We have all heard, time and again, that 90% of startups fail. But this one will work, we say. This time, I've got it right. Who knows, it may be so. Even if we are right, even if we have magic in our hands, there are threats to our mental, as well as our financial, health.
So why risk it? Why do we prefer this to the day-to-day, run-of-the-mill security our old jobs offered? We all want to be independent. We want to be our own boss, set our own hours. Granted that sometimes we are a terrible boss to work for, we sometimes are "willing to work 80 hours a week to avoid working 40 hours aweek". More than that, we are entrepreneurs because we have an idea that we are excited by. During the last few weeks of my job I barely slept, I was so excited with all of my plans for my new life. I talked to a friend about the sleeplessness, and she said she had been through the same thing. She would work her day job, then come home and put in another 6 to 8 hours. Will Shu, who started the UK food delivery service Deliveroo, encourages new entrepreneurs to work on something they're passionate about. It worked for him, in three years he went from delivering pizzas to owning a business which works in 35 UK cities and 40 international cities. We have this idea, and we want to see it succeed. More than that, WE want to succeed. I can't put myself in the camp of entrepreneurs who will sacrifice everything for glory. I want to stay happy and healthy. I can't put my life on hold. So with all of these seemingly conflicting desires, I have set off into the world of startups, in an attempt to find any factors that successful and healthy entrepreneurs share.
The first step is the idea. What is your startup? If you are anything like me, the idea will have spent a long time coming to fruition. Gradually being tweaked as research turned up new twists to designs. So, before quitting your day job and running off into the sunset, there are some useful tips to protect yourself and your startup.
- Prepare financially
I had a PE teacher who would constantly say "failing to prepare is preparing to fail". To this day it annoys me that he was right. Ali Mese, a successful entrepreneur, now suggests accumulating enough money to live on for three years, instead of the traditional one. This is to look out for the hidden costs and pitfalls of starting a company, which are many and varied beasts. However, Mese also warns about the impact a high-flying corporate job can have on your lifestyle, and you may be unaware of how much day-to-day life costs. Patronising, but thoughtful.
Another way to ensure that you are prepared financially is to use a Risk Management Framework. This allows you to quantify risks, labelling them as ignorable risks, nuisance risks, insurable risks and the real company killers respectably. The framework allows you to plan, and to look in depth at your worst case scenario. Then make sure that you are covered for it. Nobody should be losing their house.
- Prepare a good team
Ideally, everyone should be as invested in the startup's success as you are. You want people who you can trust with your creation. One mentality it is important to foster is that of working on the business, not in the business. There is a danger in sticking too rigidly to the job role assigned, as you might in a larger company.
Allowances have to be made, and compromises come to. A good team is one which will grow with you, with room to expand. The ideal team is one in which every person could be a future leader. Every good person in your team will inspire others to care about your company.
Carl Pappenheim started Spineless Publishing in 2010. His piece of advice to new entrepreneurs is to directly talk to employees in order to empower them to report problems to you. He should know, his business is now worth over £1million.
Emma Watkinson of SilkFred is a vocal advocate of spending time on not in the business. She started the company in 2011 and turnover has now reached £2.7million.
- Prepare processes
It is essential that everybody is working to the same requirements. Processes ensure that this is happening. It also is the most efficient way of removing yourself from the minutiae of daily operations, and to concentrate on what is important. As founder, for you, this is innovation and marketing. If your team can work well without you, and your company can grow without you, then you may experience the freedom and independence you've been working for. Or you could go on holiday.
- Market research
It should go without saying: Is there a market for your product? If not, can you create one? Market research is an integral part of startup preparation, and should not be neglected. Knowledge of customer preferences is vital for success.
Creating a market is often referred to as Blue Ocean Strategy, one of the best examples of this is Cirque DuSoleil. The company took the traditional idea of the circus, marketed at children, and by moving the circus into a theatre and raising the ticket price, Cirque Du Soleil created a new form of evening entertainment in the previously non-existent market: the high-end circus.
To read the full article (and to see the last four steps to success) go to https://bunnyinc.com/article/profile/florence-2346895-D2F2VSS/