The success of a new startup depends much on some of the early steps founders have taken. The CEO of TRUiC, Nagabhushanam “Bobby” Peddi says that entrepreneurs who are talented in a field they have a lot of passion for, come in their thousands to learn more how to better plan and run their businesses. The TRUiC group of companies just recently breached the 1M traffic mark per month, in highly targeted visitors who are frantically looking for great startup tips.
According to angel investor Joseph Laziness (MBA): “We look closely at a few basic things to ascertain the level of organization entrepreneurs have before investing. And yes, valuation is always affected by better organization”.
Here is what entrepreneurs need to think of during the early stages:
- Have a plan.
Starting a company is challenging. There is a lot of information on the internet that can make it overwhelming so it’s important to come up with a good plan. It’s probably safe to say at this point you have an idea of what type of business you’d like to create. The question is how do you get there. What is your goal and what do you need to get to it? Are you opening a non profit with a mission? Do you have a statement you’re going to make with your business? You’ll want to think about the type of business you’ll be. Is there something particular you’re going to stand for? Is there an appearance you want to achieve? Do you have a partner or investor? Once you have an idea of what you’re looking to do, start thinking about smaller details like names, locations, and how large of a scale you’re looking to be on. Try to put the pieces in place in your mind and on paper so you can keep track of where you’re going.
2. Do your research.
With your plan in mind, you’ll need to figure out if you are opening a corporation, LLC, or Sole Proprietorship. What are the differences and benefits of each group? Are there any rules you need to be mindful of while opening one? You have an idea of how you’ll make money with your business, but have you broken down operating cost and revenue? If you’re selling an item, how much does it cost to produce the item vs. how much will you sell it for? How do taxes work for you? You’ll likely work with a registered agent to set up some of your business needs. Do you know where and how to find one? How do I choose initial staff? How do you get an EIN? Where are you going to set up your company bank account?
There are many places to look for these answers, one website in particular is called TRUiC (The Really Useful Information Company) has gathered resources to help you figure these things out. Be sure to take a look at their webpage: https://startupsavant.com/how-to-form-a-corporation.
You’re going to want to do research on markets for your company as well. Is it going to be based online or in a specific location? Where is it best to advertise for this business? If it is a location, where can you find the right people to do the jobs you need as well as the right customer base?
3. Pick the right people.
Employees and management can be so important to your company. Don’t take for granted someone’s good advice. There will always be things you didn’t think about or things you didn’t expect until you’ve started the process of opening. This is one reason it is important to make connections. Startup companies are a culture and career choice for many people out there and it isn’t a bad idea to take advantage of that. While you’re bringing on your staff, you may see candidates who come to start up a company and leave within two years for another company. Those people may not have longevity with a company, but they do have one thing others won’t; experience with startups. That experience can be very helpful especially if we’re talking about candidates in upper management because they’ll have seen things you can’t plan. Take their advice and tips into consideration. Make connections with other people who have been involved in a start up for the same reasons. There is going to be a lot of information flying at you, but don’t turn a blind eye to what only experience will show. Get involved in the culture and try to find employees and connections with people who have the same goals and values as your company does.
4. Plan Your Policies and Procedures.
When a company is starting out it is important to have good policies, procedures, and documentation in place. From my personal experience, a company that changes their policies repeatedly begins to look less credible to employees and management staff. It is important to make sure the documents are clear and to the point as much as possible the first time around. Try to cover all situations that could come up in regard to the document or policy. If needed, research similar companies policies who have more experience to give you an idea of what to think about. Never forget, rules aren’t created until they are needed, so try to think about every situation and how your employees/management team represent your company. This is also a way to appeal to the right employees. To give an example, if you offer a similar compensation rate and benefits package as companies you’d be in competition with, your policies may be something that makes you stand out. Maybe you have a better maternity leave policy or attendance policy. When we’re getting down to the details, these things can make a huge difference.
5. Get Started.
One of the biggest steps is getting started. Once you’ve formed your plan and done your research, take the first step. There is so much to do to lay all the groundwork for your project. Start talking to a registered agent. Start working on getting through all the red tape. Start looking for your first director. Take the plunge and invest in your idea. If you’re opening a corporation, start looking for investors. Take all the right steps in the right way because planning can only get you so far. The greatest successes only come from taking the leap.
What else can be done moving forward?
Accountant, author and coach to HNWI’s Michael Stemley says that ongoing cost analysis for new corporations is crucial. He is echoed by financial and business expert Handel “Del” Henri, who owns HH Investments. Del Henri says that once a business is running, it is crucial to review it’s costs so that savings and overheads can be trimmed down to boost profitability. Referring to the e-commerce sector.Henri says: “To prove the point here, let me use a case example I face often: simply by switching payment processors to a more affordable option, could add $2M per annum to a nationwide U.S. business”.