Starting a company isn’t easy. You might have decided to build a startup because you loved the industry, product or service, or perhaps you wanted a change in your life. Once you get deeper into running your business, you’ve likely realized it’s like raising a baby, and, similar to raising a child, it requires all your attention and care to make sure it succeeds. All of this can be overwhelming, and some of the essentials can get lost in the shuffle.
As the founder of my own company, I’ve seen these challenges firsthand. That’s why I’ve compiled this list of five things entrepreneurs need to know before embarking on their startup:
1. Have a clear ‘why.’
Knowing you want to create something on your own is one thing, but solidifying why you are embarking on starting a company is another. Without a strong “why,” you won’t be able to give others a reason to become a part of your vision (other than a high salary). I’ve seen countless startups fail to solidify the “why” before recruiting, and, as a result, they blew all of their seed money away.
2. Know the stages of your industry relative to your business.
A new business is like a small child. As your business matures, keep in mind the stage your industry might be in. Are you entering into a market where the economy is strong and the demand for your product or service is at an all-time high? Or, is it a dying industry? Businesses go through stages and seasons, and knowing the context of where you are in relation to your indsutry gives you a bigger picture of where your company needs to go.
3. Don’t over-leverage.
I’ve also observed many businesses try to grow hyper-aggressively without a clear idea of what it really takes to go into a new market, expand into larger offices, hire employees, etc. Often, new entrepreneurs have a fantasy that one “big thing” — such as a marketing campaign, expensive agency or huge influencer — is going to solidfy their place in their industry.
In my experience, it takes multiple oppurtunties to establish your business. Think of your startup as if you’re constructing a building: During the first few years, you are building your foundation, brick by brick. One huge moment will not skyrocket you to the penthouse floor. Make sure you have the resources to continue growing, and don’t rely on one shot. I believe a quote by Tony Robbins sums it up well: “If you’re not growing, you’re dying.”
4. Focus on customers, not funding.
Too many times, founders only seek funding round after funding round. Before you go into your first funding round, you need to understand your customers. This allows you to create leverage within your company, and every single dollar or cent that goes into your company during investment will help expedite your growth. Sometimes founders take on funding before learning their market, which makes the process more and more expensive.
5. Know your role.
Knowing whether you are an entrepreneur, creative or integrator type in your business will help you build an effective team of people who are stronger in the areas where you’re weaker. For example, someone who is more of a visionary or creative might not get straight down to the numbers. A more entrepreneurial type, on the other hand, might struggle to develop a full vision of how far the company can go without hiring someone who’s more creative and can see the bigger picture. The integrator is another critical component, as they can help piece bits of information and other people together to build an amazing company. Finding a balance and incorporating these three perspectives is an important part of starting your business. Determine where you land, and start working on building the rest of your team.
As you can see, there’s a lot to consider when your new business is just getting started. But if you can determine your “why,” understand the stages of your industry, avoid over-leveraging, focus on your customers and know your role, you’ll be well on your way to building a promising startup. My last bit of advice would be: The only way to be successful is to just start. Don’t overthink it.