So you’ve had a great idea for a business and are ready to jump head-first into the world of startups - or maybe you’re already there, bootstrapping and searching for funding to make this idea a reality. But now what?
It’s a hugely exciting time, but even startup founders with killer business ideas can be tripped up by the unforeseen or the unknown. Luckily, plenty have travelled this path before and are generous with insights. Before you compare accountants and bring in your startup accountant to get the finances on track, take heed of some of the most useful advice given to startup founders.
Be clear about your goals - both business and personal - but maintain flexibility
It’s easy to get carried away by excitement, passion and possibility - let that happen, though, and it could spell disaster for your startup. Make sure you’ve discussed and got down on paper things like:
● Exit strategies
● Target valuations
● How the business metrics will look by that time
● What success will look like in 1 - 2 years, or even 5 years
● Who needs to earn a salary and by when?
● What will you do if a founder wants to exit early?
● What will happen if you don’t do as well as you hope?
● What will you do if you disagree on fundamentals? How will you resolve conflict?
But getting these straight does not mean the objectives must remain set in stone. The important thing in a startup is to retain flexibility and to go in interesting directions as they arise. Just get the fundamentals set first, and ensure you build in a level of changeability. You need to know when to persist, and when to pivot.
Surround yourself with a diverse group of people better and smarter than you
The best leaders in the world will always tell you to hire people smarter and better than you - and that includes people with more experience, who are older, who have lived a bit. Often younger startup founders will opt to surround themselves with the young and hungry, but don’t underestimate what experience can bring to the table.
But it’s not just people who are better than you; it’s the right people. Culture fit is important, especially when you’ll be living the work hard/play hard life, but avoid just hiring friends. Understand what skills you need, where your gaps are, and hire to fit so performance takes off.
Push for performance, but don’t lose the audience
And a word on the work hard/play hard thing: yes, you want to surround yourself with great people who understand your vision and share your passion, and you want them to perform beyond their best, but you don’t want to burn them out. Temper your performance pushes with checks on their wellbeing, especially their mental health. If your best performers burn out, it will take a lot of time, money and effort to fill their shoes – and, in the long run, you may gain a reputation as a poor employer.
Ignore the hype and stay focused
It’s not a competition. Your startup is different to the others, even if you’re looking to solve similar pain points. And all those others getting a load of press coverage? It’s just a good PR agency spinning things the right way. Ignore them and stay focused on your mission.
Remember, people do their best work when they’re excited about what they do and why they’re doing it, so be sure to articulate your mission. It provides a direction for everyone in the business to touch base with and keep them going.
Which reminds us: keep the lines of communication open and clear. You need transparency in the workplace, but you also need to know how to communicate clearly to potential investors and members of the public. You’ll need their backing, too.
So remember to take a step back every once in a while and check in with progress. You can get so swamped and caught up in startup life that it can be easy to forget what else is out there. Remember the bigger picture, the north star, the mission, then dive back in with renewed vigour.
Look for the right funding, but don’t be afraid to bootstrap - and don’t forget to make money
There are multiple modes of raising money, from crowdsourcing to angel investing to venture capitalist funding to a good ol’ business bank loan. Make sure, especially in the early stages, that your investment comes from a source aligned to your business aims, one that understands the mission and shares your passion.
Sometimes, though, the investment won’t flow in the early days, so don’t be afraid to bootstrap - it’s a rite of passage in startup world. If you’re going to keep things bare and minimalistic, just be sure to create and manage a revenue stream. Personal savings won’t cover ongoing costs like pay cheques.
Finally, find the right partners
And we don’t mean founder partners here - we mean those experts outside the business who can help drive you to the next level.
For example, a great startup accountant can work with you as a partner for growth. They can get you set up right, advise on good processes for managing your money, and help not only with the company’s statutory accounts and filing corporation tax returns, but your personal tax returns, too.
A good startup accountant is such an important tool for founders that it can be difficult to know who to work with. PROfiltr takes the pain out of finding a good accountant; compare accountants and get your free quotes here.