Entrepreneurs are endlessly creative, and a driving force in the U.S. economy. If you are considering starting up a business, there are several things to look out for prior to investing your time and/or money. A new idea, product or service has the potential for success, but a review of certain facts can help you come to the right decision before you commit.
One: Is There a Market for your Product?
If you are looking for an investor, realize that investors generally prefer to put their money into projects in a growing industry, rather than something new and untried. Niche businesses are less likely to attract investors, but also have the potential of exploding under the right conditions. You may need to put your own money into the project to get it off the ground, and show significant sales before you can attract an investor. If you are committed to proceeding with your idea, your first step is to evaluate the market, and take a long, hard look at the competition. The advantage of a startup in a competitive field is that you don’t have to reinvent the wheel with regard to marketing the product, and can learn from what other companies are doing. The downside is that you are dealing with competition, and any newcomer must have a brilliant marketing strategy to gain a market segment.
Two: Your Organization Chart
The business model can prove to be a make/break for a startup. If your product is still in development, the cost of development should be realistically evaluated before you jump in. If the product exists, and only needs to be released onto the market, your most critical issue is sales. Don’t form a “top-heavy” new business. The owner of a business ideally has the ability to sell the product, as the knowledge of the product and how to interest buyers is pivotal in the success of the enterprise. Hiring the right sales people to get your product sold the most crucial issue at this point in the game. On the back end, on-time delivery of the product or service is equally important for building a customer base. You essentially have just three sections in a new organization: sales, delivery and finances. Focus your attention on developing a sales plan and collateral marketing materials that meet the needs of the market you are entering. As your sales increase, you will need to hire on others, including sales managers (who should be top salespeople themselves, as well as having the right “people skills” to handle sales personnel, as well as motivate and inspire). Focus on what is important in making your organization flourish when you craft your organizing chart. Initially, man up only the most critical jobs, and add more personnel later. Payroll is often the biggest expense, and your organization should be lean and mean.
Three: Publicity
Getting your product reviewed and creating a buzz may appear to be difficult. Start at a local level. Your local media outlets are always searching for content, and if you present a compelling story, they will present it. Get as much media attention as you can, including online reviews, reviews by influential bloggers in your industry, and maintain a flourishing online presence with a website that is kept current, industry blogs that present your company as an industry leader. You can move ahead much faster if you put your “beans” into online marketing campaigns as a priority, and many of these actions are far cheaper than traditional marketing campaigns. As sales increase, you will be able to pay for more expensive forms of advertising. Get your team to participate in local activities, charities and other similar events, raising your profile in the community.
Four: The Right Team
Build a team that can work together. Avoid people who are egotists, arrogant, critical or difficult to deal with. You could end up spending your time resolving intercompany conflicts, and losing the best employees if you choose the wrong people. Your choices when hiring must extend beyond a resume or former achievements. Evaluate the person in front of you as a potential team member – as a human being – as part of your decision. A less experienced person with better people skills may be the best choice. Watch out for any person who comes to you with critical remarks about an earlier employer, or has an unstable work history, moving from job to job, as this usually spells trouble for you in the future. Looking for a partner? Many new businesses fail because the partners get into conflicts. You can avoid this problem by being extremely careful when you choose any business partner – or investment partner. The right team will mean success. Just one “toxic personality” can destroy the entire operation. Get the right team from the start. It is worth taking time to find exactly the right personnel for your team if you want to grow.