The joy of every startup is to scale up and become an industry leader. Every startup has plans on growing the business to either becoming a public liability company or selling it out to investors for big money. But like everything that grows, a foundation is overly important. Today, we would be sharing with you some ways you can build a solid foundation as a start-up company.
It doesn’t matter what kind of business you’re into, whether it’s the service business or providing goods to people or some form of expert knowledge, these few tips would help you have a foundation on which you can build your business to whatever height you want it to reach.
“The depth of any building determines how far up it can go”.
It is imperative that you know how far you want that business to grow, and just how deep a foundation you’re ready to develop.
P.S: Building strong foundations doesn’t happen overnight , they take time and effort. If you’re focused on building a deeply rooted foundation for your business, then you should be prepared for work. Real work, and time as well.
What is a startup?
There is a misnomer when it comes to defining start-ups. Most people believe that start-ups are businesses that are new and seeking to grow. While that is partly true, it doesn’t cover the entirety of what a startup is. Small businesses that cater to a small demographic can’t be defined as a startup. This is because according to the small business association, it distinguishes a startup from a small business with this
“In the world of business, the word ‘startup’ goes beyond a company just getting off the ground. The term startup is also associated with a business that is typically technology-oriented and has high growth potential. Startups have some unique struggles, especially in regard to financing. That’s because investors are looking for the highest potential return on investment while balancing the associated risks.”
This, however, does not hold true in all ramifications. Not all startups are tech companies. You could be in the service industry and still be a startup.
Also, the means by which start-ups source for funding is different from how small businesses do theirs. While small businesses rely on loans and savings from friends and families, start-ups rely more on Venture Capitalists or Angel investors to find their business.
P.S: However, for the sake of this write-up, we would be using “StartUp” to mean both small businesses and start-ups.
STARTUP FOUNDATIONS ARE BUILT ON :
- PURPOSE: Most businesses – startups or small businesses – are usually started for the wrong reasons. While most are concerned with what they need to do, and where they need to do what they need to do, a minute few are bothered with WHY they need to do what they need to do.
“If the purpose of a thing isn’t known, abuse is inevitable”.
The purpose of every business is the reason why the business exists in the first place. When a business moves beyond ‘making money’, it helps the business to stay true to its purpose even on days when the market tides are against them.
While some call it the problem a company wants to solve or the values they want to add, I believe a broader view is THE PURPOSE for which that business is created. The WHY.
When a business is founded on WHY, it is easier to build that business even with no money. The conviction of such business, over time, with enough work, would convince the venture capitalists to invest in such a business. The soul of a business is key in growing a business from a startup to the process of scaling up.
What’s the reason for that startup?
2.THE RIGHT TEAM: You are the people who you employ. Business is made up of systems that are made functional by people. Without the right kind of people, your business would be plunged into the ground faster than you can imagine.
Having defined what the purpose of the business is, there needs to be careful selection of people who work for you. Picking the smartest amongst a list of job seekers should not be the goal. We’re not saying you should go for any and every person, but there should be a more elaborate process and steeper criteria for selecting an employee.
If you don’t have an HR department to handle the hiring of new employees, and the job falls on your table and your co-founder(s), you have to ask the prospective employee what his motivation for applying for the job is. This kind of question gives you a fair idea if he/she can fit into the purpose and vision of the business. You don’t want an employee who would ditch your company as soon as something “juicier” comes along.
A thorough check on your first set of employees would set the tone, somewhat, on how the other employees would fare. A highly motivated employee would give his all to make sure the business succeeds. Buying into the vision of the business would go a great distance in saving you time and energy. And he/she would be a role model for other employees who would come later to emulate.
Growing your Employees
One of the major problems with most start-ups is paying little or no attention to employees’ motivation. Motivation doesn’t have to come in higher paychecks (that’s very important too), it can be in the form of gift cards for completing a task, dinner with the team, training and self-development courses for them.
Your first set of employees make up your major team. So it’s important that you are careful in selecting the team that would help you reach your goals faster, as it helps them reach theirs as well. This is how to build a startup team – select those whose visions for life align with that of your business.
3.THE RIGHT SYSTEMS: For any venture to be productive and grow, it needs the right system that supports productivity and growth.
What is a system?
A system is a procedure, process, method, or course of action designed to achieve a specific result. Its component parts and interrelated steps work together for the good of the whole. Creating effective business systems is the only way to attain results that are consistent, measurable, and ultimately benefit customers.
A system helps a business owner focus on the major things and also creates a blueprint from which other people can follow.
It is the interconnection of all the major activities in a business that helps to predict success or failures.
In a post on Forbes, Neil Patel gives some easy to remember characteristics of a system.
- A system addresses a specific problem or business issue.
- A system is automatic.
- Once created, a system does not require intensive thought or effort.
- A system is a processor routine.
What these listed qualities do for the business is that it helps the business move to an autopilot mode even without the major “players” being involved. The benefits of the system for your startup are enormous. Time saving, productivity increase, efficiency in problem solving, and also have your business grow faster.
A strong system ensures a strong business.
It can be challenging creating a system for your startup. Here are some tips on how to create an effective system to help buffer your business on days of turbulence.
- Have a systems mindset: What would differentiate a startup or small business from a self-employed person is the mindset of systems. While an entrepreneur wants to create a system that would outlive him and function outside his control, a self-employed person does all the work is built his business around himself. To create a system, have a systems’ mindset.
- Have a problem you need to be solved: A system works best when small issues are solved. Whatever issues that take your time, systematize it.
- Plan your process.
- Follow through on the plan
Conclusion: Whether or not you have been struggling with your startup or you have plans of starting one, these few tips would help you build a foundation for your startup. On this foundation, as in the Bible, would your world-class business be built.
Have any other foundations you would love to share with us, we are waiting for you in the comments section.
Should you also need more clarity with these tips, please drop your email and we’ll reply to your questions.
It’s 2019; let’s get that business up on Forbes list.