Have you dreamed of making your side hustle idea a reality?
Here are five quick tips of things you need to do when launching a startup company:
1. Do your market research
Just because you have a good idea, doesn’t necessarily mean it’ll be a success.
For example, back in 1996, the US entrepreneur and visionary Steve Perlman, Apple’s former principle scientist and developer of QuickTime, came up with the idea for WebTV, which promised to connect your TV to the internet. The founders sold the business to Microsoft in 2001 in $425 million and it became MSN TV, but the internet evolved in other ways and the smartphone emerged. Microsoft closed MSN TV in 2013.
Meanwhile, a similar internet business called Netflix launched in 1998, initially selling DVDs. Amazon tried to buy the Netflix, while incumbent rival Blockbuster laughed at its founders during talks.
You need to understand your audience and get a firm grip on your competitors before entering the market, analysing your strengths, weaknesses, threats and opportunities (aka SWOT analysis).
2. Write a business plan
You have a good idea, but how do you convince someone else that it’s actually viable?
To get your business up and running you’ll need to articulate the essential aspects of your business including the idea, problem you’re trying to solve, target market, barriers of entry among others. How long will it take you to get to minimum viable product (MVP) and how much cash will you need to get there?
The business plan will also form the basis for your pitch deck when its time to attract investment to get your idea off the ground.
3. Get that cash injection
You have your idea, the plan is on paper, now how do you secure funding to get it off the ground?
Perhaps relatives and friends can lend you some cash. Some startup founders bootstrap, funding their growth from revenue (if they’re lucky enough to have it). Atlassian co-founders Mike Cannon-Brookes and Scott Farquhar financed their startup in 2002 using $10,000 in credit card debt.
There are many ways you can source funding for a new business venture including business loans, equity funding and government grants, but unfortunately not all of these avenues are viable.
Many of the large financial institutions will also provide funding in the form of a grant, such as St.George’s Kick Start program.
Applications for Kick Start are now open, closing March 23. It’s available for businesses in two categories: 1. A new business idea if you’re a budding startup or want to launch (you’re not yet trading, but have plans or a big idea); and 2. An idea to grow an existing business, if you’ve been and want to take things to the next level and just need a boost to help you.
4. Manage your finances
The life of a new business owner is a busy one. But never should the everyday running of your business be an excuse for losing focus of your finances. Plenty of startups fail because they run out of runway – the time until your startup runs out of cash and fails, based on current income and expenses burn rate.
While your product/service may be the body of your business, cash flow is the blood that keeps it going and unless you keep on top of this, it can all come to a complete stop.
Plenty of modern accounting software now includes calculations on cash flow that will warn you when a problem is looming, so it pays to invest in technology that will help you stay on top of your financial position.
5. Network, network, network
Knowledge is power and keeping in touch with your peers will help you to understand your market, as well as provide valuable opportunities for the future.
Also, keeping up to date on industry news and listening to podcasts or TED talks will help bolster your business acumen and learn the tricks of the trade. Look to startup accelerators and co-working spaces, such as Stone and Chalk, YBF and River City Labs for their regular program of events.
Newsletters such as the weekly roundup of happening from the NSW Spark Festival can also help keep you in the loop.
You never know when the next person you meet is the opportunity and connection that will make all the difference to your plans.