As promised, we are here with the follow-up blog story on 50 inspiring startups of 2012 with a handful of tips that will help you to start your online business. These tips could be a warning against mistakes people usually make or a guiding tip for online ventures.
10 Tips for Beginning Start-Up Business Online
Tip 1: You cannot copy businesses
Thinking of copying some ideas from the list of 50 inspiring startups? Yes? Because you think that doing so will give you the same proportion of success that the other person is enjoying. Right!
You are very wrong. The reason that MLM businesses didn’t succeed after a certain level is because they were pulling the wool over people’s eyes saying you just have to copy the business model and wham, you are successful overnight.
It never happens that way. Whatever kind of business you want to do, it should be YOUR IDEA. Yes, you can take inspiration from others but the idea should be unique, something new.
If you want to do a start-up, you have to think from the mind of a consumer – the buyer. Would you buy product ‘XYZ’ if you were the buyer and not the owner? Think it yourself.
Tip 2: Don’t let go of employment
Start-up business is all about not being dependent on a boss to decide how much you want to earn. It is about becoming an entrepreneur. However, don’t let the excitement go in over-drive with wishful thinking.
You cannot make profits from Day 1. It takes usually about 3 years for a business to know whether it can survive of not. Year 1 is all hard work and struggle with little or no profits. Year 2 is break-even and Year 3 is when the business finally begins to make profits…generally.
So even if you keep 2 years margin to decide whether the start-up will work or not, how are you going to provide for yourself and your family? If you are employed, it’s best that you don’t leave it until you are stable enough in the business. I know that it means double hard work and leaving no stones unturned, but that’s the charm of being an entrepreneur. Isn’t it?
Tip 3: Find a support system
Your support system can be any of your family members or a mentor on a professional level. Start-up businesses cannot function alone. You need someone to guide you, motivate you in the lowest of low times, which you invariably will experience.
Whether you allow the mentor to take active interest in the business or just function as the creative / inspiring mind, is your call altogether. Moreover, if you are entering into a start-up with any family member, please ensure that the details of the partnership are clearly laid out to avoid problems in the future.
Tip 4: Research and expertise
There is no alternative to research and expertise which comes only through one’s personal experience and detailed knowledge of the chosen industry.
If your start-up is an eCommerce business, make sure that you are aware of your competition, prominent eCommerce brands, their investor relations, the product ranges and so on so forth.
You will see that a lot of your time is being spent on researching the business and it is good because the more knowledge you have, the better it is for your start-up business. To achieve this end, you can sign up with prominent business websites like CNN and Business Insider or buy niche market reports.
Do whatever you have to do for increasing your expertise over the select niche. It will definitely benefit you in the long run.
Tip 5: Convince the investors
If you had read the list of 50 inspiring stories, you would notice that I mentioned the name of many prominent investors backing those start-ups. How and why are they investing in these businesses?
First, the investors were shown a detailed business plan and/or a revenue model by the start-up founders. Second, they were impressed by the business, that is, its potential to make money.
If your start-up business plan can fulfill this criteria, you can avail a handsome seed capital to begin the business.
Can’t self funding work?
I remember mentioning the name of a gaming company who started with self funding and now it is a million dollar business but it doesn’t mean everyone can afford to. First, you need heavy savings for self funding. Second, if you have people dependent on you for sustenance, you cannot blow up all the savings.
Think hard before self funding. According to me, getting investors is a more viable option.
Tip 6: Sort out the taxes
A start-up should be a registered business; hence you have to take care of the taxes too. The tax system differs with each country but certain things are common such as employee welfare, taxes on goods / services delivered, and cost of registering a business and so on.
The kind of tax applied depends on the nature of the business. The taxes applying to LLC will be different from a Pvt. Ltd company.
You should never take chances with such matters. Get this sorted out while you are establishing the start up to avoid getting into problems later on. Consult a tax expert and draw up the mandatory tax payment so that you can include it in the start-up annual budget.
Don’t try to avoid dealing with taxes.
Tip 7: Get professionals on the team
A start-up business cannot be run alone – it is a fact. A business involves various aspects like marketing, accounting, sales, client relations, and administration and so on. Even if you are a multi-tasker, you will soon face burn out. In fact, when you add up the costs, you will see that you actually spent much more in trying to do all things yourself.
Hire a professional. At least, get a marketing, admin and product developer on the team at the earliest. It is believed that the first 10 people of any start-up business decide its fate in the long run. Therefore, be judicious in your choice.
We can tie this point to the self funding vs. finding investors issue. It will be extremely difficult to hire professionals and pay them salaries if you are self funding the business. On the other hand, if investors are involved, all the costs of running a company are shown to them when the business plan is presented; therefore, the employee salaries and other add-ons are well considered.
Tip 8: Begin networking ASAP
You cannot wait until the start-up business is up and functional to get clients and customers. In fact, setting up a pipeline of clients / buyers should be the primary agenda along with the business setting up process.
Marketing and networking are the backbone of any business. Try to get clients interested in the business from the start. Don’t waste precious time. It won’t come back again.
Tip 9: Concentrate on customer service
Some start-up businesses think that if someone is interested in their product or service, they will come back again and again. This is only partially true because if the customer service of the business is not good, there is no chance that it is going to get any first time buyers, least of all, second and third time buyers.
The way the support representative talks to the buyers, handles their queries, and sorts out their problem plays an important role in determining the image of the company. You have to agree that no matter what marketing strategy you use, the customers are the best marketing agents because they spread the word around.
Would you like to treat your customers – marketing agents badly? I surely hope not.
Tip 10: Be open to problems
A business plan gives a structure of the proposed business, it does not underline the problems you will face while actually running the business. Nobody can. Be ready to come across problems from Day 1. You have to maintain calm and patient to deal with them.
At the end of the day the problems might seem baseless but nonetheless, you have to deal with them. Be prepared, be open to problems – don’t be a complacent business owner. You will kill the business before it gets a chance to bloom.
I have tried to give you a lot of practical advice and tips. You have to have the psychology of a business owner before beginning a start-up. Business is a game and you have to become the master of it…