At 34 years of age this is the 5th time that I am starting a business. As far as being in the driver’s seat this is only the second time but over the course of 10 years I have developed a pretty keen eye for which companies will succeed and which will not.
All the companies I helped to start are still there with varying levels of success which feels pretty good since every time when you help build something you put pieces of yourself into it.
The times I have turned down offers are the ones when one of the pillars below is either lacking or not strong enough to support the idea behind it.
These articles help me structure my thinking and force me to put the proverbial pen to the paper showing that the logic in my mind is at least somewhat sound.
The four predictors of success for any startup are:
I will show that it does not matter if your product is physical or not in a second so do not get to hung up on the words themselves.
Controlling production is the key to making sure not only that you get your product when you want it, in the format that you want it, but it is also the only way to keep Quality control tight.
If you do not control production by either owning the production line or being by far the biggest customer your order will be filled second and your shouts for increased product quality to keep your own customers happy will fall on deaf ears.
If you are saying to yourself ” We sell an idea rather than a physical product” then my question to you is Do you own the idea or are you simply re-selling someone else’s framework?
This is actually the easiest part of all. If you do not have the scale to create an in-house logistics organization there are a great number of world-class providers out there with whom you can partner.
“Plan for the worst hope for the best” is the rule of thumb here. Lowering costs by streamlining logistics and keeping less stock is all good and well when things flow smoothly but Murphy’s law applies and to little fat on the bones can leave you without anything to sell when a quality issue is discovered or there are fluctuations in market demand.
3. Sales & Marketing
If you know your market intimately then you know the total possibility for your product or service. MBAs favor quantitative analysis based on solid market research and this has some great benefits when you are building a business case and looking at what the earning possibilities are.
However, if you do not have the right sales strategy to reach these potential customers in the place where they are actually comfortable buying from you the figures your marketing people came up with mean nothing.
Also know that no plan survives first contact with the enemy. Meaning that once you start you have to be flexible enough to step away from a strategy (not a goal) if it is not working and adapt to circumstances.
Your controller is your best friend. He makes sure that you have funds available at the right time to push through on the great plans that the sales team comes up with.
Perseverance in business is the reason why the turtle beats the rabbit and you have to make sure that you have enough funds to support you through the build up stage where costs are high and incomes low as well as dips in income caused by losing a contract or not being paid on time.
If you take the time to sit back and look at these 4 pillars and how they relate to your company you will not only see your weak and strong points but should also be able to tell where to focus your efforts in structuring your organization.
Success comes not only from great ideas but from the knowledge and power of realizing them in accordance with what the current and mid-term market situation dictates.