What is your USP?
Why should your customers come to only you and nobody else?
What particular problem are you solving?
Solve these puzzles before launching a start up suggests Rajiv Talreja.
As India goes through what can only be called a start-up revolution, there are certain issues within this 'revolution' that need to be addressed.
Start-ups are a great way to add to the economy of the country.
When built in a profitable and scalable manner, start-ups can really become value-driven and profit generators!
When it comes to scaling up, the right time and the right methods are important.
If scaled up too quickly, start-ups stand the risk of suffering from organizational challenges which may fundamentally break the business.
When scaled too slowly, the company might lose out on key opportunities that other players are already playing big with!
So, what needs to be done to scale a start-up in the right way?
Here are some must-DOs and DON'Ts:
1. Make sure you have the right reason to become an entrepreneur
If you are starting a business because you want to be your own boss, then your ex-boss wasn't good enough.
If you want to become an entrepreneur because you like the title, then you are being too selfish.
Don't begin a start-up just because everyone is doing it or just because you want to be an entrepreneur.
The right intent behind building a start-up should be to add true value to the market you are looking to serve.
2. Product-market fit
Check your product or service.
Is your product or service adding value to your targeted customer segment or is it just your GUT feeling?
If not, it will be difficult to even get some initial sales and revenue.
Initially, your start-up might not even be profitable, forget about the scale.
The reality check you need to see is that are people ready to pay you their hard-earned money?
Make sure your product or service is solving significant needs or problems of your customers.
3. Stand out from the rest
Don't be obvious. You must find your own space even in an industry where there are a lot of competitors.
To dominate the market share, you cannot have just another product or service that others are already selling.
You can't sell the same pizza in different packaging.
You need to make sure people remember you for something unique and come to you for something unique.
What is your USP? Why should your customers come to only you and nobody else? What particular problem are you solving?
4. Profit first, funding later
Don't play the funding game because everyone else is playing.
Don't go for funding before you have found out how to make profits in your business.
Not all businesses get funded. Not all investors are waiting to fund your business because you believe in your unique idea.
Figure out how to make profits on your own rather than others believing in your product.
Then it is all about time. Whether or not you receive funding, you will grow your business on your own.
5. Be a SHERLOCK - Proof over faith
Don't start marketing without proof of your product making money.
2+2=4. You cannot get the basics wrong.
If you invest X then you need to know what your Y is. Only when you have the proof, you should invest more and scale your business.
Don't do it because everyone else is doing it. Test what you feel might work before you believe in the results. What works for them might not work for you.
6. Hiring at the right time
If you hire people too early, you will lose money.
If you hire people too late, you will lose money.
If you hire the wrong people, you will lose money.
You need to hire the right people at the right time to utilise the resources and grow.
Don't go overboard with hiring!
Check capabilities within the existing team, delegate and if needed, outsource or associate with freelancers before deciding on hiring. Plan well in advance.
7. Balance personal and business finances
Your money and business's money are two different entities.
All you need to pay is ₹3,000-₹5,000/month to a chartered accountant to help you manage your finances.
Make sure you are paying taxes and following all the compliances of the government from Day 1.
You never know what will come back and bite you after 5-10 years.
Also, keep your finances and business finances separate and don’t get it mixed up.
Be disciplined with money. Fix a money discipline for your business and stick to it!
8. Value creation over valuation
There are other ways to raise money than just funding.
Don't get into the trap of raising funding just because it's become a trend nowadays.
Answer this: If you build a model where you invest ₹1 crore (₹10 million) and get ₹1.2 crore (₹12 million) in return who won't come forward to invest?
Next question, if you find such a model where you get 20% returns over your investment would you easily give away equity of your business and get an investor who will dictate what you need to do?
9. There is nothing called CHEAP TALENT
Pay people enough and pay people what they deserve.
Find people who are competent, capable and looking to learn and grow.
I always say this: If you pay peanuts, you only get monkeys.
Look at people who can promise you to bring results in the role you are looking to hire; that way you will be able to get more results from the beginning.
10. Know why you are doing this
Have clarity on why you are getting into the business.
Is it to generate enough income to justify your current or desired lifestyle or to create wealth? Both are totally fine.
What changes are your decisions? You will clearly be able to identify which decision you need to make to help you achieve that goal and which you need to keep aside.
If you have the clarity of what you need then you eliminate confusion.
Do these and remember: Build a start-up to add some impact out there in the world and not just because it' become a fashion statement to be an entrepreneur.
Do it to build a business, not just a business card!
When you are mindful of the pointers above, you will have a startup that is fundamentally profitable. Once that is in place, scaling it becomes easy and much more fun!
Rajiv Talreja is founder, Quantum Leap Learning Solutions Pvt Ltd, a leading MSME business coaching firm.
He is a TedX Speaker, the author of Lead or Bleed, founder, DreamCraft Events and Entertainment Pvt Ltd and DreamCatcher Investments Pvt Ltd.