Starting up a new company is an exciting and challenging endeavor. Innovative ideas, endless enthusiasm, and big hopes for the future surround the founders and first employees. The team at Reflexion knows what it’s like. The company started with three high school friends who were inspired to continue to developing their neuro-fitness service that tracks cognitive changes. It became the founders’ mission to develop cutting-edge brain-training technology to help all athletes improve their game.
During a company’s journey through its first years, founders of a startup face many challenges and must learn to overcome them. Here are some of the lessons learned.
Set Realistic Expectations and Play for the Long-Run
Entrepreneurs often start with a great idea and experience some initial success. The challenge becomes how to turn that initial success into a long-term business strategy. New companies make the mistake of assuming that the initial excitement will continue or even grow at an unrealistic rate on its own. However, initial bursts of success are typically short-lived without a clear and consistent business plan.
Unless founders of startups are well-seasoned in establishing new companies, they should find a successful business mentor to help get things established. Begin by learning about your market, the competition, and existing and future demand. Then set realistic expectations and SMART goals, which are specific, measurable, attainable, relevant, and timely.
Obtain and Manage Money Wisely
Every startup needs money. Over time, the more revenue you generate, the more expenses you incur. The balancing act of how much money to invest or borrow in order to realize the goals of your startup can be a tricky one.
Whether you decide to fund the new company on your own with help from friends and family, turn to a financial institution for a business loan, or drum up interest and cash from outside investors, money will be a significant challenge for your startup.
Be sure to research the advantages and disadvantages of all your funding options as well as examine the risk tolerance of your investors and your management team. Set clear time frames and goals and be sure to keep communication as transparent as possible.
Finding the Right Team
Employees can often make or break a company, and in the case of startups, they are even more important. Entrepreneurs usually have a specific vision and working style, and it is critical that the initial team complements the founders.
It’s nearly guaranteed that new companies will require more than a typically full-time job from its initial employees. The team members you select will need to be invested in the vision and mission of the company, possess the technical skills, and contribute to an overall synergy to launch the startup into the market successfully.
If your new company enters its first year with a smart, realistic business strategy, a team of people invested in the business vision, and the financial backing to support the initial launch, your startup will be that much further ahead that those hundreds of new companies who don’t.