Farwah Jafri | December 7 2021
One of the many burdens of entrepreneurship is having to make tough decisions, especially right at the beginning of the startup journey. One thing to remember is that in any business, there are seldom any straightforward answers. Instead, there is always a myriad of choices and options, and you have to navigate through these to arrive at the best decisions for the survival and sustainability of your business.
Although there could be many paths in front of you, you need to be well prepared for some difficult decisions that can make or break your business. After all, building a successful startup and keeping it afloat is a challenging task, and you do not want to mess up by making any rash decisions.
We understand how important it is to you that you launch a successful startup, and we recognize the various challenges involved. Luckily for you, we will be shedding light on some of the most important decisions you will make early on in your career as an entrepreneur.
We get it! Decisions to keep your startup afloat in its early years are way too many and maybe overly confusing. And we aren’t talking about decisions like naming your startup, which is important too, by the way. We are talking about navigating the first few months in terms of business strategies, hiring employees, and putting your product out in the market.
Most business decisions revolve around three crucial areas that a startup needs to get right to become a flourishing business venture, namely, the financial, hiring, and business aspects. These decisions will direct the trajectory of your business, and it is important to pay attention to all of them to build a successful startup.
Financial decisions are crucial to the economic success of your business. Properly maintaining the records of the money you make, spend, and receive via bookkeeping is incredibly important in ensuring your business is growing in monetary terms as it expands.
Hiring the right people to build a strong team is perhaps the single most important decision you will make for your startup business. Make sure to consider both the short-term and long-term goals of your company when hiring and recruiting talent. Getting outside help from a consultant is a step that is often overlooked by startup owners. Consider hiring a recruitment firm to identify and recruit the right team for your business venture.
On the other hand, startup owners have to make decisions about how they will run the business. Such decisions and policies may directly impact the organization of your startup business, your strategies of attracting new customers, managing your resources, steering your startup to success, and keeping it healthy. Make sure that you make the right strategic decisions to place your business in a profitable position right at the outset.
We will be discussing the financial impact of the five key decisions to build a successful startup and keep it afloat next:
As a business owner, you want to keep the working capital of your business positive and make sure you have more assets than liabilities at any given point. After all, these are some of the most important growth indicators that affect the direct income of your startup. All successful startups are extremely watchful of these indicators, especially in their first few years.
An important part of understanding how to make the most of your business is to consider having more than one source of income and/or financing. In such cases, you must understand the role of investors, and how you can attract them for capital financing.
Finding the right investors carry obvious financial advantages for your startup, including rapid business expansion, a positive working capital, and more resources for you to allocate to the growth of your successful business. However, the difficult part is attracting parties to invest in your idea.
To increase your chances of building a successful business by inviting investors, you will need to think of ways to adequately incentivize them. Be sure to use your glowing customer ratings, positive working capital, and well-maintained accounting records to show investors your business is booming, and that they will be investing in a successful startup.
Human resource is undoubtedly the greatest assets of any business. As your startup business continues to grow, you will need to hire more people to keep up with the swelling workload. Finding the right people to entrust your business to is crucial, as they will be responsible for manufacturing your products, delivering your services, marketing your brand, and maybe even developing relationships with your customers, all on your behalf.
Successful startups are run by the most competent people at all levels of the organization. A startup owner should lay down the guidelines and criteria for hiring the best talent, including job roles and responsibilities, job descriptions, and compensation plans.
Moreover, it is also important to look for candidates whose work experience and skill set to match your business requirements. Participate in the hiring process yourself, make a checklist of all the characteristics you look for in your employees. There are also additional decisions to be made once the hiring is complete, such as training and development, performance appraisals, rewards, and innovative working methods.
Every new business venture must know its competition and formulate sound strategies to neutralize it.
To be able to do that, you have to study the decisions and strategies of your competitors, including their pricing, distribution, marketing, product quality, and advertising. Your industry and the competitive environment in which your business operates are important to initiate a strong defensive or offensive against your closest competitors.
However, taking the competition head-to-head is never the smartest choice for a startup just entering an industry. Having a solid understanding of your competition is critical to surviving the fierce competitive forces in fast-moving markets, and find an ideal positioning for your brand in the marketplace.
Perhaps you can settle for a less competitive niche segment and steer clear of the crowded mainstream market? Or you can offer a unique product that meets some unmet needs that the big businesses have overlooked? Whatever decision you make, make sure that you have a good understanding of the strengths and weaknesses of your competition, and how you can respond to competitive actions that can be destructive to your young business.
Competition or no competition, you need to have customers to build a sustainable, successful startup. In doing so, you need to forge and foster long-term relationships with your customers to encourage them to do business with you whenever they require, and so that you remain their top choice.
There are many ways to do this – some direct, some not. For starters, ensure your product or service meets all quality standards that your customer have come to expect, complete all business deliveries and transactions without delay, and treat your clientele well.
Meeting customer needs and making customer-centric business decisions are important to fulfill your business objectives. That is because satisfied customers will mean more business for you. Startup owners who deliver a great customer service experience can compete head-on with established businesses and large corporations in their industry, and scale their own business. Strengthening and maintaining relationships with your customer can be a lot of work, but doing so will ensure long-term business success.
As your business continues to succeed and expand, there will come a time when you need to decide whether to hire more personnel to deal with the growing workload or outsource some operations to an external agency.
Startup owners need to understand that a growing business does not always necessitate in-house hiring. Today’s external outsourcing firms are often more efficient and have better capabilities to handle most of your complex, repetitive, and time-consuming tasks and fill gaps in business operations better than your workforce.
Outsourcing can prove to be a cost-effective solution for accessing a large talent pool without incurring any major expenses, especially when your team lacks the right skill set to get the job done. This is often the case with accounting operations and financial management, as the cost of hiring a full-time employee or a professional accountant can be quite expensive for startups and small struggling businesses.
By outsourcing these complex operations, you will be placing your business functions in the hands of experts. As a result, you can maximize the benefits and minimize the costs associated with daily operations. The hiring pool becomes global when you are outsourcing, an ideal solution for accessing talent on-demand.
The decisions to make a startup successful are often exhausting, but they are as important as they are challenging. With the right decisions, a successful business is an achievable feat. Partner with us today for real-time, strategic business insights, stress-free tax preparation, and complete bookkeeping support, and tackle even the most difficult business decisions easily!
Farwah is the Product Owner of Monily. She has an MBA from Alliance Manchester Business School, UK. She is passionate about helping businesses overcome challenges that hamper their growth, which is why she is working at Monily to facilitate entrepreneurs to efficiently manage business finances and stay focused on growth.