While focusing on fulfilling your dream of launching a startup, it’s easy to forget some of the key elements essential for running a successful operation. It’s so easy to get swept up in day dreams about profitability and what you will do when you reach all of those goals. Of course before you can even begin to dream you need to have a definitive strategy in place of how, what and when certain criteria will be fulfilled.
Once you have made the inception into the Business Lifecycle, You need to identify what obstacles are in place, how you can overcome these. What are your unique selling points, what mistakes have similar entrepreneurs made before and you need to create a comprehensive plan to acknowledge every threat or catalyst to your business.
We have developed some pointers that may assist with your decision making.
Take the time to find a suitable Co-Founder
Scanning your LinkedIn and Facebook groups for a potential cofounder can be a good place to start, you may also consider ex-colleagues, old university chums or you can always seek to recruit a co-founder. There are also industry meetups and networking events that you could utilize to find likeminded business people.
This is a step of your business that needs to be very carefully considered and the relationship taken into as lightly as a matrimonial agreement!
It’s easy to sell an idea to someone and for them to be enthused, their praise can even bolster your ego, but you need to ask what they can bring to the table. Contacts? Knowledge? Experience? Funds? There also needs to be a great compatibility match. Starting a business will almost always require long hours for little rewards, so it’s imperative that you and your prospective co-founders set yourselves some problems or tests, so that you can identify communication styles and hopefully decipher is your pairing would be successful.
Don’t feel bad to decline the offer of a friend to be co-founder if you don’t think they are the right person for the job. Break it to them gently and diplomatically, its’ better to hurt their feelings short term, rather than sabotage your business and end a friendship long-term.
Hiring developers using the hybrid model
If you are not a developer, hiring someone who can execute your idea should be among your first and most imperative moves. Something you may not be aware of is the use of the hybrid model in outsourcing development work. What is it exactly?
The Hybrid Model lets you hire developers through an outsourcing agent or partner. You act as a direct manager to the developer’s until their contract with you expires. You can choose to extend the contract during iteration or cancel it. Compared to hiring in-house developers, you can save money and be as flexible as necessary through this model. You can also apply this to other human resource needs that may arise while you are establishing your business. For example you could hire short term marketers, sales people, whatever skill you need to get your business underway without employing a permanent member of staff.
Protect the source code
You’re about to close a software deal when the licensee suddenly asks you to grant them access to the source code. Several things run through your head at once. Among them: you don’t want to put confidential materials at risk. What if they are used prematurely? What if they fall into the wrong hands? But see it through the lens of the licensee for a moment. They need a guarantee that they will still be able to use the software should you decide to quit the business or fail to meet your obligations.
While this is a hypothetical situation, it would be wise to prepare for such a possibility. The best course of action would be to set up a software escrow. In this case, a neutral third party — the software escrow agent — will keep the raw code, documentation, and other critical materials. It will only release the escrow materials to the licensee when a mutually-agreed-upon event occurs. This way, you can protect the source code while still gaining the confidence of the licensee.
Offer your product as a SaaS
Software piracy cost the United States $9.1 billion and China $8.7 billion in 2015. Your startup cannot afford freeloaders. Choosing the right strategy in selling your digital property is the first step to warding them off. Now that people blatantly break copy-protection and sell the results on the black market, there is something better than offering purchase-and-download product packages. It’s time for the new alternative: Software as a Service (SaaS).
With SaaS, you are also opening up a trove of benefits to your clients. There are no initial expenses such as hardware and initial setup costs. The subscription model allows them to pay only for what they use. They can end their subscription when they no longer require it. On your end, why is SaaS a good choice? To complete the transaction, clients need to enter their credit card credentials. It will be harder for some people to get past that system, bringing their chances of breaking into it to zero.
Develop an overall cybersecurity strategy
What would seem an ordinary day could be the day cyber terrorists hit your website, platform, or system. According to the U.S.’ National Cyber Security Alliance, 60% of startups and small businesses close within six months of operation because of such attacks. As you aim for sustainability, it would be smart to lay down an overall cybersecurity strategy for your business.
The strategy covers your security toolkit and the rules that guide the actions of your team. For instance, there are free or affordable virtual private networks that you can use to protect your data. It would also help to advise your employees to refrain from connecting to public WiFis if they’re working remotely and don’t have VPN.
Accept all sorts of payments
As your startup grows into a full-fledged business, you need to establish a payments system that works for both you and your clients. In the digital age, paper-intensive processes such as direct cash and check methods are not the only options. You can accept payments through a variety of methods, from debit and credit cards to e-Cash and bitcoins.
Further, it is not unusual to deal with clients from around the world these days. This event entails a new way of doing things. Look for a company that will help you move money without hidden fees. Know the details if you are going to make high-volume transfers. When sending and receiving payments from overseas, you can search for foreign exchange firms that offer preferential rates for such transactions. At the core, these companies act as a mediator between banks and consumers. But compared to banks, they are able to slash related costs and allow you to save money about 50% higher.
Invest in business insurance
As your startup grows into a full-fledged business, buying insurance becomes a necessity. If you have employees, the law requires you to pay for certain types of insurance such as workers’ compensation insurance and unemployment insurance.
You also need to look into the types of insurance that will protect your business against the risks of unforeseen events. Beware the brokers who sell a one-size-fits-all standard policy as this may cover only a portion of actual losses. Instead, consider the general liability insurance, which will protect you against claims of accidents, injuries, or negligence.
Further, you can choose between product liability insurance and professional liability insurance depending on what you’re selling. Either type will shield you against a liability claim resulting from your product or service falling short of its intended purpose/s (it happens). Then complete the mix with “key person insurance” to safeguard your company when you lose an important member due to death or extended incapacity.
Move into a managed office
Ready to pay for your business’ physical location? Before you go the conventional office route, take a look at the alternatives — the managed office and semi-serviced office market. These can offer a more flexible solution with rolling contracts, shared space, ad hoc meeting rooms, or even just virtual office solutions in the early days if that’s all your business requires. Conventional office space can be hard to get out of, sometimes a minimum of a 5 year lease is required; this can work out more cost effective in the long run but you would need to be confident of your business growth and staying power which fir a new start up can be uncertain.
Managed offices are on the rise, even in startup hubs that are notorious for their expensive real estates, such as London.
It is an exhilarating time seeing your business idea’s come to fruition and the way in which you handle these initial stages will ultimately determine the success of your company.
It should be comforting to know that many have embarked on this entrepreneurial road before you and there is a plethora of case studies, books, mentors and articles written to assist you in this journey. Take the time to grow your