Inspiration, funding, mentors, time and your team.
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The pandemic allowed many to reconsider their priorities, both in life and at work. With the increasing cost of living, supplementing and diversifying your income makes financial sense You also get opportunities to refine and reinforce your skills.
But what should be your priorities in your new business? Here I outline 7 essential considerations for getting started from my more than 25-year business career.
Look around for inspiration and fill in the gaps
Your own experience is probably going to be your biggest source of inspiration for business ideas. Look deep into your frustrations and the pain points of those around you. Consider what skills you have that could plug the gaps in your industry. Or what transferable skills you have that you could bring to a completely new area.
There are plenty of resources out there, from books to websites. An online search for ‘side hustle ideas’ is another useful starting point. Shopify’s blog has some tips and ideas for would-be e-commerce entrepreneurs: https://www.shopify.com/blog/product-ideas
Consider all funding possibilities - but consider the risks of each too
There is plenty of money floating around looking for investments. Most investors, however, are not willing to put money in unless you have already done some work to de-risk their investment. So, you may have to use your own money to get your idea off the ground, then go for external funding to grow your business.
When I started my last venture, my co-founder and I got the idea off the ground with our own funding. Then we raised the next batch of funding to grow from friends and family. If your idea is good, and you have some proof points that convince your friends and family to get on the journey with you, then this could be a viable option.
All the caveats around the risks of working with family and friends apply, of course — especially when working with their money. Your friends and family need to be clear that startup investing is risky. It’s mostly for those with an adventurous mindset, so make sure you carefully think through whether they fit this profile before you approach them.
There are many organisations that exist to boost the startup ecosystem. Approach them and get their guidance on local funding sources. Two that I’m familiar with are UnLtd and Capital Enterprise. They also run education programmes and accelerators that you may want to join, if you qualify.
There may also be central and local government grant programmes you could apply to. Consider all your options and do adequate risk assessments for each.
Should you be a limited company?
The answer to this can depend on the funding sources you are opting for. If you are looking to create something that will take external funding, then the answer is simple: you have to create a separate entity. Also from a risk perspective, sole proprietorships are less desirable.
Don’t underestimate the need to delegate
It’s easy to fall into the trap of wanting full control over every aspect whilst building out your business. This is especially the case if you have decided to give up your day job and go full-time as an entrepreneur. You may feel like you have to do everything — or that you are the best person to do each thing. In reality, you probably aren’t. Letting go and delegating is one of the hardest — and best — lessons I learned.
Put a value on your time
You need to look at the bigger picture and greater trajectory, so if others can help take the burden off of you at a lower ‘per hour rate’ than your own time, then it makes sense to outsource. Your time is precious and it should be spent on the most value-adding tasks, especially in the early days.
Pick your business partners and co-founders carefully
These relationships are sometimes worse than a marriage! Think about the worst case scenario (divorce, counselling) upfront and have honest conversations on each others’ desires and responsibilities before you get into the business relationship. You want someone who is going to bring skills that supplement the areas in which you might be lacking. Make sure to have clear agreement on how you will resolve any conflicts. It’s common to have differing views on the strategic direction of the company, products to invest in, customers or market segments to target.
Get mentoring and executive coaching
Even world-class athletes have coaches. It makes sense for entrepreneurs and business leaders to get trusted guidance and external perspective so they can become the best they can be. Having a mentor or outside-in advisor who has been there and done it will provide an invaluable sounding board. And they can add considerable value by helping you to avoid wasting time and money, for example, making avoidable mistakes and learning lessons unnecessarily.
Those within your industry might have experienced similar problems, but don’t confine yourself to this. External perspectives and transferrable insights from completely different industries might open your eyes to more innovative solutions — and hacks!