Seven Steps To A Successful Startup

by Jim Smith on June 26, 2017 · 0 comments

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Here are seven steps that are key to helping you launch a successful startup business.  Together they help you build a financially viable business that becomes profitable in a rapid time frame. They also help you understand the startup capital (money) you need to get the business to become profitable.

1.  Business Problem Needing A Solution

Start by focusing on a business problem that needs a solution.  Relate to the pain that is being felt and try to understand the words and phrases that are used to explain the problem and the pain.  Try to figure out how many people are suffering from this problem and whether the number represents a target market that is worth developing a product for. Try to configure a solution to the problem identified and find out whether this solution will be accepted by the target market.

2. Prototype the Solution

Build the solution and the moment it is functional try it out on several of the people suffering the problem. Understand what improvements are needed and keep prototyping until you get the feel that the product is acceptable.  While doing this understand the words and phrases which are best used to explain how the solution solves the problem and makes the pain go away..

3.  Understand Your Target Market

Understand where the people who have the problem hang out or congregate, the kind of media they use to communicate and the social media sites they frequent.  Understand the key words and phrases they use when they discuss the business problem and the solution because these are the words and phrases your startup will use to describe your solution to them.  Understand the value the solution brings so that you can charge the correct price for it without getting pushback

4.  Develop Basic Skills

It helps if the founder has the basic product skills associated with the solution sold by the startup.  He or she can get directly involved with the product or service and give it the personal care needed. The target market will better associate with someone who talks the talk and walks the walk. If the skill is one at which the entrepreneur excels, then the chance for success increases tremendously.

5.  Understand Cash Flow

Always compare actual revenue and expenses to the forecast and make sure that there is enough cash to cover expenditures. You also need to have enough cash to pay the government the amounts withheld from employee paychecks when they come due. Receiving payment from your customers in a timely fashion gives you the cash you need to pay your expenses. All customers granted credit should be aware of your standard policy for payment.

6.  Ability To Raise Capital

There are three basic statements which need to be prepared and reviewed: the balance sheet, the profit and loss statement and the cash flow statement. These statements will also be important if you need to get a loan to help with your cash flow.

The cash reserves of your startup are the funds available to meet its needs for cash, especially unanticipated needs. You need to maintain sufficient reserves to be used in an emergency and should be replenished as soon as possible. Reserve options include CD’s, marketable securities or even your personal borrowing ability so that money can be put into the business on a temporary basis if needed

7.  Strong Team, Great leadership

Understanding your limitations or what you are not proficient at, lets you focus on those things that you’re good at and by so doing helps you channel your energy to get the best results.

Looking ahead as opposed to always being absorbed with the past lets you chart new courses in life. If the great explorers had been satisfied with reliving their history we would not have discovered the new world. History is good for giving us a frame of reference for our future exploits. The past is simply a milestone against which future progress is to be measured.

Understanding what needs to be done is only part of the game and does not guarantee success. The real secret to winning lies in knowing what not to do. This helps you  maintain a steady course towards your ultimate goal and keeps you from straying off course and constantly wasting time on unprofitable ventures.

Charting the correct course is only the first step. Once you set out, staying on course is the critical part of the journey that gets you to where you need to go.

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