Startup Businesses - January 14, 2012
When founding a startup, many entrepreneurs focus on the business idea and how best to develop it into a profitable reality. Entrepreneurs tend to embody certain characteristics that drive them to seek out new challenges, reject the status quo and take necessary risks to increase market share.
Startups are founded on an idea or concept that deviates from what is dominating in an industry, presenting a new mindset or solution to consumers. Typically launched on minimal resources and financial backing, startups represent the birth of inspiration and the determination needed to translate ideas into tangible offerings and gains. Without startups or the entrepreneurial spirit, many important discoveries may not have been introduced to the market, which would have decelerated other innovations down the road. It is important for industries to nurture the growth and development of startups as a source of new ideas and perspectives. Fresh ideas and changes to an accepted system may prove to offer minimal benefits to the community, or completely transform an industry forever. Without entrepreneurs paving the way for new discoveries, how an idea will affect the public may never be realized.
While unflappable ambition and a need to find solutions to common problems are highly regarded character traits, they can leave entrepreneurs vulnerable to certain errors in judgment or missteps. Entrepreneurs should maintain a high level of self-confidence, perseverance and determination to create a presence in a market and turn a profit. Entrepreneurs should also, however, make sure to avoid certain pitfalls that are commonplace when all the focus is on growth and development in a startup's early stages. While it is impossible to start a company and not make any mistakes - some missteps are necessary in order to learn valuable lessons in the process - certain errors can be sidestepped or reduced in severity to limit the impact they may have on the project's short and long-term success. Entrepreneurs must continue to take risks in order to strike gold, but must keep overly ambitious behavior in check to protect the plan from an early demise.
Focusing on cutting expenses in the beginning to keep costs low is generally viewed as a good rule of thumb to help startups stay within budget until profits start rolling in. However, if an entrepreneur makes too many sacrifices for the sake of saving a few bucks, the cutbacks may start to have an impact on performance and quality of the offering. Opting for rental space that offers the most affordable rent or used equipment, for example, may be a bad move if the space does not meet the infrastructure and technological demands of the business. Workers must be performing at the highest levels of productivity and efficiency in the early stages of startup operations. Therefore, staff must be equipped with the necessary tools and resources to support this work, as insufficient assets will result in delayed operations and decreased output. Working under less-than-ideal conditions may also increase the potential for costly errors that can set back companies during critical earl y months.
Putting too much of an emphasis cost-savings on professional guidance can harm a startup's success. Many startups must partner with experts in certain aspects of the business model such as accounting, IT or legal departments. If an entrepreneur can only hire a limited staff and does not have background or expertise in all of the company's components - which most founders do not - it is worth the money to pay for high-quality experts. A discount lawyer or accountant service will typically offer a startup the bare minimum in services and attention. Startups have unique challenges that present themselves without notice. Limited resources and staff make it difficult to address each obstacle efficiently. Ensuring high-quality providers are on board will help entrepreneurs worry less about legal and financial roadblocks and focus more on product development and growth. Working with high-quality service providers may be costly in the beginning, but will typically ward off expensive problems or penalties in the future that may be the downfall for a startup.
Furthermore, entrepreneurs should be sure to keep their self-confidence in check as well. Yes, startup founders must be the strongest believers in a business idea and work unwaveringly on pushing the concept into the market. But entrepreneurs must also know when to recognize a weakness or disparity in a business concept in order to address it promptly and limit any negative ripple effects. Entrepreneurs should never question ambition or determination, but can leave wiggle room for improvements to an idea after gauging the market and speaking with industry experts. If an entrepreneur falls too in love with a project and becomes blind to what elements could make the idea a true success, the self-confidence may become the startup's greatest downfall. Entrepreneurs must be sure to nurture their natural traits while leveraging these skills to the advantage of the business, not its detriment.