Many well-known success stories such as those of Facebook, Google, or Microsoft are linked to the desire of many entrepreneurs to establish their own Startup. Because world-famous entrepreneurs such as Mark Zuckerberg, Larry Page, and Sergey Brin or Bill Gates are omnipresent and role models for many founders of companies. However, all beginnings are complicated, and without a lot of diligence and hard work, the path from idea to a successful start-up is rarely successful. Despite the supposed risks, it is essential to keep an eye on the opportunities and pursue one’s own vision.
Start-up founders should think big right from the start. Are the foundation and its success really that simple? This is precisely the question still posed by a large number of potential founders who do not know at the outset how difficult it actually is to bring their own functioning start-up to life because the attraction of success and big money is always countered by the danger of putting one’s existence at risk.
To facilitate your way from the first business idea to a successful start-up, we give you 10 pieces of advice.
#1 Develop your Business Model & Write down your Idea
Many founders like to talk a lot about their idea. However, they often find it challenging to summarise their concept in 3 to 5 sentences. So our advice: write down your idea.
In the next step, you must critically examine whether your idea can actually be implemented, i.e. whether it can be placed on the market as a product or service and promises long-term economic success. A proven method for structuring the concept and checking its feasibility is the Business Model Canvas. Nine central key factors that are important for your own business model are analysed, connected, visualised and developed further until a viable model is available. Strengths and weaknesses of the own business idea are examined as well as the economic viability.
The Business Model Canvas is particularly suitable for founders in the early start-up phase who want to put their concept through its paces.
#2 Focus on the Right Customer Base
Founders are often told to just focus on the product, and the appropriate customer base will eventually find their brand. However, opinions differ there.
Syed Balkhi, the co-founder of WPBeginner, thinks that startups should work backwards to become successful: First, identify a customer base and determine a pain point, then create a product that solves the problem.
Balkhi is convinced that customers are much more likely to find the value of the product if the start-up focuses on the pain point.
#3 Say ‘no’ to Some Opportunities
Although founders are often advised to always say ‘yes’ to any possibility that arises, it is not truly recommendable.
Zach Binder, co-founder, and president of Bell + Ivy admits that opportunities come from everywhere, so he understands why entrepreneurs don’t want to miss out on them.
However, it’s not an excellent strategy to agree to every single opportunity that comes your way.
Binder explains that understanding when to say no is what makes a good entrepreneur. If you say yes to everything, your business will be so scattered and unfocused that no one knows what you are doing.
New entrepreneurs are often encouraged to stay on course and not to give up if success is not immediately apparent in their business. While it takes time to get companies up and running, it is essential to know when to change direction.
#4 It is your Business – You Decide
Mentors often support entrepreneurs on their way to success. However, these mentors can often give contradictory advice.
The founder of ‘EverTrue’ Brent Grinna, who was also supported by highly educated mentors on the journey, describes the experience like this:
Mentors can give advice such as, ‘Focus on big accounts!’ ‘Focus on small accounts!’ ‘Go B2C!’ ‘Go B2B!’
Mentors offer a point of view based on their professional experience and their limited perspective regarding the startups’ market and customer base. While mentor feedback is highly valuable, the founder ultimately has to make important decisions for him or herself.
#5 Time Management
In the daily work routine as a start-up founder, it quickly becomes apparent that individual entrepreneurs, in particular, have many different tasks to perform. They not only have to take care of a specific area but also fill all the important stages in the start-up with life:
- Customer acquisition (marketing, sales)
- Accounting and taxes
- Customer service (returns, feedback)
- Maintenance of business relations
- Organization for further development
Even if not all aspects are as comprehensive as they might be, depending on the personal situation, a good organisation is of great importance for every start-up. The following tips can be helpful in this regard:
- Keep order: There should always be some order on the computer as well as on the office desk. Looking for documents and important files can waste a lot of time unnecessarily.
- Learning to delegate: When you are faced with new tasks, you should always consider whether others can do them better and faster. Depending on the situation, employees or other freelancers are often the right choices. If you want to do everything by yourself, you will end up getting tangled up.
- Prioritise tasks: In self-employment, there is always more work awaiting than can be done. For this reason, a classification system can be beneficial so that the tasks can be sorted according to importance. Of course, startup founders should not forget the urgency.
Use Elevator Pitches or a founders’ event like a founders’ meeting etc. to network with other founders. Good contacts are valuable capital and only harm those who do not have any. Maybe at the next NEXEA event or any other founders’ event, you will network with someone who can help you with your start-up to market your product or service. This way, a Win-Win situation is created for both.
When an entrepreneur has an idea for founding a start-up, it is important that the necessary research is done. The market size should be analyzed in the best possible way to get a clear picture of the target group. Additionally, the competitors domestically and abroad should be identified so that your startup can have a competitive advantage in the long run.
Especially in front of investors, many founders claim that they are unique in the market and have no competitors. This is a sentence that investors do not like to hear, as it often merely implies that the founders have not done enough research. This is a common reason why many start-ups fail. They are simply often overrun by their competitors.
It is essential to know where you are positioned with your company in order to ensure its success later on.
#8 Build a Strong Team
Your team is one of the most critical assets in a start-up. No matter how good the idea is, if the team does not function, the startup will probably not be successful. If you can’t trust someone on your team, they should probably not be part of your company.
Of all the candidates you interview during the recruitment process, only hire the best people who can help you grow your business. That’s why you need to give the people on your team freedom and responsibility. Believe that your employees will do the right thing, and they usually do. By doing this, you empower them to tackle problems on their own, to push themselves to their limits and become doers.
#9 Positive Approach to Obstacles
No matter which founder you ask, every company encounters problems at some point. But you should keep a cool head and not panic. There are always solutions to the difficulties you are facing, and over time you will gain experience, get practice, and lose your fear.
Don’t be afraid to ask for help from experienced founders or mentors. Everyone knows your situation and will help you as much as they can. As a founder, you will have a learning curve and will only grow from the problems that you are facing.
#10 Planning the First Financial Steps & Pitch It
Start-ups generally follow a classic financing cycle that extends over the following phases:
The first phases are naturally the most difficult. Once things are up and running, and the operating results are satisfactory, later financing rounds are usually easier to implement.
But where do you find business angels and other investors? The best access to investors is, without doubt, a recommendation through your own network. But especially first-time entrepreneurs often do not have these contacts. Therefore, we recommend attending pitching events that are as relevant as possible and presenting your start-up, for example, using an elevator pitch. The pitch deck and business plan are then decisive for further contact with interested investors.
Major challenges – and founding a company is part of this – do not require a complicated solution. Define your objectives, and then eliminate anything that distracts you from achieving them. Instead of wanting too much at once, work out the core offer of your start-up, and convince your customers. After all, you can always expand the offering later. If you need further support in setting up your business, you should also get some start-up advice. They know exactly what is important when setting up a business and can assist you individually.