By Taffy Williams, president and CEO, Colonial Technology Development Company
The new year is a time when many adopt resolutions meant to make their year more successful. Some people decide to lose weight, others choose to break a bad habit and others may wish to make a dream come true. This is a time when entrepreneurs can use a new year resolution to create that dream business. Entrepreneurs are dreamers and they should be. In fact, they should ‘dream big’—after all, it is not possible to accomplish a goal you never even try to achieve. However, making resolutions without planning are doomed to failure from the start. For this reason, the following list is intended to help you in establishing your game plan in moving closer to creating your dream business.
Determine your runway
Startup companies have no funding on day one and it may take a long time before they do have funding! This means no salary from the company until a financing or sales are achieved. For this reason, it is essential that you identify the amount of time you can function with little or no salary being derived from the startup business. This period of time is your runway.
Funds for your personal expenses are necessary to provide stability in your life. Perhaps you have severance from your current job, savings in the bank, other benefits or the ability to take out a loan. Receiving business grants, loans, tax incentives or finding an incubator that provides resources are a few examples of the many things that can extend your runway. Some startups require lots of capital, while others do not—it is critical that you determine your company’s capital needs leading to positive revenue and earnings. Evaluate your situation and be comfortable that you can eat and sleep in a warm, dry place for the time required to start generating a salary.
Face your fears
It can be terrifying to start something new. You are not alone in this respect. Finding friends and mentors can help you explore the best and worst things that can happen. Generally, it is the bad things that scare you the most. The ‘fright versus flight’ reflex can cause you to abandon that dream. It is only when you realize that failure is not the worst thing in the world and that there is a new opportunity for you just around the corner, that you muster the courage to jump in and commit to starting the business.
Eliminating or reducing the fear will help you to take your first steps. The fear will come-and-go throughout the building process, but your friends and determination to succeed will help you weather the storms ahead.
Do what you love
Starting something you love to do is one of the best ways to move forward. It is much easier to stick with the business when you really enjoy the work and are excited every day to go back. Many people have the alternate experience. They have worked in a place that makes it difficult to even get up in the morning. Why take the steps down a worse path? Follow your passion and find something you really enjoy. If you do not believe it will be fun, modify the strategy toward something you can fully commit to doing.
Find a niche
Many niche businesses can be attractive. Finding some area that is unique and underserved is a great way to get started. The competition may be less and the customer base more easily defined. You can always expand later once the business appears to be succeeding.
Make sure the niche area has enough of a market that the business will make money. It is possible to find too small of a customer base and the revenues will be insufficient to build the business. Studying the market and offerings before starting the business is extremely important. Remember, the goal is to be profitable, not to create a lifestyle business!
Get feedback on your plan
Friends and mentors are often helpful in discussing your plans. Those with experience in the sector you plan to work are likely to have great business advice. The feedback can help you adjust the plans to get your best chances to succeed. You should identify mentors with personalities that mesh with yours, and their skills should fit the new business. Obtaining the match of skills and personality will make you more likely to interact with them. Having big names associated with the business is great for marketing, but if you hate talking with them, the true value of mentors is never realized.
Just do it
One of the greatest hurdles in creating a business is getting started. There are far too many reasons for not starting the business: You are scared, have no funds, or not sure where to start are just a few. The reasons will grow with your increasing fear of getting started. Eventually, there comes a time when you just have to do it if you want to build that startup. The background work in the previous steps should help you as you take that leap. Remember that dreams never become reality without taking steps to make them come true.
