Experience is largely listed as the single greatest attribute an entrepreneur can cultivate any time they begin a new path to improve the overall odds of success. While that isn’t exactly groundbreaking, the data behind the difference that experience makes is significant:
- Founders who have successfully cultivated a business previously have a 30% higher chance of success in their next venture.
- Founders who failed at prior businesses have a 20% chance of succeeding the second time around.
- First-time entrepreneurs have an 18% chance of success.
There is something to be said to gaining experience through real-life problem-solving in your business ventures, but you can save time by not learning lessons the hard way and fast-track your path to business success. Here are a few tips:
Spend Investment Capital Wisely
Again, not groundbreaking advice, but you’d be surprised that this is one of the most common pitfalls for a young company managed by an inexperienced entrepreneur. Early on, companies can be funded through small groups of angel investors, but it’s often the entrepreneur’s own savings.
If you’re fortunate enough to gain investors and raise investment capital through private funding, don’t let it lull you into a false sense of security. This influx of money can help you beef up your team to meet aggressive growth goals, but it can also help you spend ahead of need. Aggressive expansion timelines are more often than not overly optimistic, which can burn valuable resources much more rapidly than a young company can afford.
Most industries already have formulas to work through this, so do your research. Whatever money you end up asking for should be completely planned for and put to good use.
Don’t be scared to invest in your team, but focus on A-players who can play multiple roles early on. Choose quality talent over quantity.
Protect Company Assets
If you’re inventing, intellectual property can be invaluable. Spend early and often on protecting your property. Legal can be invaluable in the product-based business and even in service-based or knowledge-based industries to protect intellectual property.
If you’re attempting to acquire capital, you want investors to feel secure in the fact that their money is going to be relatively protected and that the capital is going to good use. Be prepared to know if patents or trademarks exist and who owns what. Giving investors an understanding of what and how you’ve reached product-market fit is important as well.
Spend your money on attorneys who can provide protection to company assets. Hire a lawyer to draft a solid client contract- poorly worded contracts will cost you.
Spend Time Creating Revenue-Driven Solutions
Services or technology that easily demonstrates ROI in a direct manner is low hanging fruit for young companies. Plenty of companies succeed by focusing on solutions that drive savings to their clients, prospects get more value (and buy more frequently) when solutions are revenue-driven.
Understand Your Timeline
When working on bringing transformative technology to the market, it’s important to remember that often, this solution is disruptive. This can create a situation where users have to adjust their systems and processes in order to experience the best results possible.
This is challenging- people don’t like change. No one does. But big and meaningful change takes time which can present a challenge, as clients won’t experience results immediately. If your business is built around disruptive tech, it’s important to set expectations at both the client level and the boardroom level. The potential for reluctant transition with clients is absolutely there and you must set reasonable expectations at all levels about delayed returns.
These are not easy conversations to have as they’re difficult realities to accept when real dollars are being spent and you’re burning through capital every month.
Invest In PR Early
Many founders consider public relations and media outreach to be fluff- something that is a lower priority until you have a bigger budget. However, securing placement in reputable publications when you first hit the market can help a young company in a number of ways. Targeted exposure is extremely effective in getting the word out, driving an initial wave of leads.
Articles in respected publications can enhance buy-in and help prospects convince stakeholders to take a leap with new tech or a new process. Press can help substantiate timeliness, but more importantly, it can help educate prospects.
Build Outside Relationships
Building relationships with third parties will allow you to establish relationships that can vouch for your work. This provides ongoing value for a young company and its emerging technology or services. This can take the form of validating success through white papers, third-party research, or case studies.
Have Reasonable Expectations
People assume that launching a tech company brings overnight success and riches, but it doesn’t typically work that way. Most things of value take time and it’s incredibly important to remain resilient and flexible. Learn quickly from failures and mistakes and then regroup as necessary to press on towards success.
Building a successful business is incredibly difficult. By taking your time, doing your research and starting from the beginning can help you get your startup off the ground. Make sure you do the proper steps to plan the remaining steps to launch the company and prepare yourself so that you’re ready to raise money.
Without proper financial planning, your business doesn’t stand a chance. Make sure you’re network is on point too- you’ll want to surround yourself with the right people. It’s incredibly important to find people who can help you in areas that are not your strongest point of expertise.
Placing your business in the best position to establish a steady clientele will help to grow your startup. Launches are never perfect- you should always prepare for unforeseen circumstances. Proper planning is absolutely crucial to help you clear and anticipate any hurdles.