Make Your Startups Work: 7 Success Factors to Consider

The first three to five years are critical to any startup, and some business mistakes can be costly to the existence and sustainability of the business.

So, let's start from the very beginning. First, you had a thought that developed into a dream. Then, you birthed a reality with your thoughts and dreams; now, you have a Startup. That was not an easy feat, but you have accomplished it anyway. Guess what? You accomplished what only 5% of the world's population has done. Good job! But wait, it doesn't end there; you are at the starting point of your dream, and your decisions will determine the viability of the vision and the continuity of your creation.

Below are some factors to consider as you start your business.

1.     Develop a comprehensive business plan.

The need for a comprehensive business plan cannot be overemphasized. Your business plan serves as a roadmap that highlights key opportunities, your positioning, strengths, market, competitors, financial needs, and available resources, among other considerations. It is, therefore, essential that you get it right. You have heard the saying that a failure to plan is a plan to fail. Likewise, your plan for success starts with a detailed business plan.

2.     Dream Big, Start Small.

While capital or funding is required in most, if not all, businesses, it must be wisely invested. A significant mistake that Startups face is the issue of financing. New entrepreneurs always believe they need all the capital required for the business at the start. This notion is not always true. Your goal is to start small and make the company generate the funds for you. Start on a small scale, and gradually build momentum. Focus on building and establishing your business model.

You create a business to make money, not vice versa. If your business is not generating income, then there is a problem. Either your business plan is flawed, or you may want to reconsider your business strategy. Let your business generate your working capital. It is the best metric to determine if your business is profitable or viable.

3.     Keep your overheads lean.

Another pitfall to watch out for is starting with a robust overhead. Overheads can be incurred by accumulating resources, including (but not limited to) humans and assets. The first step into this pitfall comes with creating a ‘robust’ organizational structure at the start of a business. Advice: Keep a lean overhead, keep your system simple. Let your structure grow with you. Starting with a robust structure increases your staff, which increases your business overhead. You want to keep your overhead small and manageable. Increase your staff as your workload increases. You don’t create work for staff; instead, you bring in staff to work on existing projects.

Secondly, you don’t need ample office space to start with. Thank God for technology and remote work. You can rent office space on a need basis; other than that, you can work from your home or your garage (take a cue from Jeff Bezos, Bill Gates, and Steve Jobs).

4.     Reinvest your profit.

One way to increase your funding and scale up your business is to reinvest. Another mistake to watch out for is premature gratification. I have seen new entrepreneurs get excited about their first gig, presuming that there will always be gigs in the pipeline and that subsequent gigs will be juicy. Reality check: this is not always the case. Even a detailed business plan, competitive or market forces, political and economic policies, technology, and social or unseen forces (such as the recent covid19 pandemic) may destabilize sales or profit projections. The first few years of the business are usually the most critical, and revenue made in those years ought to be plowed back into the business. There is a reward for delayed gratification. Sow now, reap later.

5.     Build Leadership Skills.

Being the brain behind a business does not make you a leader. Leaders influence, motivate and direct their employees, team, or line reports to achieve organizational goals. While some schools of thought believe being a leader is inherent, others believe leadership can be thought. Yes, indeed, leadership skills can be learned. Effective Leadership skill is critical to the growth and sustainability of the business. There are instances where CEOs of Startups have had to resign for their lack of judgment, personable skills, or character. Do not always assume you have what it takes to lead a startup company; get help. Investing in a leadership coach and getting a business mentor will help you develop the leadership skills required to run your Startup.

6.     Engage and Respect your Employees.

You need to understand that you need a team of humans to make your vision a reality. Make sure that they understand your vision and keep them motivated and engaged. Please treat them with respect, and you will, in turn, be respected. Remember that a tree does not make a forest. You need your team to achieve your dream.

7.     Treat your business as its own entity.

Another mistake many business owners make (yes, even seasoned business owners) is the inability to treat their business as a separate entity. Separate your expenses from your business expenses. Good business practice is to consider yourself as an employee of your business and treat yourself as such. Pay yourself a salary, set performance metrics, and evaluate your performance. Be guided by the same principles and policies as the rest of your employees. Doing this helps you become guided with your spending and be held accountable by your company's standards. The benefit is that it enables you to build a transparent work culture.

Written by Tolulope Abi Rogers (Ph.D.), an Educator and an Organizational Development & Transformation Consultant.

September 2022.