Recently, some reporters reached out to a number of successful entrepreneurs on what piece of advice would they go back and give themselves when they embarked on their first start-up. Here we look at the key highlights… 1. Competition How competition will affect a startup depends on how its founder(s) perceive(s) and handle(s) it. It can
Recently, some reporters reached out to a number of successful entrepreneurs on what piece of advice would they go back and give themselves when they embarked on their first start-up.
Here we look at the key highlights…
How competition will affect a startup depends on how its founder(s) perceive(s) and handle(s) it. It can be both good and bad news. It’s every start-up’s dream to reach thousands, even millions of customers with a unique proposition, which has no direct competitors. In most cases this is like wishing for a cold day in hell; an unlikely scenario – though you may have identified a pricing or performance differential that sets your business apart. That said, if there are already successful competitors in your chosen market, at least it means a demand exists for it.
Here are tips from experts on handling competitions:
Establish a niche, and avoid getting involved in a ‘race from the bottom’ with competitors who will try to do what you do more cheaply.
According to Matt Fox, Co-founder of Snaptrip, “Focus on how I can make the most significant and impactful business possible for the sector I’m trying to operate in.”
Customers are usually persuaded to leave existing suppliers if you can demonstrate a competitive advantage.
2. Rapid growth
You have managed the competition very well and business is starting to grow, just when you think you have weathered all the storm there is to face, another cloud begins to gather- How do you manage your growth?
The transition from start-up to fast-growing enterprise is often one of the biggest ‘success’ challenges new businesses face and yet it’s often not given the same consideration as, for instance, worrying about financial challenges that may negatively impact commercial progress.
Planning for growth associated with success is crucial to future success and should form part of your start-up strategy.
Martin Campbell, MD of Ormsby Street: “Make sure the business was structured for growth… what works when you are small won’t necessarily work when you become bigger”
Incorporate growth plans into your start-up strategy right from the outset.
3. Nurturing talent
“Delegate early and trust others.” – Tim Fouracre, CEO of Clear Books
Another side effect of rapid expansion is the need to find and hire new talent to help tackle the startup’s growing needs. Even if you like to think you can do every job in your company, it is important to start delegating early on.
Recruiting top talent may sound like a bit of a luxury in the early days but if it’s mission-critical, it soon becomes a priority. The need to recruit the right employees in a short period of managing growth can put enormous strain on a business.
The pressure to hire can new staff can push a startup into hiring people who might not share in the ethos of the company and cannot move the business forward. These people end up becoming a clog in the wheel of the company.
It is therefore expedient to tackle the need to maintain the same level of shared purpose across the business head on by making ample provisions to hire people that will fit into the company’s culture.
According to Guy Blaskey, Founder, and Director of Pooch&Mutt, “The person running the company should be able to do every job in the company, but they should employ people who can do it better.”
4. Keeping up
It’s important to anticipate upcoming opportunities and to strive for innovation but stay close to your customers’ needs and don’t get distracted by new markets or technologies that lead you away from you niche.
Fortunately, it’s easier and more cost-effective than it ever was to invest in the tech you need to deliver you proposition to your customer base. Cloud-based services and mobile access enable collaborative, multi-site opportunities for communicating with colleagues and clients alike, and mean that big brands and tiny startups can operate from a level playing field – from a tech perspective at least. Patrick Pulvermüller, CEO of Host Europe Group said:
Focusing on what your customers need and how best to deliver that in line with your business goals will ultimately lead to success.
5. Staying afloat
Businesses aren’t automatically worth more money just because they’re a year or two older – you’ll need to reach some milestones before you can expect an increase in valuation and successful financing.
You can seek advice if you don’t know how to set or achieve milestones. An early milestone may be that you’ve removed an element of risk – possibly by hiring some key talent, overcoming a technical obstacle or trialling your product with a group of customers. Once you’ve proven your business model works and you have a plan to scale up your processes, you can be more confident of securing finance. Log your predicted milestones and keep track of progress.
Try to conserve you cash by making the right decisions at the right time – there’s no point hiring lots of sales and marketing people if the company is still in beta test mode. However, once your business model is validated, you’ll need to be prepared to commit your capital resources to bringing in business.
It’s a tough call for first-time CEOs who need to find the balance between guarding resources and investing in growth.
According to Claire Moran, MD of The Forge Public Relations:
Instead of panicking, take a logical look at what you can do to move things forward and seek advice where necessary.
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