The initial phase of a startup is often the most stressful. It’s a time when your business is still fragile and where every mistake can be a fatal error. There’s no market interest for your brand yet, so no customers flocking to your brick-and-mortar or eCommerce store nor are there any venture capitalists or angel investors knocking on your doors to back you up. Surviving the early days, however, is key to staying in the game long enough to reach your break-even point and start making money. Here are six tips that will help keep your startup in the running:
Get a Good Co-Founder
Statistically speaking, businesses have a higher probability of surviving their early days if they have a good co-founder on board. Startups with a balanced team, mainly one founder focusing on the technical side and another focusing on the business side, are bound to raise at least 30 percent more capital. In addition, they have almost three times faster user growth and almost 20 percent less likely to scale too early, which almost always eventually leads to a catastrophic failure.
Use Your Fundraising Time Wisely
While essential, fundraising can be a huge productivity zapper. Aside from raising capital for your startup operations, your secondary objective should be to absorb as much information as you can. When you host a fundraising campaign, focus on talking with investors and building a relationship with them. Investors and venture capitalists don’t like suck-ups and those who are just interested in talking to them to get to their money. They want people they can trust. Once you establish rapport with investors, the capital and connections will start pouring in.
Prepare For the Temporary Failures
If you look at any startup scene, you’ll notice that many of the startup founders and teams are impressively smart and competitive. They’ve thought about every aspect of their business and the market surrounding it, down to the most minute detail. As you think about it, you’ll realize that it’s not a matter of who is smart and who isn’t. It’s a matter of who can ride out the storm. Expect to encounter countless scenarios of failure and rejection from customers and investors. Being persistent means taking the hits and getting back up to fight another day. The longer you stay standing, the more opportunities for success you’ll get.
Hire the Right People
The early days of your business is when cash is limited. You don’t want to be paying salary plus benefits on people who you don’t need yet or at all. Every business is only as good as the people operating behind the curtains. When hiring, prioritize who you bring into the workplace. Sit down with your co-founder and start hiring people who can help you create and refine products/services, build and market a brand, and manage cash flow. Roles to prioritize include accountant, product manager, and software engineers to manage your digital footprint.
Focus on Surviving, Not Scaling
Most business owners and entrepreneurs attempt to grow and scale their enterprise faster than they should. Scaling your business is a strategy that requires the right timing. Scale too quickly and you’ll end up distributing your limited resources too thin while scaling too late could lead to relatively slow growth. Make sure to focus on surviving and creating a sustainable business model first.
Survival in the business sense essentially takes the same level of effort and the same key factors as you would while trying to survive out in the real world. Carefully planning and preparing, learning and doing your research, and asking the help of other people who have the expertise and connections are all effective moves to stay in the race.