The thing about starting your own business is that there’s no recipe book or to-do list to follow. Everything depends on the industry, product/market fit, and even your style or philosophy.
While there is no universal recipe for success, there are a few areas that are easy to miss or dismiss that become critical down the road. Given the minimum survival rate of startups, it only benefits you to do as much due diligence and upskilling as possible if you are venturing out on your own.
1. Not investing in organisational design and culture
If you ask entrepreneurs what keeps them up at night, many of them will mention people management and culture as the source of their worries. There are 660,000 new businesses popping up every year in the UK, with 54% of them failing within the first 3 years.
According to a recent study, the main reason for failure is cited as the lack of leadership skills by the management. The trap that many new business owners fall into is getting comfortable working in a small group and not planning for how people management and communication should be transformed as the business scales.
If the management does not have a robust and shared vision of their culture, the newly attracted talents are soon going to be confused and frustrated. Moreover, your ability to attract and retain highly desirable talents is crucial not only to the furtherment of your operations but also in continuously inspiring confidence in the current and prospective investors. So show them (investors, employees, customers, etc.) that you, the leader, is serious about building the best culture for your organisation by investing your time, money, and effort into creating a haven for intelligent and ambitious professionals. For instance, obtaining a qualification in people management by taking CIPD (Chartered Institute of Personnel and Development) courses online could send a strong signal to important stakeholders regarding your commitment to creating a sustainably high-performing culture for your business.
2. Not having a documented business plan
Documentation is not something most people are good at – but it could be the only difference between defeat and victory. While it’s tempting to brainstorm with your founders or team and share ideas verbally without worrying about documentation, so many ideas and decisions could fall through the cracks if not properly documented.
Not only that, having an officially documented business plan and strategy is going to help articulate the value and potential of your business far and wide. It’s also a requirement for most of your funding options.
Your business plan is going to be living, breathing document – it should serve as the Bible for where it’s headed for the next foreseeable future, assisting you and your organisation in making the tough decisions and tradeoffs inherent to new businesses.
3. Not investing in marketing early enough
Today, one of the most important metrics for startups is user acquisition rate. Thus, creating a product launch path and ramp up plan should be done almost simultaneously with building your platform/offering.
Startup success is ultimately about achieving that product-market fit – whether what you are offering satisfies some sort of gap or demand currently unfulfilled in the marketplace — so thinking about your value proposition and how it should be marketed as early as the brainstorming phase will help you refine your offering throughout the process to ascertain a high product-market fit.
Also, you’ll be able to attract early adopters quickly to test your hypotheses regarding your business’ value-add and iterate quickly. So do not think of marketing or sales as an afterthought; it should be seriously considered almost as soon as your business idea is formed.