Top tips for startup entrepreneurs
Being an entrepreneur is about more than just starting a business. Setting up business in an existing market has been done many times before. It comes with its own risks and challenges, but you’ll be able to find some good advice and guidance to steer you down the right path.
Entrepreneurship, on the other hand, involves blazing a new trail in an emerging market. It involves unique challenges and advisors will not have any direct experience to share. While it can be an intimidating process, it’s also very exciting.
Having recently established APARI - a tax software company in the new MTD space - I have some first-hand experience as an entrepreneur. I also used to work with one of the Big Four consultancy firms, helping other entrepreneurs start their own businesses. Here’s some top tips for startup entrepreneurs to help make your business a success.
Develop the Right Culture
Big companies talk a lot about the importance of the right company culture. Setting the right culture, however, happens from the outset and is led by you, the business owner. The right culture will help set the direction of the company, encourage the right kind of ideas, and attract the right kind of people. So what kind of culture do you want?
I recommend starting with your own strengths and limitations. What are you good at? Where do you want to take the company? Are you a big picture thinker or do you prefer to get stuck into details? What do you find difficult?
Having a diverse team can help you spot things you otherwise wouldn’t, support you with the things you are not as good at, and provide interesting ideas and inspiration. Too many businesses hire based solely on academic or work experience, but overlook people who may be a perfect fit but who don’t have a strong educational background, for example.
A startup team also needs to be much more flexible and adaptable than those in more established businesses. People may need to take on more than one role or be prepared for their role to change over time. The right people will be comfortable shifting between roles and responsibilities, and share your belief in the direction of the business.
With your initial team assembled, make sure to take the time to listen to their ideas. There’s no point having an inspiring team and then shutting down conversation. However, it is important to remember that, despite having a diverse team of talented people with lots of ideas, the buck still stops with you. When things go right, you benefit; when things go wrong, you are responsible. So you need to take the lead and make tough decisions from the perspective of what’s best for the business.
At some point, you will inevitably have to take a step back from managing every aspect of the business. This can be hard for entrepreneurs - you may have spent years developing the idea and the business and it can feel scary to take your hands off the reigns. But if you have a solid, trusted team of talented people who believe in the business and understand the direction, it will make the process much easier. This is why culture is so important to establish from the outset.
When considering new hires, refer back to your skills and limitations to find someone who compliments your strengths and can mitigate some of your weaknesses.
Apply Your Experience
As an entrepreneur, you almost inevitably have a mix of skills and experience in business and/or related markets. That experience is vital when starting up a new business but it is only useful if you are confident in yourself.
I have learnt over the years to trust my gut, for example. It has led me in the right direction more times than not. But it isn’t infallible and gut feelings still need fleshing out. That’s why I always try to back up my gut feeling with at least three good, rational reasons/facts. If there is a gut feeling, rational reasoning, and no better ideas or approaches, then I know it’s an idea worth pursuing. Consider how you best make decisions and create a process for yourself that helps move from inspiration to action.
Good ideas also come from your team and I always encourage entrepreneurs to listen to suggestions. Never shy away from crazy ideas. Bounce them around with the aim of moving them towards a realistic plan. Then you can then research the risks and pitfalls, quantify and weigh the pluses and minuses, and become aware of the potential hurdles. This is where speaking to experts becomes incredibly useful - while they may not have direct experience of your market, they may understand the risks involved with your idea, helping you to better plan.
There is always risk and things will always go wrong. It’s not a matter of ‘if’ but ‘when’. While it is important to stick to your overall vision for the business, you also need to have a Plan B...and C and D. Think ahead and anticipate problems. If a hurdle comes up, you can then quickly work around it or switch plans to mitigate the issue. Thinking ahead will also help mitigate investor concerns and allow you to demonstrate a clear vision and approach to get there. This roadmap helps inspire confidence and keeps you in control.
Find the Right Investors
At some point you will likely require investment to grow. Many entrepreneurs make the mistake of thinking that investors only back proven business ideas. The truth is: investors back people. If you are confident in yourself, your idea and your team, you will inspire confidence in the investor. Create realistic targets and deliver on what you say you will - then you will earn the ongoing trust and support of your investors.
It’s also important to get funding at the right time - preferably before launching your product or service. But don’t simply take the first offer that comes along. Investors can be like buses: you wait for ages and three turn up at once. Instead, find red lines that you aren’t willing to cross and stick to your guns. Gaining millions of investment money might sound great, but if you lose control of the company you will quickly lose interest and chances are the company won’t be nearly as successful (if it succeeds at all!).
If your idea is good and the investor knows it, you can be a bit pushy. This shows confidence and helps you find the right investor - someone who will support you to achieve your vision, whether through funding or other types of support. Bad investors will always try and squeeze more equity out of you. Don’t put up with it. Know your figures and be confident.
Find Someone to Lean On
Starting a new business in an emerging market is tough...really tough. It’s easy enough to say 'be confident', 'trust your gut' and 'stick to your guns', but the startup world can be a lonely place. It’s not always possible to reach out to people or maintain your confidence and thick skin.
Finding a trusted number two can offer a wellspring of support and encouragement. They can be the person to sense-check your crazy ideas, they will maintain belief in your idea even when you are full of doubt, and will be there to share in both successes and setbacks.
There is no ‘right’ way to achieve your business goals, especially in emerging markets, there is only your vision. A good number two will bring you back to that vision when you hit a brick wall. There will always be hurdles and stumbling blocks - failure is not being able to surmount them. If you can find a way around your hurdle with the support of your number two, however, you have an opportunity to grow and develop the business.
My final parting tip is: Never stop learning. In the startup world, knowledge really is power. When you hit a hurdle, increase your knowledge to solve it. When assessing ideas, increase your knowledge so you can accurately weigh pros and cons. When meeting investors, seek first to understand them.
Being knowledgeable about your business, market and industry helps you earn respect from your team, partners, investors and suppliers. So, never become complacent and never stop learning.
I wish you all the success in your business venture!