Published May 03, 2016
There’s nothing quite like the satisfaction that comes from identifying a smart solution for a market challenge. Unfortunately though, the joy of that “a-ha!” moment can often lead to rash decisions, like shelling out thousands of dollars for a website domain only to realize that your idea is not legally feasible. Or spending hours meeting with investors only to discover that someone else already went to market with the exact same idea six months ago.
In the fast-paced startup world, it’s easy to fall into the habit of acting quickly rather than thoughtfully. Of course, forward progress is always the goal but not at the expense of building a sustainable business. As you move through the chaotic early days, pay attention to the decisions you make about your product, team and operations; think about how those decisions will impact you not just tomorrow, but five years down the road.
Here are five ways to ensure that the startup you’re building will have a lasting market presence.
Starting a business is a lot like putting your house on the market. Regardless of how impressive a home is, timing matters -- and you’re best off if you can strike when the market is hot. Even if you have a great idea for a business, it may not be the right time to introduce it to your audience, which can be tough when you’re eager to get started. Pay attention to signals: what your potential buyers are talking about, how other businesses in the industry are performing and whether there is a clear need among your target market. This type of research will help you determine the most strategic moment to launch and grow your businesses – and avoid an early demise.
When you’re first starting out, it can be tempting to select the vendors who give you the fastest and cheapest quotes. But that approach, as the saying goes, tends to be penny-wise and pound-foolish. In other words, while you may be cutting expenses upfront, what are you sacrificing down the road?
As the founder of a digital package locker company, I faced a choice early on between Chinese and domestic manufacturers. After some missteps, I realized that investing in higher-quality materials would lead to a much better product and more satisfied customers in the long run. When making critical decisions about your partners and production, always consider whether the bargain is actually the best deal.
Even if you’re running a two-person show, every single aspect of your company -- partnerships, customers and operations -- should be documented in some manner. New employees joining your company will need to know about its policies, certifications and contracts. If that information only exists inside your head, it’s going to be very difficult for new hires to get the intel they need to contribute effectively. It may seem tedious, but keeping meticulous records early on will help ensure that the company operates smoothly as it grows.
Similarly, founders must prioritize accounting, as this leads to credibility in whether or not you have a viable business. If you don’t have the skills to do this yourself, hire a chief financial officer who can do it for you. If you can’t afford a CFO, hire a bookkeeper. If you want to show an investor or potential hire that your company is viable and poised for growth, you have to demonstrate control over your finances and show that you are measuring your growth financially. As you grow, being able to report accurately and seamlessly to your stakeholders will be critical to success.
Employees that are drawn to startups tend to thrive on the chaotic pace of life and sense of adventure. Of course, that only goes so far; employees still need to feel valued and know that their job is safe in order to feel motivated and work hard every day. Be sure that your team members know exactly what is expected of them -- and what they can expect from you. Create employee manuals and clear job descriptions to give your team a sense of security. Host regular meetings to hammer our project plans and celebrate milestones. Show your team that you’re committed to their growth, and go the extra mile when an employee has personal needs that arise. Doing so will help increase employee loyalty and retention, which is critical to the longevity of your company.
The next time an entrepreneurial impulse strikes, remember to take your time and maintain a level head as you work to translate your idea into a business. It’s the best approach for turning that a-ha moment into a company that’s poised to scale.