The statistics are shocking. Start-up companies fail much more than they succeed. What can we do to turn the tide? How can we create a win? At ByDesign Technologies we have launched hundreds of start-up companies. We have seen many succeed for the short-term (3 years or less) and some for a longer period (3-6 years). But then there are the special companies. Those that are start-ups with longevity. What makes those companies special? I hope by sharing some of the knowledge we have gleaned over the last 15 years, it might help you if you are considering starting a business.
For your start-up company to be successful you must have the following:
#1 – Competence
Competence does not equal intellect. You and your team can be brilliant and yet not understand what needs to happen for your business to succeed. You and your team (if you have one) must have good planning skills. You must have good financial skills. Some people will get money from their investors and not spend it on the right things. You must have strong accounting and you must not be emotionally attached to the pricing of your wares. You have to understand the market and how to make it work for you. If you want your company to get off the ground and move, you or someone on your team should have an intrinsic understanding of finance. Ultimately the success of a company is dependent on what money comes in vs what money goes out.
#2 – Experience in Business Management
It is important to expand at a rate that you can manage. There is a saying, “Go big or go home.” While this applies to a few businesses, it does not apply to most. The companies that stick around and generate good profits are ones that take time to build the infrastructure needed to support great growth.
#3 – Knowledge of Inventory and Supply Chain Management
An intimate knowledge of your inventory, where it is coming from and how quickly it can be made is vital to your start-up success. If a product is a great hit, will you have the flexibility to produce it without a backlog? People don’t like to wait. If a product stinks, will you be aware and be nimble enough to make changes without having a garage (or warehouse if you are lucky) full of inventory that won’t sell?
#4 – Good Relational Skills
When a business first starts, relationships are a key to success. Do you understand the needs of those buying your product? Do you listen to their feedback? Do you take it and use it to improve? What about other relationships? If stores are selling for you, it is vital to hear what they say about marketing your product. Businesses that listen well have a very high chance of success.
#5 – Tenacious Entrepreneurs and Understanding Families
Starting a business is not for the faint of heart. It is very hard work. It requires dedication and many long hours. If your family is not supportive of your venture, it is likely that you will not be able to invest the number of hours needed for success. You must understand that the business depends on you to run it. Your software is not going to run it, your employees are not going to run it, your inventory manager is not going to run it. It lives and dies with you. Tenacity is required for the business builder and an understanding family is a key to success. It is a sacrifice. You must decide if it is worth taking.
Every business starts with a dream. At ByDesign Technologies, we want to see our client’s dreams come true. We want every business that uses our products to become a company that soars.
ByDesign Technologies provides mission critical software to the direct sales industry. They have had the opportunity of working with many start-up clients and helping them grow into industry leaders.