Advice on how to startup a business has been written about almost every day and the advice follows the usual steps.
1. Come up with the business idea
2. Research the market for the product or service
3. Write your business plan along with your forecasts for the numbers and cash required
4. Decide your exit strategy
5. Form a company
6. Decide on your team
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7. Develop the product
8. Raise the funding
Some of the order of steps may be blurred but generally this is the advice.
There’s a lot to get on with and some of this may take months or longer. Even coming up with the business idea in the first place can be a struggle for some.
So, here’s my practical tips for those of you thinking about starting a business.
Tip 1 – Double up on time and money
Every step will take longer than you ever imagined from getting appointments to meet people to talk about your idea to raising the funding. Always double up the time and money you think you need to get started. If you’re leaving a job to start a business, make sure you have sufficient money saved up to survive for a year. This is not easy and why many people stay in jobs and try to set up their business in their spare time.
If you’re repairing a business plan, work out the worse case scenario for funding needs.
Tip 2 – Get support from family and friends
You’ll be amazed how many people are willing to help when asked! They can be great sounding boards but be careful that you don’t actually involve family and friends in the business, without careful consideration and written agreements, especially if borrowing money!
All the family and friends will get you only so far and at some point you will need more objective views.
Tip 3 – Get professional support
Talk to an accountant and a lawyer about how to set up the company and raise the funding. You can even sound them out about your idea. Make sure you get recommendations for such experts. Some good accountants have experience of fund raising or may know business angels who may want to invest into your business. If you want to patent a product and hire a team or staff, legal advice is critical. Do follow the experts’ advice. It will save you money and hassle in the long run.
Tip 4 – Get a mentor
Maybe the best tip is to get a mentor. A recommendation will be ideal but with LinkedIn and other web resources, you can get in touch with people who have done it before, are happy to help and can give invaluable advice. Best of all, they can be objective in assessing your business idea and business plan.
Tip 5 – Get out and do it!
All the planning won’t make a business and at an early stage you should go out and get the business going. There is a big difference between activity and being active!
A lot of the successful businesses got started by someone who went hell for leather but be careful and do your homework first since one in three startups fail within the first 3 years.[Contributed by Asoka, an Independent Finance Director and Management Consultant based in London. He works with growing companies as their part time Finance Director and is the Founder of AKCA Consulting, which helps companies improve their financial health.]