Are you starting a business for the first time? It can be challenging to step out of your comfort zone and go head to head with competitors, manage customer orders and deliver a desirable product. Putting in the right amount of market research goes without saying. But how do you increase your chances of success when starting a business? Check out these 6 ways here.
- Put the Right Team Together
While many entrepreneurs start out as a one-man (or woman) band, if you’re starting your business with others, putting the right team together is essential. You need to make sure that you work with (or hire) people whose skillsets complement your own. If you’re a genius with design, but not so hot on numbers, hire a capable CFO. If creative ideas are your thing, but you lack programming skills, a wizard developer or CTO is just what you need.
Working with the right people will not only increase your chances of success in the early stages, it will increase your likelihood of getting financial backing as well. VCs and angel investors look for many things when deciding to back a company. A solid management team with all the skills covered is one of the most important.
President of Day Translations, Sean Hopwood, says: “I started my translations company on my own. I got used to managing every last detail and skipping family gatherings and visits with friends. But when I got to the stage where I had enough income to hire extra people, I made sure they were all-rounders with a hard-working attitude. It’s so important to have the right people on board, with skills that complement your own and who can run your company without you.”
- Offer a Product that Meets a Demand
You may want to go down in history as the next Apple, Facebook, or Netflix. But, not every company is successful because of their innovative ideas. They turn profit because they sell products that meet a need. You can have the best idea on earth, but if people can’t see themselves using it on a daily basis, you may as well keep it to yourself.
Ever wondered why Chinese and South Korean companies are so successful? Because they take other people’s ideas and improve them. So, ask yourself before starting out – is there a demand for your product? And how can you make it better than the competition?
Says Hopwood: “There’s a lot of competition in the translations industry, it’s easy to get discouraged, but it also meant that I didn’t have to reinvent the wheel. I checked out the competition and came up with ways of improving on their services. Like offering 24/7 support and translation of rare languages. Now we’re one of the most trusted medical translation services companies on the web.”
- Save Up Some Cash
It can be tempting to get started on your business before you have any savings reserves. But, it’s foolish not to have some backup cash in case of emergencies. You may plan out all your costs meticulously, but you should always factor in for hidden or unexpected expenses. Many a business fails in its first year because of lack of cash reserves. Try to have enough money behind you for at least the first year to boost your chances of success and cover your costs.
Hopwood had a few scary moments at the beginning. “I had to max out my credit cards and take out a loan just to pay my staff. In some ways, I wish I had waited to save up some extra cash, but I was lucky to be surrounded by excellent people and have faith that my company would grow. It paid off, but I wouldn’t wish that level of stress on anyone.”
- Get Some Experience
You may be more of a hands-on type of person, but if you want to start up a company in a field you’re not trained in, make sure you get some relevant experience first. If you are familiar with your industry but have never managed people before, try reading up on management skills or taking a course.
Find out at least a little bit about the functions of all the departments of your business, from programming and marketing to accounting and HR. Knowing what you’re talking about and who you’re dealing with will increase your chances of success.
- Talk to a Lawyer
Love them or hate them, lawyers come in handy when you’re starting a business. You’ll need to know how to patent a trademark, what the rules are about competing against certain companies (like the one you’re leaving) and if you can get out of your current contracts. They’ll also give you invaluable advice on how to form your business and what type of entity you want it to be, from Limited Liability, to Inc.
- Check Out Your Competition
While you’ll almost certainly cover a competitive analysis in the research stage, keeping a constant eye on your competition will increase your chances of success when starting out. Find out who’s in the market you’re going to compete in and what customers are saying about them.
Check out the strongest competitors as well as the ones that aren’t so popular. What are they doing wrong? What do they do right? What ideas can you steal, emulate or improve on? Knowing how your competitors win market share will give you a head start as to where to find yours.
“We use various methods of keeping tabs on the competition and constantly measure our results against our closest competitors. Sometimes it can be a real challenge, but if you don’t know who you’re going up against in the beginning, you’re walking into battle blind. Get to know your competition, their strengths and their weaknesses. Then it’s much easier to find a way to crush them.”
No matter what business you’re going to start, be sure to keep an eye on your long-term future. Many small business owners get caught up in the day-to-day details when starting out, that they fail to keep an eye on the bigger picture. Lead your team better by remembering to keep your head above ground. Keep these tips in mind, be passionate about what you do and you’ll be on your way to running a successful business in no time.