Success stories like Facebook have inspired thousands, if not millions to be entrepreneurs. Huge sums of money, fancy parties, and global recognition is certainly alluring, but many fail to understand the hard work needed to reach that stage.
As our CTO Hiraash mentioned in his blog post, although start-ups might look sexy, running an actual startup is really hard. This is probably why only around 10% of startups become successful. Around 60% of them go bankrupt or just about recover the invested capital.
So before you quit your day job and start a business, here are a few things to consider.
Do People Actually Need This?
The main reason why most startups fail is there is no market need for their product or service. What you think is a great idea for a product, might not have a market need at all. This is why it’s important to validate your idea as early as possible.
If you really want to, there are hundreds of amazing business ideas which you can utilize right away. Coming up with ideas is actually easy, it’s the execution that makes the difference.
You don’t need to actually come up with a brand new idea either. You can take an existing idea that already has a market need and work on a superior offering of that same idea.
Whatever the method you use, the most important thing you need to figure out is do people actually need it.
Have the Cash to Sustain You?
The second reason why startups fail is they run out of money. It could be your savings, it could be money you raised via the family or it could be money you got from investors. But as soon as the money runs out, you have little chance of making your idea a reality.
So, although it’s tempting to quit your 9-5 job and launch your entrepreneurial career, make sure you have enough money to sustain you for at least 3-6 months.
The best case scenario is you work on something as a side project, start making money out of it and then switch to it full time. But as I mentioned earlier, taking and idea to a product that makes money is extremely hard.
Another good way to raise some cash is to win a startup competition. Winners of startup contests get a lot more than money. They get cheap access to development tools, cloud storage, marketing tools and a host of other benefits on top of cash. All of this will smoothen your product launch process.
Haven’t won anything? Then have a look at our list that highlights tools to launch your startup.
Do You Have the Right Team?
If your current team consists of your friends, neighbors and family members, then you might have a problem. The third most significant reason for failed startups is not having the right team.
Of course, finding talented people to join your startup is not an easy task. This is especially true if you have nothing tangible to show your potential team members. However, startups are sexy and people actually want to build great things. So if you have a solid idea then you should be able to find quality talent.
Any Key Things I’ve Missed About Launching a Startup?
I believe I’ve covered the 3 most important things you need to create a business. Of course, there are hundreds of other reasons, but if you fail to cover these three you probably won’t get to the stage where you will have different challenges.
Usually used to create project plans, a Gantt chart can be used in any industry and is an effective way to plan goals for a startup. The Gantt chart was originally developed as a visual work flowchart called a ‘Harmonogram’ by Karol Adamiecki, a Polish engineer.
In 1919, management consultant, Henry Gantt, further developed this concept and used it to help his colleagues who were manufacturing supervisors. This allowed them to see if the work was being completed on time or if they were running behind schedule.
This chart is now used by companies around the world to try and improve efficiency and manage projects.
A Gantt chart helps to see if the project your team is working on, the one with multiple tasks involved, is going as planned or not. A Gantt chart will help figure out how long each task will take and pre-empt any potential problems that your team might face. All of this leads to a realistic timeline and helps complete every project as efficiently as possible.
Read on to see how a Gantt chart works and how it can benefit a startup.
Why Use a Gantt Chart?
Reasons to use Gantt charts are plenty. A startup needs to use Gantt charts to stay on track and understand where every project’s strengths and weaknesses lie. When a business is starting out, there are a million things to think about and do. Being able to keep track of several different things at once with great efficiency is important for any startup to succeed.
We are, however, only humans and this can prove to be an overwhelming task. Missing even one task can have a domino effect and the ramifications can be disastrous for a company that is still in the process of establishing itself.
There are several reasons why a startup will benefit from the use of a Gantt chart, such as:
A Gantt Chart is Visual
Click the image to use it as a template
Every startup goes through a constant learning process, where it tries to better itself through a series of trials and errors. When planning any action at a startup, a Gantt chart will be a great means of planning projects.
Because it’s a visual tool, employees at a startup will easily be able to visualize different ideas because you can write them down in one place. This also gives a view of the bigger picture, which is perfect for a startup because the direction that needs to be taken is not always clear initially.
It Helps Set a Timeline
A Gantt chart will allow you to bring together all your ideas in one place and also create a timeline and set targets by which individual tasks must be completed. This is a great way to see how long a project will take and for a startup, being able to finish work on time is essential. Here are Gantt chart templates you can use for a quick start with your project planning.
Click the image to use it as a template
It Creates Manageable Tasks
It is easy for a startup to fall into the trap of trying to please everyone. You want to create a great working environment where employees are not too stressed and overworked, while also delivering every project to the client on time. However, not managing tasks appropriately and taking on more than is possible is a recipe for disaster.
A Gantt chart helps create manageable tasks by breaking down larger projects into simpler tasks, which can be completed in a shorter amount of time. Dividing up larger projects into a set of smaller activities helps to delegate and share responsibilities, while making the overall task manageable.
Makes You Stick to Deadlines
A Gantt chart allows you to schedule tasks for a specific time and if you adjust one task in a series of tasks, the timing of the entire project will be affected. This will help you see clearly when the entire project will be finished, allowing you to plan the overall project with greater precision.
This process is done by making clear which task is dependent on another task. This way, members of a team will know exactly who is depending on them to finish their task on time. This is one of the most effective uses of a Gantt chart.
A Gantt chart also helps to see the overall time a project will take, a process that is also known as the ‘Critical Path.’ This is a term used in project management and refers to the process of determining the sequence of activities which will lead to the longest time to complete any given project. This method is used to determine the shortest time in which a project can be completed.
Watch Progress
Click the image to use it as a template
A Gantt chart lets you track the progress of any project in real time. This is done by zooming in, so to speak, into individual tasks which, when combined, make up the bigger parts of the project.
By observing individual charts, a startup can see clearly how the overall project is progressing, and how the current progress rate compares to the initial desired progress date. The Gantt chart is a constantly changing document, one that is dependent on others finishing their tasks on time.
A startup needs to be able to visualize tasks and see how different people are making progress in projects. This can also help bring to light problem areas and issues which need to be addressed early on in any startup’s life, before it becomes a larger issue and affects the future of a company.
This is where a Gantt chart shows its advantages as opposed to a chart that you may have drawn on a piece of paper and left in a drawer. Unlike a Gantt chart, this is not a dynamic document and doesn’t let you stay updated with every step taken throughout a project’s lifespan. With a Gantt chart maker, you can conveniently track and record your project’s progress.
Conclusion
A startup can greatly benefit from the use of a Gantt chart. Although established businesses regularly use this project management tool to keep track of multiple projects, a startup will benefit from this tool due to its ability to track progress and understand where potential problems in a project may lie. With the correct use of this powerful tool, a startup can be as impressive as it had planned to be.
About Author
I’m Rachel Oliver, I have been working for the past couple of years as a freelance writer. While I like to write about all things under the sun, including energy, business, sports, home improvement and fashion, I am especially passionate about business, technology and electronics. Currently, I am pursuing this passion by working with Digsemi – trusted partner in electronic components. You can get in touch with me on Google+, and Twitter.
ABC’s Shark Tank has inspired an entire new generation of entrepreneurs to get out in the world and follow their dreams and launch a successful startup of their own. But just like in the tank, not every startup will experience success. In fact, the reality is that about nine out of ten startups will fail, and 50% of new businesses don’t make it past the four-year mark. Why do so many startups suffer this fate? Here are some of the most common reasons:
Bad Financial Planning
Money is tight in the early stages of a business, so if you don’t watch your spending, it could be the end for your startup. For example, don’t hire more people until you absolutely need to, instead, take on more roles yourself.
Yes, this means you will be working more hours, but that’s the life of an entrepreneur. If you have to go on business trips, don’t fly first class until you can afford it. In the beginning, you have to be mindful of how you spend every penny, otherwise it could mean the end for your startup.
Lack of Passion
Being an entrepreneur is a 24/7 job, so you have to be passionate about what you do in order to succeed. If you don’t believe in your product, you won’t be able to get others to believe in it either, so you should never get involved with a company unless you want to live and breathe it. If you don’t have this mindset, you won’t be able to turn your startup into a well-established, successful company or launch a successful startup in the first place.
Unable to Secure Investors
Most startups rely on the help of investors in order to make it through the first few months or years, but when they can’t nail down an investor, the business collapses.
If you’re having trouble finding an investor, tap into your network on social media or search for pitching competitions or funding opportunities in your community. Before you go in front of investors, role play with a friend so you can practice your negotiation skills. Remember, you usually only get one shot at this, so make it count.
Problems With the Market
Some companies release products or services without doing research to see if there is a high demand for them in the market. Even if the product is innovative, affordable, and well-made, if there’s not enough demand for it, it won’t succeed on the market. To avoid running into this problem, startups must do market research prior to launching their products or services.
How to Launch a Successful Startup According to the Shark Tank Experts
Now that you know why so many startups fail, take a look at this infographic to learn more about achieving success with startup tips from Shark Tank:
The idea of a startup is surrounded by many exciting rumors. However, not each of them is true. It is important to check the fact sheet before starting such a challenging adventure.
Some entrepreneurs might rely their business strategies too much on unfounded rumors and suffer the consequences. So, before taking the big step to becoming your own boss, you need to be aware of the following 5 startup myths to be safe from traps.
You Need a Long-Term Financial Plan
This might bewilder many future entrepreneurs, but the reality is that you don’t need a long-term financial plan. And the reason behind this is that there is no such thing.
The startup owners that are focused too much on projecting the tiniest financial detail are in danger to lose sight of what’s really vital for the business. When people start pursuing this ambitious dream, two things can happen. They will either postpone the launching of the startup endlessly or be taken aback by unpredicted issues.
The financial plan should enjoy flexibility as there will be payments that cannot be foreseen. However, it should lay its foundation on your cash burn. First of all, it is important to calculate the capital you need each month to maintain your business. If you can afford these expenses and remain with a handsome budget, your startup will have enough financial support for the first year.
Your Idea Must Be Original
There is some great news here. You don’t need to become an inventor in order to start a new business. A startup is actually a solution to a problem that a large audience confronts with.
There was nothing original about Airbnb, Facebook, Apple or other big hits at the beginning. They simply identified a flaw in an idea and upgraded it to become relevant for the age of technology and a larger public.
So, in the light of these findings, an entrepreneur has a job that resembles that of a recycler. We’ve come to such a point that there’s nothing new under the sun anymore. And yet the large public is looking for new products to solve their everyday problems or that can promise them a better self.
So, there are many ways you can come up with startup ideas. You can take two pieces of technology and combine them together into one effective product. Or you can find a past business idea that failed and upgrade it to the modern age. Selfie sticks were invented a long time ago, but they didn’t make sense in the past. Now, they enjoy unimaginable success.
Investors and Customers Will Come to You
Once they come up with the right business idea and the financial plan is in place, the new entrepreneurs expect investors and customers to come to them. However, no matter how good the startup is, there’s only a slight chance that this will happen.
First of all, the target public probably is not aware of the existence of such a thing. This is where a powerful marketing move should come up and create awareness. Secondly, all new startups will have a common drawback which is that of being new.
People don’t want to invest in a product that promises a lot but doesn’t deliver good results. What if you are a scam? What if your audience and you share different tastes? This is why you need to build credibility backed up by reviews, feedback, testimonials, science, and test results.
The same goes for investors. Without direct contact, they are not aware of your business. Moreover, they won’t risk a bad investment in a startup that can deliver only promises. Your product or service is good, but what about your management and financial plan? What are your projections for the following year? What are the strategies to increase the annual revenue?
You need to work hard to build a strong case for your startup. Investors want to see soaring business numbers, vision, and an iron management. In order to receive funding, you need to create a presentation that will sweep investors off their feet.
Everyone loves free products. So, they will naturally take advantage of this generous offer and order it immediately. They will even ask their friends and family members if they want it, and the answer will most certainly be positive. So, in just a matter of hours, you will receive the biggest number of orders that you could have dreamt of. Basically, it looks like you got yourself with the secret to success.
However, things aren’t always that simple. Let’s take a look at the consequences of such a move. Even though the product is of quality and it deserves its retail price, it will receive a long lasting tag of freebie. And it only comes naturally to think that if it was once a free product, why should you get it again in exchange for a price?
The same trap can be created with discounts too. Once you release a powerful campaign that offers an incredible 20% off, you will see a dramatic increase in revenue. However, your customers will remember this event. From that point on, they will expect a bigger move from your startup. All these factors will trigger a snowball effect. Your customers will expect more with every upcoming marketing event. Your 20% coupon will turn into 25, 27, 30, and so on. Even though the success of the first campaign was humongous, its side effects will affect your startup in the long term.
So, to avoid this trap, it is highly recommended to come up with incentives other than money. Offer your clients value and time-saving solutions, and they will repay your quality services accordingly.
Family and Friends Make the Best Associates and Employees
Your friends and family are the only people you trust. You listen to their advice for a personal matter. Plus, they are there for you for better and for worse. So, what can go wrong if you involve them in your startup?
The thing is that a startup requires many difficult decisions. You have to create marketing campaigns constantly, contact investors, host events, develop and improve your product, and many other vital tasks. There is a lot of pressure on your shoulders.
In these moments, you don’t need someone who cares about you and doesn’t want to get you upset. You need associates who can support their ideas with strong arguments even though they are contrary to your beliefs and have perfected many managerial skills over time.
A mother or father, brother or sister, will be too emotionally involved in your startup to remain objective. Their judgment is clouded by biased opinions which can turn any decision into a weak solution.
So, these are some of the myths that can put your startup in jeopardy. You have learned by now that some actions might trigger great results for the time being. However, their long term consequences may turn them into bad moves for your startup.
Author Bio:
Passionate about technology, Dustin Ford started writing for online publications. One of his lasting collaborations is with http://technologydreamer.com. He became interested in marketing and now he is a consultant for small businesses that want to diversify their marketing strategy.
We live in interesting times. So many things are happening so fast, and a good chunk of that for most people is because of the Internet. Yeah, you’ve probably heard it all before, but have you really stopped to think about its impact on your life?
Anyone born after the 1990s have no real appreciation for it, but for those that were teenagers the first time computers became affordable for everybody, and the first email service became available, it was the best thing invented since sliced bread.
For would-be entrepreneurs, the Internet opens up a vast array of business opportunities. Anyone with an Internet connection can start any of 14 businesses tomorrow with nothing more than the panting desire to make a bucket load of money.
That said, starting a business is easy, but making any considerable strides to that bucket of money? Not so much. You have to realize that since anyone can start an online business tomorrow, anyone does. If you don’t know what you’re getting into, you’d better not quit your day job. Here are what you need to know before starting an online business.
You Are Going to Fail
Ouch! So much for the vote of confidence.
However, the first thing you have to know is that 90% of startups fail for a variety of reasons. One of these is because no one even knows you are offering them. Your website is generic and as an online business in these times, that’s enough to get you handed your walking papers. You can look at some great examples of website personalization to avoid those mistakes.
Whatever the reason (which will come out in the postmortem about 20 months down the road), knowing there is a 90% chance you will fail will keep you motivated to work hard at getting into the 10% that actually make it. There is no room for complacency and misplaced confidence in an online business. Prepare for the worst and hope for the best would sum it up pretty nicely.
You Will Encounter Problems Along the Way
Even if you have all your ducks in a row before you start your online business, you should still be prepared for roadblocks along the way. Nothing is ever as you envision it will be, so if you find yourself in a situation for which you are not ready, it can stall your engine.
Know that the path from point A (start business) to point B (bucket of money), is often convoluted, and may even involve a point C. When planning your online business, have contingency plans for every problem you might encounter.
For example, if you are planning a drop shipping business, make sure you have more than one supplier for each item so that if one supplier fails you, you have another one you can tap.
You Will Underestimate Your Expenses
Most people have an optimistic streak when planning how much money they will spend.
When they go to the grocery, you plan to spend X amount, but by the time you roll out the cart, you’ve spent X+. This happens to first-time renters as well, where most people fail to accurately predict how much they will spend for electricity or entertainment.
This is parallel to first-time online business owners, who may think that since they’re working from their garage, they can just “wing” their expenses. The fact is, running a business takes money, and you will get into trouble if you spend more than you earn.
Budget all your expenses at 25% more than what they currently are, and that is a good place to start. Adjust your budget as you get a better feel of where and how fast your money goes.
You Will Overestimate Your Projected Income
Many people say “claim your dreams.” That sounds great as a motivational speech, but there is a a lot of work between claiming your dreams and achieving them.
If you claim a bucket of money from your online business, it will not just magically appear in your PayPal account. You have to be realistic about the stages you have to go through to achieve success, and that includes planning your cash flow.
Poor cash flow management aka you ran out of money is one of the top reasons many startups fail, but that doesn’t have to happen if you budget all your projected income at 70% less than what you expect.
For example, if you have 100 orders for an item, project that only 30 will actually push through and can be counted as income. The other 70% may comprise of people that cancel their orders or return the item and ask for a refund. You may even run out of stock, or your supplier fails to deliver as expected. If you are pessimistic about the flow of your cash, you tend to be more careful about your expenses.
Your Business Idea Will Not Sell
One day, you may sit bolt upright from a strange dream and think, “What a great business idea!” Not to put a damper on your dreams, but you need to take some time to consider if it will sell. It is hard for most people to accept that their great business idea may not be so great after all, especially if they feel very passionate about it, but it happens more often than you think.
Some people come up with solutions to problems that don’t even exist, put a lot of work into creating their business model, then are devastated when there are no takers.
Everyone has a slightly different view of the world and the people in it, but if you want success for your online business, you have to put your ego in check and see what other people might think of your idea. After all, you need them to buy into it, so you need to check if your business idea will actually sell.
Run it by a few friends and family members. Post an online poll on Facebook or Twitter, and see what people say about it. This last one presents the risk that someone might get a jump on you, so phrase your questions carefully, and infer conclusions from the responses. Another way to get a feel for the public response is to check the comment section of relevant forums and blogs and see what people are saying.
If you are feeling discouraged because of all the work and disappointment for which you should be prepared, then you may not be cut out for entrepreneurship. An entrepreneur is someone who is willing to work hard and take risks to bring about success.
As American entrepreneur Victor Kiam says, “An entrepreneur assumes the risk and is dedicated and committed to the success of whatever he or she undertakes.” If you find the prospect of commitment and risk an exciting one, then you are already on the road to success.
Building a perfect elevator pitch is extremely important if you wish to sell your new startup idea to investors. It’s do-or-die situation for your business and future. Mind mapping will help overcome the initial apprehensions and bring much-needed clarity throughout the process. It is an ideal way to create an impressive presentation.
“It is always harder to raise capital than you think. It always takes longer. So plan for that.” – Richard Harroch, Venture Capitalist and Author
A startup pitch is viciously more difficult than it used to be. Making big bucks with a new startup is the “in” thing at the moment thanks to TV shows featuring investors and thanks to crowdfunding websites.
Nowadays, you have to present a very high quality and very organized startup pitch to even be considered for investment because there is just so much competition out there. Here are the steps you should take.
Create an Organized Plan
Your plan must include all aspects of a good and organized business plan, such as the product and services, the financial scheme, web design, company overview, the strategy, implementation procedure, management and your market analysis.
Insider tip – Add as much detail as possible
Your aim should be to add as much information as you can. Not all of the information you produce needs to be shown overtly, some of it can be hidden away in files, but you must create a very detailed and comprehensive plan.
Visualization
Mind mapping is a perfect tactic to explain the overall business model in a visual manner. The approach makes it easier for investors to understand your plan, your purpose, and how you have reached your conclusions.
Insider tip.A tiered series of mind maps
If you have created a deep and organized plan, then you will have a lot of information to share. How you share that information may be vital to your success. Consider a series of mind maps that branch out to explain the smaller details of your plan.
Insider tip. Consider the way a website works
Let’s say you have several mind maps. One may show your overall business plan, another may show your business principles, another may show your budget, and so forth. As you add detail, consider adding other levels to your mind maps. A website works with a homepage, headers, sub headers, categories and subcategories. You could do a similar thing with your mind maps as you break down each section and show deeper detail as you go.
Show the Bigger Picture
You can use mind mapping methods to present your ideas with clarity in an interactive format. Through the process, you can focus on specifics while communicating the big picture.
Insider tip. Sell the steak, the steak, the steak and then the sizzle
Show your investors what you intend to do and sell. Then show them your business processes and money-making methods, after that show them how your business will survive the next 5/10/20 years, and finally show them your projected earnings.
Add Important Graphics
You need to add colors, images, and different shapes. Secondary information can be integrated with text notes, documents, files, folders and links to websites to deliver your plans more efficiently.
“Always deliver more than expected.” – Larry Page, Co-Founder, Google
Insider tip. Remember that you are conveying a lot of information
Telling business persons to add important and colorful graphics is like telling a schoolchild to color in their picture. It seems like a waste of time, but you have to consider the investors. You have a lot of information to convey, and so much data (even well-organized data) will become boring. Graphics, colors and shapes may help you better categorize each section and/or show a relation between one element and another.
Insider tip. Add files and folders for the nice-to-know information
When you give your pitch, your investors may become concerned if you cannot produce minor details. It may appear as a lack of preparation. Offer minor and nice-to-know information in separate files that you attach to your presentation. For example, your mind map doesn’t need to show details of the graphic design company you intend to use, but you could include a file that shows the design company you chose, their details and their quotes.
Offer a Conceptual View
Give your investors graphs, images, and charts and place them in mind maps. It will help you communicate your ideas in an uncluttered way. Create clear and compelling points so that your collaborators get a systematic and conceptual view of your subject. Consider using a concept map maker which might be more useful than a mind map in this situation.
“You don’t learn to walk by following rules. You learn by doing and falling over.” –Richard Branson, Virgin Group Founder
Insider tip. Your presentation needs a strong narrative
A decorated cake shows the finished product, but what your investors need is a clear view of how you made the cake. They need to see the mixing, the baking, the first layer of icing and so forth. Think of your pitch as a cake, you need a strong narrative that takes the investors from mixing to the finished cake. A conceptual view is great, so long as it gives a systematic view of your subject via a narrative that the investors can understand.
What are your thoughts on building the perfect elevator pitch?
It sounds obvious, but the more time you invest into your pitch and your startup plan, the better it will become. There is no element of your plan that cannot be improved. For example, if you have budgeted $400 for stationary, then itemize every item you wish to buy and where you intend to buy it from. Not only will the extra effort help prove your case; it will also highlight problems that may adversely affect your business when it is up and running.
Author Bio;
Joan Selby is a former ESL teacher and a content marketer at writing service EdugeeksClub. She also runs her own blog about social media and writing tips. Joan is a Creative Writing graduate and fancy shoe lover. A writer by day and reader by night, giving a creative touch to everything. Connect with her on Twitter and Facebook.
