There's nothing more exhilarating than having a great idea for a business and running with it. But before you start sprinting, there are a few essential things that need to be in place. Here are five-coincidentally, they all start with the letter "c"-that every start-up needs in order to succeed, whether you're in software or skincare.
Your company may save the world, but without adequate financial backing, it won't get far. Sorry; it's just the reality of business. Crunch your numbers, know how much is coming in and out, and stay on top of it. (Or get someone who can do it for you; see the Virtuoso of the Almighty Dollar below.)
If you're not one of the lucky few with VC funding, it's time to strap on your boots and sell, sell, sell to anyone who might be interested in investing in your business. I started VerticalResponse in 2001 with a combination of my personal savings, a few credit cards and investments from close friends and family. I set goals, met them and got more money. Raising capital might not be fun, but without it, you're toast.
Yes, you started the company and yes, you probably did everything in the beginning. But at some point, you need to bring on board colleagues who can step up in areas you're not so great at, and can tell you if that idea is gold or garbage.
Make sure you have the following types of people on your team either full time or your go-to:
A Tech GuruSomeone who is the be-all-of-end-all when it comes to software, apps, IT and other high-tech stuff, the guy (or girl) you can rely on when your website crashes at 3 a.m. Many companies rely on part-time folks in the beginning who are "on call," so to speak.
A Virtuoso of the Almighty DollarYou didn't start your business only to watch it go under, so have someone who knows about the ebb and flow of cash, tax planning and all things having to do with a decimal point and lots of zeros. When I started, I got someone to do my Quickbooks for me on a monthly basis, which worked fine until we got big enough that we needed to keep a daily eye on things.
A Heavyweight Sales and Marketing ChampionYou're not going to get very far in the ring if you don't have someone who knows how to get your product/service into the marketplace (or into new ones) and sell it through. If this isn't your forté, I'd suggest getting someone in the door on more than a part-time basis.
The Coolest Executive Crowd You've Ever MetOkay, so you can't really hire this, but it's important nevertheless. Find other entrepreneurs you can bounce ideas off of, get feedback from, brainstorm with and introduce you to new connections. If anything, sometimes it's just incredibly satisfying to blow off a little steam with someone who knows where you're coming from.
I'm assuming you already have customers, but how do you avoid being complacent and attract new ones?
When VerticalResponse first started, our focus was on providing e-mail marketing tools to small businesses. But over the years, we've grown to offer more tools like social media, event marketing, online surveys and postcards to capture customers who needed more than e-mail marketing.
You can identify what your customers want and get the word out with a bit of help from technology. Send an online survey to find out what they want - maybe there's a complementary product or service that you can offer to fulfill that need. E-mail marketing and social media are great for entertaining new and old customers and enticing them with exclusive promotions and content. And location-based apps like Foursquare and Loopt can put you in front of new people in your area.
It doesn't take a rocket scientist to know how important it is to understand the competition and their strengths and weaknesses (which may change over time). Your competition also forces you to stay on your toes and ahead of the curve, and can help spark new ideas on how to better run and advertise your business.
Make sure you know:
- What areas of the market do your competitors dominate?
- How are they positioning themselves?
- What available capital and resources do they have? Are they growing?
- How is the quality of their product/service compared to yours?
- What "holes" do they have that you can fill with your business?
One way to keep track of what your competitors are doing is to set up a Google Alert with their company name. You'll get e-mails with their up-to-the-minute mentions online. You can also use a free online tool like TweetDeck and track their company name so you can see what people are tweeting about.
Another trick is to play the role of "customer" from time to time. See it from their point of view. And think open mindedly about why they would use one product or service over another.
Everybody's talking about how having an engaged community is important, but where do you start? Here are some tips - just remember that building a community takes time, so don't expect anything to pop up overnight.
Have a "town square"You need a place where people can socialize, just like the old days where everyone in town gathered around the square. It could be your Facebook Page, a blog or a combination of multiple "meeting points."
Reach out to them firstYou can't expect them to engage with you if you don't take the first step, or two, or five. Show your appreciation, stay in touch, ask for feedback, listen. With all the technology and tools out there, it's easier than ever to do this.
Go above and beyondPull strings, do favors, hold their hands and be attentive, and your customers will never hesitate to boast about all the special treatment they got - and they'll keep comin' back for more.
Get personalGet to know your customers personally. Nothing beats one-on-one interaction, even in this digital age. Whether it's organizing a local event or following up personally via e-mail or social media, it'll make you stand out from a sea of faceless brands.
What other essentials do start-ups need? (They don't have to start with "c"!) Please share in the comments below!