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Helpful guidelines for company founders to keep in mind while establishing their business
In today’s dynamic business environment, it takes more than money for a start-up to succeed. Whether it’s your own capital or a venture capitalist’s investment financing your big ideas and plans, it’s how solid you make those plans and how well you execute them that decides whether your business will make it big. Here are five steps to make your start-up a success.
1. Know your market
You may know your offering in and out, but as a business, you will be operating in a much larger space and you will need to have in-depth knowledge about the market and especially your competitors.
Strengthening expertise in a field also enables you to become more in sync with the needs of your customers, more attentive towards market opportunities and better equipped to tackle the competitive landscape – this will all enhance your credibility significantly in the eyes of the investors.
2. Don’t compete with the big guns in their territory
It is essential for start-ups to tread carefully when competing with big brands – the established companies have advantages that can crush a newbie. Competition needn’t always be direct and rough – it can be discrete and peaceful as well. It makes a lot more sense for start-ups to identify the weak areas of their big competitors and try to provide solutions in those areas to create a market of their own. If you offer solutions that competitors don’t, there is a high chance for you to win over a lot of customers without going at direct war with a big brand.
3. Know who you need and invest in them
Start-ups need to be smart and hire incredibly well. One of the biggest blunders that new businesses make is to hire the wrong people, then take too long to fix it. Your business is going to be as good as the people behind it – and if you don’t keep a check on under-performing employees, then you’re headed for trouble. Start-ups are low on resources, so the wrong people cost both precious time and money. Compromising can be fatal, so you need to hire the best people. Founders need to know when to let people go, because people who are bad for business make for an unstable foundation.
4. Don’t be a jack of all trades
It is never advisable to take on more than one can chew. Successful start-ups are not those that try to do everything, or as much as possible, but those that try to specialise in a few things. The best businesses are those that do less well and avoid spreading resources thin. It is imperative to find out and understand what your customers want, then work towards offering them just that. Maintain focus on your core offering.
5. Put a leash on over-spending
It is unfair for new businesses to be overly frugal to the extent that their staff and organisation suffer, but one of the most significant drivers of profitable start-ups is their ability to control their costs. Founders must ensure that money is being spent only where needed. Spending less automatically enables you to make profits faster. This is applicable especially to those who rely heavily on investor funding. Most start-ups who mindlessly burn investor cash end up spending the money too fast, which can put themselves out of business.
The writer is the chairman of the Institute of Chartered Accountants of India, Dubai chapter
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