another year to an end, you may have quietly committed to a resolution that
this was finally going to be the year that you take the plunge and start
your own business. Naturally, you're a bit of a geek, so it will most likely
be in the tech sphere.
The idea has been brewing in the back of your mind for years and, for some
unknown reason, the time finally seems right to take those unguided steps
and break away from the security of your 9-5 job. Just knowing you are about
to follow your passion makes you feel energized and reinvigorated, spurring
you to hand in your notice to your boss with the hope that one day you will
be driving past him in your new Ferrari and wave.
As the old saying goes "you can't buy experience", and without proclaiming
to be an expert on your specific idea, here are my seven "insider" tips to
help you on your new journey or make you think twice before you take those
pioneering steps.
Cash
Cash is king! If starting your business were a chess game then this is the
piece that could win or lose you the game. So keep your eye on it. No matter
how much profit you make on paper it means nothing unless those profits
generate cash for the business. Ever wonder why Groupon took off in the
early stages? Yes, a clever idea, but I can promise you the $1 million that
its investors gave Andrew Mason after a few months of operating sure went a
long way to helping him build his business.
Your idea
Don't be afraid to tell people what it is. Trust me, the fact that you are
already working on your idea puts you ahead of the pack. People have great
ideas everyday but as you will soon realize executing those ideas is where
the skill lies. Everyone else either doesn't have the skill, the time or the
courage to take the plunge. What they will however do is mention someone
they know who could help or is already in the space which will go a long way
to building your network and understanding your product.
Investors
Sorry, but it is a sad truth, no matter how grand your idea is virtually no
VC will touch it unless at the very least a product has been developed and
it shows some market potential. You are going to have to either fund the
early development of your idea either yourself or lean on any Angel Investor
you know who can give you some of the upfront capital.
Time
Most things take twice as long as you forecast them to. Regardless of the
endless hours or constant hassling things take time. You will be dealing
with corporate who are not watching their bank balance as closely as you are
or with suppliers to whom you are ranked as their 9 035th favorite customer.
So when you sit and forecast how quickly you will be able to buy that
Ferrari, in most cases double that time.
Credibility
In your previous working life you may have been top of the corporate crop
and smashed every target given to you. Surely people who you deal with now
will see that and give you the same sort of respect. Sorry to burst your
bubble but you are the new kid at school again. You are going to have to
build your reputation one success at a time before anyone will part with
their hard earned cash to either invest in or buy your product. In fact,
establishing your credibility is perhaps as instrumental to your success as
cash is.
People
Ever wonder what the finance person actually does in your office or can't
understand why it should take so long for the IT manager to build a three
page website? You are about to find out the hard way. People are one of the
biggest assets you are going to miss when you go out on your own.
Unfortunately, you will not have the cash to afford to pay them so you are
going to largely be left to your own devices. Yes, you can do some of the
admin but by identifying what the biggest "people asset" is that you need,
and investing in them as much as you would invest in your product, you will
dramatically increase your chances of success. This may mean giving up
equity or coming to some other solution, but remember your idea is not what
will win the game, it is how you execute it that will.
Marketing
Too often marketing is left as an after-thought or thought of as something
that anyone can do. I mean how difficult can it be, you just make an advert
right? Your product may be the greatest out there, but unless it is packaged
and presented to the consumer in a way that positions it so that your target
market sees it, understands it and makes them want it, you stand no chance
of succeeding. Considering the marketing of your product can even tactically
change what your product offering at launch is. Oh, and please don't forget
to budget for some marketing expenses. You can't just put it on Facebook and
expect everyone to "share it" with all their friends.
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