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David S. Rose
David S. Rose is Founder & CEO of Gust, author of The Startup Checklist and one of the
country's leading angel investors.
Starting a small business in the United States has never been easier and, in
fact, small businesses make up the backbone of the American economy. 9 out
of every 10 employees works for one of the 28 million small businesses
across the country. Each month, a half million new businesses enter the
market, of which about 70% will last at least two years and one-third will last
longer than 15 years.
experience of providing the tools used by more than half a million startups
around the world.
One of the most valuable lessons Ive seen proven true over and over again, is
that many of the biggest obstacles that businesses face along the way can be
avoided IF you take care to start things up correctly from the beginning.
When launching a company, investing a little bit of time and money at the
very start can pay large dividends laterbut only if you have a solid
foundation, a thoughtful structure, and a strong focus.
Many of the critical first decisions need to be made earlier than one might
think. Here are the first seven steps every entrepreneurincluding the small
business startupshould take to ensure a solid footing for their business
down the road.
Get smart
Establishing the business model for your business is something that might
not be as easy as it sounds. Do not waste your time looking for partners or
investors, performing competitive research, or even moving forward with a
website, before you have a clear idea of what need your business will fill, how
you will fill itand most importantly, how you will create value and monetize
whatever it is you do.
It is easy to get wrapped up in your own brilliant idea for a business. Give
someone else the chance to tell you what they think. Run your idea by others
in the field, especially others who have started a business from scratch, or
anyone you respect and think may have good feedback. Fight the
confirmation bias and truly listen to each critique. That is not to say that you
must act upon every suggestion, but listen carefully and weigh each as a
serious possibility to help strengthen your business.
You must understand the landscape you are about to enter, inside and out.
And you must be realistic about where your business will fall in that
landscape. First, know who else is out there with a similar offering and
identify your differentiating qualities. You do not necessarily have to be the
first to market, as more than one major player can coexist in the same
ecosystem, but you need to have a realistic understanding of the size of the
market. More than one major player can succeed, but an accurate read of the
market can set expectations and guide your business plans.
Feedback Round 2
Now that you have channeled your knowledge, research, and business idea
into a structured, quantitative plan with strategies and tactics, you should get
another round of feedback before going live. This is when you want to speak
with people who are knowledgeable about your specific field. Try reaching
out for advice to people you respect in your industry. If you are respectful of
their time, and not asking them for money, you may be surprised at how
responsive they might turn out to be. At this stage you are looking for
substantive comments about the business and market, along with specific
critiques (dont take offense; listen to them carefully!) and actionable
insights. Refine and perfect your plan with this round of feedback before
there is any infrastructure in place, clients on board, or investments made.
Even with all this background work, there are many things you just cant
anticipate until real users are involved. It is best to do a soft launch of your
business with a small number of customers who you can easily track,
analyze, and use to adjust your projections. The biggest test will be to see if
customers really want or need what you are providing, and to understand if
they are willing to pay for it at a price at which you can afford to supply it. At
this point, theory becomes practice, and you will be able to put final tweaks
on pricing and process to best fit the market. These initial tests will provide
the quantitative analysis that investors or potential partners want to see.
Whether you are creating the next global app or opening a local small
business, the same preliminary steps are crucial to success. From there,
traditional small businesses and high growth startups may have differing
paths, but the best of both of them are based on strong foundations.
Entrepreneurship is, after all, at the heart of every good businesswhether
high-growth and scalable, or small and independent. Good luck with yours!
David S. Rose is the New York Times bestselling author of The Startup
Checklist: 25 Steps to a Scalable, High-Growth Business, Wiley, 2016
Commentary
One small business means the traditional "American Dream" for a small
business is something of an office brick and mortar store or a fixed salary,
Get Smart
Talks about different strategies and perspectives that we always apply the
most appropriate for our company. Especially for first time entrepreneurs,
many people who have learned hard lessons through trial and error should use
their experiences in their business.
in step utlimo it is to test our company, taking the product to the sale and see
how the reacionar public and how we see the product in addition to
suggestions on how to improve the product, in order to acquire a better value
in trade.