Thoughts on how to start a startup
Entrepreneurship is always one of the toughest careers to select as a profession. The task of establishing a new company from its grassroots is really a tough challenge for any individual with zero experience in business.
Even if one has an incredibly splendid idea, complex problems may arise at any point in time in ways that were never even imagined by the entrepreneur when they began their business.
Although there is no fool-proof plan to attain startup success, there are numerous common mistakes many new entrepreneurs make that can have severe negative impacts on their businesses.
To avoid the misfortune of failure, we must follow certain principles before establishing a startup.
Having a smart business plan plays a vital role in shaping success. A business plan serves to guide a startup in a precise direction by responding to many significant questions: what is the purpose of the enterprise, who are its customers, what is its mission and vision, what is the company's anticipated direction, what is the marketing plan, who are the competitors and what are their market shares, and what are these competitors up to?
In other words, a sound business plan regulates every aspect of a startup. Whenever the company is stuck in any dilemma, the entrepreneur should refer to the business plan for a preset way forward.
For any startup enterprise, choosing its launch date and location is highly important.
If we consider launching a startup, timing is everything. Just make sure the company does not launch too early or wait too long. Launching too hurriedly might put the entire enterprise at risk while, on the other hand, taking too much time will let other competitors take a firm grip on the market.
So, appropriate timing is all that matters.
In addition, a good physical location is essential to start any business. Setting up a shop in the right location considering the budget and the geo-position of potential customers, and the industry as a whole is key.
This location-based way of thinking also improvises the cluster concept in today's small-and-medium businesses.
Marketing and dealing with the ideal customer matters a lot. There is no set rule for making a perfect marketing strategy but successful marketing depends upon the business and the targeted customers.
A mistake we often make is assuming that we do not need to go for marketing as business will come to us automatically.
To know the customer segment, we need to do adequate market research and identify exactly who we are trying to reach, where we can find them and how they will react to our marketing activities.
Number driven and constructive research is needed to implement the right approach here. The more positive reactions received, the more successful the marketing campaign has performed.
Knowledge of how to handle finances is also a vital tool for any entrepreneur to succeed in their venture.
In the case of a startup, it is even more important because almost every startup sets out with a cash crunch.
As such, maintaining sufficient capital becomes a big challenge for them.
Besides, overspending and underspending both bounces with a negative result in case of startups.
So, arranging sufficient working capital is an immense challenge for them. Handling all these financial problems with a sound backup plan helps a lot to become successful in startup cases.
Technology has become a blessing in today's world. From the procurement of raw materials to production and delivery, technology has become an integral part of any business activity.
Marketing and promotional activities have become much more cost effective thanks to digital platforms. Monitoring, information source and data mining activities are much more comfortable through technological advancements.
Nevertheless, like many other success oriented characteristics, having drive, dedication and a serious sense of commitment is essential.
For a service sector startup, customer satisfaction must be pursued with true perseverance. Creating a "wow" factor in the customers' mindset helps build an enterprises' reputation from the beginning.
Startup owners need to be prepared to make sacrifices, give sufficient time, and face encounters bluntly if they are hungry to achieve success.
Making errors is a common phenomenon for any human being but the fundamental thing is being aware of one's mistakes and regularly working to resolve them by making smart, up-to-date choices.
If startups can do that and remain resilient when they do make a mistake, success will be within their reach.
The author is senior vice president, head of SME business, retail & SME banking at Eastern Bank Limited.