and selling products (eBay) — a whole host more topics that aren’t necessarily covered in this article!
7. The importance of management:
There are three common ways to start a business these days:
a. You can design and build a startup from scratch. b. You can hire someone else to do it for you. c. You can buy an existing company or you can start one from scratch — but you’re not allowed to be greedy or aggressive and use it as a way to increase your personal wealth (possible exceptions of course, but then why do startups in the first place?).
There’s probably no single right way or wrong way of doing it, per se (though there may be ones that are better than others) – but I hope this post helps put some perspectives on the question of how best to do it – because if you’re going through the motions — whether you’re building a startup or just starting up an existing one — there’s no point in doing it half-heartedly.
I’m going to address this question first from the perspective of “starting up” and then go into some detail about how best to do so from both perspectives later on. It’s not as simple as saying “It’s either/or” – there is more than one direction that can be taken – so this post is meant to help those who already know what they want, but still have questions about how best to get there – and those who don’t know what they want, but are considering taking action anyway for various reasons (e.g., just starting out).
Borders: It’s Time To Start
Before we begin looking at the different ways that startups can really start a business, let’s define what exactly we mean by “startup” in general terms: The word “startup” has various meanings depending on the context (e.g., small scale vs large scale; regional vs global; local vs non-local), so it’s not useful as a general term for describing anything like our hypothetical example above: A startup exists in two distinct states: 1) The product is built, 2) Someone sells it at some point in the future. So if I tell someone I’m starting up a startup (the product is built), they may expect me to say something like “I’m building a product with my co-founder David and will sell it when the time comes.” (Not true.) If I say I’m going to build something myself, they might ask me questions like “is this going to be an
8. Conclusion:
It’s common knowledge that starting a business is hard. And while it’s certainly difficult, it’s not impossible. The key challenge is capitalizing on the opportunity to get your company off the ground without having to go through the rigors of a traditional startup process. And if you want to do this, you need to think differently about what it means for your business and what will be involved.
It’s clear that many founders start their businesses with the wrong mindset; expecting their startups to be fast, cheap, and easy – with no consideration for how long it will take them to make money. So when they do realize that taking a traditional route might not be the fastest or cheapest way (or even possible), many bolt-on “free money” by getting investors in early and securing equity. A typical investor valuation range is $1 million–$50 million if they invest in an existing company or $5 million–$125 million if they invest in an idea (it varies). This may sound great until you realize just how badly behind you are relative to that valuation.
The fact is if you want your business off the ground – and if you want it done right – you need a solid plan that takes into account all of the factors involved in starting a company:
You need to have a great idea
You need financial backing
You need partners who can help execute your plan (so even if things go horribly wrong, at least everyone will know where to find them)
You need all of this before anyone else does!
If any of these aspects are missing from your company (and even if they are present), then chances are good that things won’t work out well for you. So don’t count on getting everything done quickly — instead, work towards ensuring everything is done right and efficiently so as not to miss out on any important opportunities along the way.
