Growing economy, variety of financing plans and frustration with corporate work are the common reasons that trigger a hard-working and ambitious Juan or Juana Dela Cruz to put up a business. Some of you may have been thinking about it for some time but you may have been hesitating as well. This is understandable because putting up a business implies taking the risk of temporary or long-term losses. The financial and career stability of maintaining a day job disappears as well. Launching a startup business takes courage but the reward of meeting your personal goals through it will be well worth the challenge.
To help you prepare emotionally, mentally and financially, here are some of the startup tips and pointers to keep in mound that will help you succeed with your startup.
- Market Study and Gut Feel are different
I have come across many moderately successful individuals who venture into new business concepts with a single plan: gut feel. That’s well and good and it does work for a few but mere gut feel is not enough. You have to have facts to help your gut feel work. A market study includes information about the industry you are getting into and the products/services you are selling. This involves getting news and updates, sales volume, competitive analysis, market leaders review, demographics of customers, behavior of target market, location analysis, best practices, etc. This will help you map out your plan and business calendar – operations, marketing, sales, set-up, hiring, construction, target market, ROI, etc.
Hold on! Don’t turn back yet. Having a business of your own may be the dream but you have to work hard for the dream to last up until you start earning your target profit, at least. To make that happen, Phil Shaw of TransPerfect further suggests that you also test your product or service. Product testing and service review are common among FMCG and multi-billion Peso companies. However, for a startup, you can do it within a manageable group such as your network but make sure to include a few strangers who may be part of your target market. Family and friends are convenient but you need honest feedback to bring your product or service to its saleable form. Shaw also recommends that when things are in place, focus on getting your customers. Point is, you need to sell and in order to sell, you need customers.
Isentia, Asia-Pacific’s leading media intelligence company, proposes talk to the right people and listen to what others say when it comes to promoting your business to get the right customers. You can hire a PR company to help you facilitate a massive campaign if your budget permits. You can also hire freelancers to help you copyright, write PR articles or manage PR and marketing logistics on a per-need basis. A must-have to your marketing is a website and maintaining a social media account on the social media channel that best captures your market. Being online is a must because customers go to their mobile to learn more about a need in that moment they think about it.
- Get employed
This is something that many young entrepreneurs forget to do – to work for a company. Doing this allows you to understand the business from the point of view of employees who are doing the leg work. Businesses are for-profit so decisions of business owners usually depend on the choice that promises business continuity better. Because of this, some business owners forget the energy required to complete the work, processes involved, systems and culture that hinder quick turnaround, even politics that employees encounter every day. More importantly, it teaches you humility, as Rick Sare advocates in Tycoon.PH.
- Plan your Finances
Of course, you need funding but you have to have a financial plan as well. I’m not merely talking about a business loan and payout scheme. Your financial plan must include how you will maintain a cash flow despite pessimistic forecast, how you intend to pay your debt and employee salary if targets are not met, how you will manage your costs, if and how much excess funds will you prepare and what your exit strategy will be. Richard Agu recommends via Entrepreneur.PH that if accounting and finance is not your forte, hire a consultant but you still have to know your business cash flow analysis. He adds that you have to embrace strict financial discipline.
- Set-up Backoffice
Many startup owners neglect this because they underestimate the importance and amount of work needed for accounting, human resources, IT, admin and even operations management. To get you started on this, it’s important that you register your company, click here for a comprehensive guide on launching your startup by Foxhole. For hiring, you have a variety of options: job sites, college fairs, job fairs, social media posts and if you have the budget for it, hire a recruitment agency especially for mass hiring or highly specialized positions. The other critical factor that has several options is your office. Office space is no longer limited to the usual bought or rented commercial space. Depending on your operational requirements, your management style, budget and deliverables, you can also operate from your home or have a co-working or virtual office. Co-working spaces gives you and your team physical office shared with other small companies and this is usually paid monthly. There are a variety of co-working spaces in Metro Manila, you’ll be surprised. Many of these co-working spaces also offer virtual offices that give you an office address, mail management, landline and customer service.
- Monitor, Evaluate, Resolve, Improve
When the startup is running, business owners tend to focus on one thing – sales and profit. While that is absolutely critical, they fail to look at the other items that factor in to these numbers such as cost of operations over time, employee work hours, work load, traffic to the store, upcoming direct competition (by location, product/service, etc.), customer feedback, product/service quality, etc. These things that you may have painstakingly and meticulously set-up are usually disrupted in a real-world scenario. So you need to monitor and evaluate your findings to know what is causing this and find a resolution.
The worst you can do is keep putting off a potential red flag until it is too late. More importantly, as you resolve issues, find ways to improve – to make work more efficient and insurance less risky. One way to avoid a potential red flag is to ensure that your business is insured. For this, we suggest you contact us for Business Protect by Malayan Insurance. Business Protect insures your business, its assets, third party liability, personal accident for your employees and loss of money, securities and payroll due to burglary or robbery. Help yourself run your business with peace of mind by insuring it.
- Have an Exit Strategy
As sad as it may sound, an exit strategy is absolutely essential. An exit strategy allows you to save yourself from further losses if your business gets to this. There are numerous capital ventures, holdings companies and high-revenue corporations looking to diversify that may be interested with your business. It’s important that you plan out up to what financial capacity you are willing to take on. Remember, negative profit may be the downfall of your business but it need not be your downfall.
Apart from the business and financial plans, the other factor that plays a big role in the success of your startup is YOU. Timothy Sykes enumerates the following lessons to starting a business in Entrepreneur Philippines.
- Learn – you don’t need to get your MBA or Master’s in Entrepreneurship to be successful, but you need to keep an open mind to learn and to discover new or better ways of doing things. It will help you keep up with the changing times and if done right, you may be a pioneer in something new in the industry.
- Know your goal – the financial goal is one thing but you have to have a strategic goal that is supported by this financial goal. It may be to be one of the top 3 startups by next year, improve the financial capacity of your employees, have the largest sales volume in the industry, etc.
- Strengths and weaknesses – your strengths and weaknesses factor in how your business will be set-up. This also involves identifying what you are willing to sacrifice and change in order for the startup to succeed. Example, if you are hardly the kind to micro-manage, then best to set-up a seamless communication system and consider virtual office set-up.
- Keep improving – we can’t emphasize on this enough. Reaching a milestone is blinding because you forget that things are ever changing within and around your business. Competition with better or have more add-on products and services can appear at any time. Prices of your goods’ ingredients may go up. Purchase behavior of your target market may change. It’s best to keep an eye out for these changes and to improve your products, services, marketing and operations in order to meet your goals.
- Network – this comes naturally for many entrepreneurs and in fact, it comes with position. Meeting new friends expands business opportunities, shows you options for tie-ups, improvements etc. If you are not yet attuned to this, best to start with online groups and following notable gurus in Facebook and LinkedIn and join conversations online.
- Love what you do – establishing a startup and managing it goes beyond your 8am to 5pm job. It’s almost 24/7 and it requires a lot of energy and decision making on your end so you have to love it. There’s no other way around.
We hope that this article has sufficiently challenged and encouraged you to build your startup. But if the hesitation is still there, you can do something on the side with work you can do from home while you have your day job.
Written by Kristina Relampagos