5 tips for start-up businesses
Posted on: 15/10/2014
Firstly, you need the self-belief that your business has the potential to change the world. More importantly your business needs to have the potential to change the world.
Ask your target market what products would be useful
This sounds obvious but so many start-ups don’t do this. Many successful entrepreneurs carry out detailed market research into an industry and ask people what would be useful to them. This is an interesting starting point for a business and a good way to devise a product or service that is genuinely useful to its target market. The ideal is to come up with a solution to a widespread problem that is so simple you’re amazed no one has done it yet. The anachronism K.I.S.S (keep it simple stupid) is worth keeping in mind.
Don’t write detailed business plans
Nobody wants to read these at this stage, especially not investors. They want to know in the simplest terms possible what your product is, what problem it solves and how large is the potential market.
Whilst detailed business plans may be useful to you, any predictions on potential revenue, profits etc, will all be taken with a pinch of salt. Investors know these are stabs in the dark and will change dramatically as the business develops.
Attract key talent
Many investors will invest in the team as much as in the business. Having co-founders with different skill-sets is a good starting point. Another is to attract established industry professionals as advisers or non-executive directors. You will typically give away around 2.5% equity to these members, but their experience and reputation can be invaluable in securing the next level of investment.
Research the leading professionals in your sector and approach the most relevant ones to your business. People with successful experience in similar ventures will generally be open to potentially profitable new opportunities. LinkedIn can be great for this.
Boil your USP down into a sentence
If you can’t do this you’re in trouble. You need to be able to tell people why your business is unique in a sentence. You need to give an idea of the scale of the problem and how you address that better than anybody else. Open a word document and start writing different attempts. The more attempts you make the quicker you’ll be able to convey your USP’s. Having a punchy sentence, which pitches your business engagingly, is invaluable in hooking the interest of potential partners, customers or investors.
Write a great one-pager and pitch presentation
The one pager or executive summary is an extension of your one-line pitch. This needs to go into more detail about what your business does and must excite the reader.
A simple structure is:
- What is the problem?
- What is your solution?
- How is your solution better than the current one?
If you can’t genuinely answer these questions, you need to go back to the drawing board. Practice answering these questions in as few words as possible. This needs to be punchy, clear and passionate!
Then write a slideshow presentation going into more detail. This should be 5 minutes max and you can give more information about why you’re so passionate about this product or service. This is also a great chance to sell your team and to demonstrate why you’re an investable proposition. Avoid any vagueness or business jargon like “turn-key solution” or “game-changer”.
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Written by Martin Stocks | @Stocks1986