Startup 101: All You Need to Know
Launching your very own venture requires significant determination and commitment. Fortunately, entrepreneurs are, by definition, ambitious, driven and have an exceptional understanding of their industry. Even so, we often see excited founders rush into the process without first conducting best business practices like thorough research or proper due diligence which is particularly essential during the founding stages. As a result, founders often find themselves overlooking essential legal protective measures like ensuring that the correct business contracts are drafted, leaving their venture exposed to confusion and disputes down the line.
We recommend taking a step back to consider the essentials. Afterall, there are many challenges from getting the word out to locating startup funding that founders must overcome when trying to get their startup off the ground and on a pathway to success. It is not sustainable to simply adopt the lingo, you will need to put time and effort into understanding all the aspects of your startup. At Allied Legal, we understand each crucial practice involved when launching or sustaining a startup and have prepared a startup 101 guide for you below:
Adapting to Market Change
Disasters like the global financial crisis (GFC) and the recent coronavirus pandemic have been both catastrophic and educational for many founders. In the recent pandemic startups who thrived were largely those who revised their business models and moved quickly in response to the market disruptions. The ability to improve business performance amid disorder is known as strategic agility. This is not to say that swift adaption is possible for every venture, but startups – many of which are innovative and non-conventional by nature – will have space to manoeuvre and adjust. Startups including those adopting alternative models such as agile or lean startups can leverage their inherent flexibility and speed to implement best business strategies.
Don’t Forget About Your Mental Health
There is growing recognition that mental wellbeing is essential to startup success, which is why it is important to seek support when you’re starting to feel overwhelmed. As a founder, launching or scaling your startup can be both gratifying and tremendously stressful as you are responsible for your venture’s success or failure. Founding a startup is a unique experience which involves significant financial, social, and emotional stress. According to Monash University, 72% of entrepreneurs report mental health concerns, but very few seek support. If left unaddressed, the demands of running a startup can place you at risk of burnout or long-lasting mental health challenges. For a full list of mental health resources for founders, you can select the link.
Hiring a Team
Your team will serve as the backbone of your startup, which is why early-stage ventures should take particular care when it comes to recruitment. Startups who are motivated to hire and retain the right cultural fit see increased performance, better productivity, improved quality of work, and higher employee morale. The right candidate should naturally align with your startup’s values and mission and be willing to grow with your startup. You can find out how you can find and retain top talent here.
Leveraging Your Startup’s Competitive Advantage
As your startup grows you will need to consider how you can distinguish your offering within a crowded business landscape. Your unique offering is your competitive advantage, whether that advantage is the quality of your product or your reputation for first class customer service. Large companies even leverage aspects of their business like their renowned company culture. Google, for example, is known for their high energy, fun, and cool workplace culture. You can select the link to learn ways in which you can leverage your startup’s competitive advantage.
Preparing a Startup Pitch
It doesn’t matter how new and innovative your startup’s offer is if you can’t attract the startup funding and resources to bring it to life. To do this, you must understand how to sell your startup, which usually involves going back to your goals, vision, and your startup’s value proposition and then developing a convincing pitch. A pitch is a presentation that captures the essence of your startup. It should encapsulate your startup’s business model, offering, team, as well as your vision as a founder. Select the link to learn how you can prepare a startup pitch.
Due to the competitiveness of the startup sector, startups should take every necessary step to attract revenue. It is no longer viable to simply attain as many clients as possible because customer acquisition is just one component. A startup needs to actively engage with their client-base to gain further referral and long-lasting clients. Understanding your clients’ needs and developing strategies to meet them, whether through effective marketing strategies or through constructive communication, will help you to grow and retain your client base.
Setting Strategic Goals for Your Startup
Setting the right goals and then executing them can be challenging, as you must identify where your startup needs to go, and how your startup will get there. Strategic goals are objectives or visions for your startup that are quantifiable and qualitative. Setting strategic goals provides your venture with a plan of attack and helps to focus your efforts. You should ensure that your startup’s strategic goals are purpose driven, forward focused, actionable, and measurable. Despite the importance of this process, founders often find the idea of ‘goal setting’ to be daunting. Where do you start? Which goals should be prioritised? To help guide your goal setting, we’ve compiled a list of tips you can follow via the link.
Thinking of Selling Your Startup?
Eventually founders of startups decide that they want to sell, either through initial public offering (IPO) or acquisition. Approaching this process can sometimes seem overwhelming, but if you understand the basics, you should be able to successfully sell your startup. We recommend having a sales plan ready to go to maximise your startup’s sales potential. Even if you have a well formulated plan in mind, having a written, specialised sales plan can make all the difference. You should also start looking for key relationships that will assist you in getting your sales off the ground. Preparing a ‘hit list’ can help keep you focused.
Speaking to a Commercial Lawyer
As a startup, particularly if you are just starting out, you may be hesitant to expend what limited finances and resources you have to spare. Still, every startup will require business legal advice at some stage. But how do you know whether you have reached this stage? As a general rule, it’s never too early to consult with a commercial lawyer. A good commercial lawyer will be able to provide best business advice and insights that will be helpful from the beginning, including how you should structure your business, or which business contracts you will need drafted. At Allied Legal, we have provided a checklist to help you in determining whether it is time to consult a commercial lawyer. You can find further advice here.
Need Help? Contact Us.
Consulting a commercial lawyer will ensure that you are avoiding the common pitfalls founders make, from failing to draft financial agreements to not legally protecting your assets. At Allied Legal, we offer free 30-minute consultations to identify the relevant legal armour for your business. To find out more, you can connect with one of our business commercial lawyers by giving us a call on 03 8691 3111 or sending us an email at firstname.lastname@example.org.