After doing an extensive analysis of the key elements for starting up a successful business from scratch, I had jotted down several points that could help me in making decisions while starting my business. Then I just felt it would be a nice idea to share the key points with everyone and also I could get some more insight about running a start up from the readers. Here are the key things to consider before you decide to start your business from scratch:
1. Start from your cupboard
If you are not starting from scratch, chances are you are heading for disaster.
2. Focus on a niche
Don’t try to be everything for everyone neither should you try to enter a saturated market. Target a specific market with needs which may not be met. This can be instrumental in helping you become market dominant in future. Better to be a market leader in a small business segment, than being a small player in a big business segment (who knows when you’ll get wiped out of competition).
3. Think of a business which can scale big (think big)
It should offer you enough scope for future growth.
4. Assess the existing players
Take a look at existing players. Find out their way of doing business. Try to find a segment of the market that is under served. Evaluate how your or your team’s skills and resources together can provide a better product / service.
5. Assess the investment / operational capital needed
Start with what funds you have and what additional investment you can put in to make the initial profits. Don’t use Other People’s Money (OPM). You can self-finance your business through your credit card or personal loan. Don’t go to the Venture Capitalist until your business has achieved solid revenues. The chances that a VC will fund your start up are one in hundred. A business which has established itself as a profitable one adds credibility when making the pitch, in future.
6. Find the right people
Don’t go it alone. Business is about people. Recruit the right team. Neither should you go for a partner unless his/her skills can really complement yours.
7. So you need a business plan
A Business Plan Doubles Your Chances for Success, Says a New Survey.
8. Be Target Oriented
Rather than letting your business take a random course over time, set specific, mesurable targets and work towards them. Setting specific targets helps you focus your energies effectively and thus get better results. Chances are, you’ll exceed your targets almost every time. Stay informed about the latest developments in the industry and government / regulatory body’s policies and incentives.
9. Be Unique
Differentiating your business from the crowd adds uniqueness and value to your brand. IBM and HP are two gigantic competing companies, but you’ll see in what ways they differ if you take a close look at their operations. Both have their own defined value propositions in selling their products and services which appeal to prospective clients who have different types of needs.
10. Make profit from day one
There is probably no better way to keep yourself motivated. If you can afford it, put every penny back into the business.
There is nothing like a wise move. If you can beat competition through strategic moves, you can stay on as the market leader with very little effort.
A business should have gradual growth. It can't bump from somewhere small to a big-time position in the market. Irregular growth pattern might signify rash decision making which can prove dangerous over time. So be patient until it reaches the peak level from where it'll start to look great. In short, wait till the inflection point.
13. Have an exit strategy
Though it might be a business which you’ve given your life and soul to, having an alternate business plan and an exit strategy is essential. Successful entrepreneurs do not essentially stay with their start up for the entire span of the business. Exiting at the right time can prove highly profitable or help avoid losses. An exit can happen in the form of selling or merger. It gives you incentive to get started with your next Big venture!