Top Start-up Tips for New Business Owners
You may have an idea that you think could be a world-beater but jumping in feet first without having considered all the moving parts, preparation and possible pitfalls that lie ahead for a fledgling entrepreneur could spell disaster. Thriving on the enthusiasm, excitement and belief you have in your product or service is critical to any successful business launch but this must be tempered by a realistic, systematic and measured approach to growing your business from ideation to fully-fledged operation.
From competitor analysis, business plans and financial models, to creating the right team and building stakeholder relationships, there are a number of critical areas in which you need to have all your ducks in a row.
Market Research and Analysis
One of the first steps for any early-stage startup is engaging in thorough market research and analysis. Understanding the dynamics of the market you are entering is crucial and includes identifying the target customer base, their needs, preferences, and behaviours. Another critical aspect is identifying competitors to allow you to spot gaps in provision and learn from both their successes and weaknesses.
Once you’ve conducted thorough market research, approaching your MVP (minimum viable product) using the Build, Test and Learn model can be an effective and lean way to get your business operational. This methodology engages with customers at a very early stage of product/service development, and can help you avoid wasting time, money, and resources on developing something for which there is no real demand or significant addressable market. By working with real customers then analysing your metrics, data and feedback, you can quickly discover what works - and what doesn't - and adapt and reiterate in response. This approach is helpful in achieving product-market fit, ensuring the problem your target audience is facing can find a solution in your product or service.
Business Planning
A clear, concise and robust business plan is an absolute must for any new startup - think of it like a roadmap which will lay out all the information you will need on your growth journey. Without a solid business plan which outlines both your short-term and long-term goals - and how you plan to achieve them - you will struggle to open the door to investor conversation and attract the right team to support your startup as you grow.
Your business plan should be an honest and realistic reflection of your aims and means, backed up with metrics data and projections. Typically, your plan should include Financial information (financail model, projected income, balance sheet, cash flow, and funding requirements), marketing strategy, and explanation of your team’s roles and responsibilities, and an executive summary summarising your business plan and your goals.
Connectd’s expert team of in-house advisors have helped thousands of founders to perfect the collateral needed to create a stellar business plan and get investor ready. Learn more about our services here.
A diverse, skilled team
Building the right team to support you on your growth journey is absolutely essential to a startup’s success. Many founders suffer from trying to keep too many plates spinning so finding support as soon as you can is critical. However, you need to think carefully about the composition of your team and ensure that you build a group that is varied, diverse and skilled. Identify the gaps in the expertise and skillsets of your current team (very often this will be you, the lone founder or you and a co-founder) to ensure you are covering all the requirements of your business and the plans you have in place. You should look to recruit a diverse team to bring different backgrounds, experiences, and perspectives. This diversity fosters creativity and innovation by encouraging the exploration of varied ideas and approaches to problem-solving, leading to more robust, creative and well-rounded decision-making processes. Diverse teams can often better understand the various markets in an increasingly globalised world, so having a team that reflects the diversity of potential markets can be a significant advantage. And one of the most important aspects of having a diverse team is that employees are more likely to feel valued and included in a diverse team where their perspectives are respected and appreciated. This can lead to higher levels of job satisfaction, engagement, and retention.
Connectd has a network of hundreds of highly-experienced professionals across a huge range of sectors, geographies and specialisms who are actively seeking to support startups. You can learn more about what to look for in an advisor here.
Creating a strong, recognisable brand
Your brand is the face you show to all external stakeholders, and most important of those is potential customers. Creating a strong brand as a startup involves several key steps:
- Define Your Brand Identity: Start by clearly defining your brand identity, including your mission, values, and unique selling proposition (USP) and what sets you apart from your competitors.
- Understand Your Audience: Understanding your target audience, including their demographics, preferences, needs, and pain points is critical as this will allow you to tailor your brand messaging and positioning to resonate with your audience.
- Compelling Visuals: You want a memorable logo, distinctive colour palette and typography, and consistent visual elements across all brand touchpoints.
- Craft a Brand Voice: This encompasses the tone, style, and personality of all your brand communications.
- Consistency is key: Ensure that your brand messaging, visuals, and tone are consistent across all channels and touchpoints, including your website, social media, marketing materials, and customer interactions.
- Communicate your Story: Share your brand story with your audience to create an emotional connection and build brand authenticity. Highlight your startup's journey, values, and your team to humanise and personalise your brand.
Attracting the right Investors to Your Start-up
All the activities covered so far (and the ones that we’ll touch on later) contribute to being ready to open up meaningful conversations with investors. But even when you are at the point when you can start seeking external investment, it’s incredibly important that you look for the right investors. It can be tempting to jump at the first offer that’s put on the table but patience is most definitely a virtue in this scenario. You need to understand what you need from an investor; do you want a hands-off ‘silent’ investor or someone who is more active and willing to act as an advisor-investor. Do you want one main investor or would you prefer a number of small tickets, or even a syndicate to invest into your business. Would you like to have an investor with a track record of investing into your particular sector?
By providing investors with as much data and information about your business and your future plans as possible, you’re far more likely to find interested investors who are a good fit for your startup and your aspirations. Connectd’s smart match technology helps you to connect with investors whose investment theses you match, and allows you to create reports, dashboards and updates to nurture your investor relationships.
You can read the recent blog by our Head of Founder network, Alex Rose, which includes tips on managing the investment process and learn what to look for in an investor here.
Building the Right Board for Your Start-up
Every startup has different needs when it comes to the levels and types of support they need to achieve success. Even the most talented and determined founding teams will need support from seasoned professionals, and it pays to start scoping out exactly what you need as soon as possible. At early-stage, many startups will create and advisory board comprised of professionals who can offer support, insight and guidance on everything from marketing and branding to technology and finance. There has also been a steep increase in the number of founders who have recruited fractional executives to offer operational support in a part time capacity. It’s important that you ascertain whether you need more high-level input from an advisor or whether you would benefit from the hands-in support of a fractional executive (for example a part time CFO).
Very early-stage businesses are less likely to require the support of a non-executive director, as their input is generally more strategic, very high-level and likely to involve responsibility for good governance. However, as your business grows, it will become a necessity to appoint non-executives to offer constructive challenge and long-term guidance. Advisors will often transition their role to a non-executive role once a company becomes more established and board focus shifts to strategic matters.
There are hundreds of portfolio professionals on the Connectd network who already work with startups as advisors, NEDs and fractional executives, whatever level and type of support your business needs.
Legal Requirements for Start-ups: Contracts and Agreements
Importance of written agreements for clarity and legal protection. Overview of common contracts: Employment agreements, Non-disclosure agreements (NDAs), Vendor contracts, Lease agreements, and reviewing these contracts. See also ConnectdLegal
There are several legal and regulatory requirements for starting a business in the UK and making sure that you have these in place is paramount. From incorporating your business and liability insurance to data protection and taxation, there’s plenty to consider. You can read more about legal & regulatory requirements here.
One of the main areas that founders neglect at early-stage is that of contracts, something that could land you in very hot water. You should make sure that you have the following in place:
- Employment contracts: these protect both you and the employee and are an absolute necessity regardless of how much or how little the employee is involved in your startup
- Shareholder agreement: Shareholder agreements and term sheets should also be created to ensure your relationship with investors is defined and protected.
- Director documentation: unless you are the sole director and owner, put agreements in place which prevent any future disputes or problems. Disputes between co-founders are much more likely than you’d think.
- NDA (Non-Disclosure Agreement): these are especially important in regards to boards members or advisors who may work across a number of businesses. You need to protect your intellectual property and the inner workings of your business, and an NDA will prevent anything sensitive being shared externally.
ConnectdLegal provides all Connectd members with access to a suite of legal documentation including NDAs, terms sheets and employment contracts, and we work with LegalTech pioneers .archlaw to provide bespoke advice for those founders who need extra support.
Resilience in the Face of Start-up Challenges
Startups by definition face myriad challenges: financial pressures, crowded market places and competition, market volatility and managing the dynamics of a new and often inexperienced team, to name just a few.
Whatever hurdles you face, you can rest assured that you’re not the first founder to find the going tough, and you certainly won’t be the last! In fact, many successful founders have at least one failed enterprise behind them and many would admit that the process of failing actually contributed to the success of their other venture. It’s important that you view mistakes or missteps as a learning experience and one whose lessons you can take forward with you to inform future decisions.
Connectd is committed to supporting founders through challenging times and you can learn more about the resources, community and technological solutions we offer to help you on your startup journey at the link below.
