You’ve cut the leash and gone out on your own with a startup. This is an exciting time, and also a scary one. You’re suddenly responsible for not only your own success, but also the success of everyone working for your company.
But don’t panic. Here are the seven most important things for you to remember during those first years of your business life span. Apply them well and watch your company grow.
#1 Have a Six Month to Income Timeline
One of the biggest rookie mistakes is to start incurring the expenses of a business long before income is a possibility. It can be tempting to jump early into a great idea, but it’s rarely smart. Instead, do low-cost groundwork to get all your pieces and parts together…and then crank the ignition and get things started. Most experts recommend a maximum gap between opening and first real income of six months. “First income” isn’t the same as “first profit,” but it’s still important to get the cash flowing in both directions.
#2 Manage Cash Flow Like a Miser
Cash flow is king to beginning startups. Startups don’t have the reserves to fall back on during a slow season or even to factor some payments against income. This can force you to lose vendors or borrow at high interest rates just to meet basic expenses. Instead, manage your cash flow — current and projected — carefully at all times. It’s a little extra work, but it saves effort and expense in the medium and long terms.
#3 Sharpen Your Saw
Entrepreneurs are busy doing at least three jobs officially, plus picking up slack where needed. Despite this, it’s vitally important to make room for three things in your schedule:
- Exercise daily for 20 minutes. This much produces up to three hours of extra productivity in the rest of your day.
- Rest and relax, including quality time with friends and family. Otherwise you forget why you’re doing this in the first place.
- Learn something relevant to your startup every week, if via no other process than reading a relevant book for 20 minutes each day.
If you’re not growing, you’re shrinking. It’s impossible to grow without caring for yourself and learning a little every day. Make this as important as the most vital client meeting or training your most exciting new hire.
#4 Investigate Every Source of Funding
Most startups happen with personal savings, borrowing from friends and family and credit card debt, but there are other ways to get the money needed to get your enterprise rolling. Small business loans (either through a bank directly or via SBA assistance) are helpful but hard to qualify for, and angel investors aren’t nearly as common as Shark Tank might suggest. Online lending, especially lines of credit, is a lesser-known but helpful source of on-demand funding.
#5 Build the Best Possible Team
This seems like a no-brainer, but most entrepreneurs are even less experienced in staffing than they are in other aspects of business. Build the best team you can, using a handful of best practices:
- Wait for the perfect team member, even if it means passing on somebody almost good enough.
- Don’t limit your search to people you know personally.
- Look into professional services and outsourcing options for tasks that don’t require a full-time staffer.
- Make your job only the thing you do best.
- Consider hiring a staffing company to take this off your plate.
With these in place, you’ll find building the team and culture that best serves your company’s needs is an easier part of your job than other tasks. In many cases, the team will build itself using the traits that got them hired in the first place.
#6 Write (and Revise) the Best Possible Business Plan
Business plans exist for two reasons: to give you a map toward success and to show your potential to investors and lenders. The stronger your business plan, the more detailed and powerful and precise, the better your chances of success in both the short and long term. Most entrepreneurs who don’t seek funding tend to skimp on this step because they feel they don’t need to write down things they have clearly in their minds. This is a huge mistake. Don’t make it.
#7 Learn to Take Criticism
You’re going to take some serious hits as an entrepreneur. You’ll need to develop true resilience to succeed. Most importantly, you will need to learn how to hear things you don’t want to from your clients, your staff, the local government, your competitors, and the press. Criticism can be hard to hear, but it’s the single best indicator of where you are weak and need to improve something in your company.
Success isn’t guaranteed in entrepreneurship or any other part of life. That said, making sure all seven of these practices are smoothly in place will significantly improve your chances. Implement as many as you can, and watch what happens.
Image credit: CC by Gabriele Iuvara