RUNNING A START-UP BUSINESS
SOME QUESTIONS TO HELP AVOID THE MOST COMMON MYSTAKES.
In the last two years, I’ve worked as a marketing consultant for start-ups during their pre-launch phase and in their first 6 months on the market. Companies, or better yet embryos of them, mainly from the lifestyle sectors, are all animated from the instinct to do something different. They have given me the chance to get a privileged point of view on the evolution of new business.
Independently from the first motivation which pushed the entrepreneur to start the venture, some factors influence the business related to the attitude of the founder to choose the main problems to solve.
- THE IMPORTANCE OF THE BACKGROUND OF THE START-UPPER.
Entrepreneurs with sales backgrounds have a “market approach”, typically very far from the approach of founders with high technical skills (like engineers or chemists). The first are usually worrying about distribution, negotiations, prices and so on, worrying less about production and the upstream phases. On the opposite side, people with high tech-background oversee every detail about the production and the development, considering marketing stuff and commercialization a second-step of their business.
Even if this generalisation is extreme, it isn’t so far from reality, ‘cause it’s an ancient mind habit to see what we already know.
- FOCUS ONLY ON THE PRODUCT.
This is very common in many cases linked to the previous factor.
Not acquiring such importance to supply chain, back office operations, or distribution, the risk is to deliver a good product in a bad way or not make it available for enough clients. Adjustments to the flow are normal; as normal are reviews to the business plan nevertheless investing the most part of the budget just on the product, relying on a good product will be enough for the clients, is very dangerous.
- AVOIDING FEEDBACKS
In many cases people avoid to face other opinions and above all negative feedback that could help to correct and enhance the product/service before the launch. In some cases, entrepreneurs don’t completely test their innovation maybe to avoid changing their minds or to step out their comfort zone. A lot of people fall into the trap of creating a product or a service for themselves, not for the others precluding themselves and their company to develop a successful product.
- LACK OF MARKETING OR INCOHERENT COMMUNICATION
This is very common. Even if everything started from a new brilliant idea of a product or a service without marketing it’s quite invisible.
Clients haven’t an easy or spontaneous way to know about the existence of the start-up and its innovation, and moreover clients are saturated by messages and communications on-line and offline. Marketing is the access door to the company world. Images, messages, website, social pages are the first things a potential client sees and these elements have to be coherent to be effective. This means to work on branding. A new product is just a thing, a brand is a new world which involves the user.
- UNEXPECTED COSTS THAT APPEARS AT THE WORST MOMENT
All the factors cited above can generate in every moment unexpected costs. Costs of developing, marketing or distribution frequently related to the less familiar phases to the entrepreneur can be wasting in part the available funds. Usually the result is a deep review of the business plan and a retouch of the launch date. In the worst case the undervalued costs can preclude to go-to-market.
In this quick classification I didn’t mention the case a product or a service which doesn’t solve a market need fundamental condition for a company to exist, and a business based on a totally incorrect business model. Just to simplify the topic, let’s concentrate on the case in which a start-upper has an amazing idea, there is a valuable market and there is a coherent business model.
Starting an activity means facing something new daily. The entrepreneurs’ to do list is enriched more every day and so strictly connected to the ability to proceed is the ability to decide which problems solver first, and decide how.
THE IMPORTANCE OF QUESTIONING
What I’ve learned is that the best entrepreneurs are not the best skilled but are the ones who ask themselves the right questions about what they have to manage. They try to have a complete picture of a business and look for experts for the parts they don’t know and this allow them to better define the vision, the next steps and moreover to increase their network for running the business.
Just as little help for start-ups can be to ask themselves some questions to get more to base their decisions. Here are some of them:
- How many parts my business is composed of? How many phases there are from the concept to the deliver to the client?
- Do I have an idea of the cost and duration of every phase?
- Do I know somebody that I could ask for tips for the phases I don’t know?
- Who is my ideal client? How can I organise my communication in order to get in touch with him/her over and over?
- Have I got some feedbacks about my product/service from some potential clients? What do they think about it?
- Am I concentrated on the product/service or on the entire business?
- Am I selling a product or giving people a new concept?
Push yourself to look beyond what you already know to get a complete vision of your business and it will be more concrete, visible and effective.
published at http://www.medium.com on April 19, 2020.