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Saturday, April 7, 2012

Setting the Groundwork for a Successful Startup

The startup period is an exciting and demanding time for any company. But this stage conjures up a variety of challenges. A startup is only as successful as the people you surround yourself with. In the very early stages of your business you need to work on four major areas: a business plan, creating a team, gathering resources and complying with state and federal regulations.

Define How the Startup Will Operate
Before you start deploying said brilliant idea, you must have a very clear picture of how the startup will operate on a day-to-day basis. This is perhaps the most crucial–yet often overlooked–piece of the startup puzzle. You can start this process by asking some important questions. Where will your office be? What kinds of technology (computers, smart phones, software, hardware, communications equipment, etc.) will be used? Will the startup have a technology policy? Will your operation need an IT manager? Don’t be afraid to ask seemingly silly questions. In fact, don’t stop asking questions until you answer every foreseeable scenario that is likely to affect the company’s day-to-day. The startup environment is unpredictable at best, so it’s always best to enter the startup world prepared for anything.

Hire the Right People
Diagram of the typical financing cycle for a s...
Diagram of the typical financing cycle for a startup company. (Photo credit: Wikipedia)

Having a good team on hand can make or break a business, particularly for smaller or newer companies. When there are only ten people at a company, they’ll often be handling many tasks and have to be at the top of their game, so you should make sure you’re hiring people who are qualified and talented enough to help your business grow. When you’re looking for an accountant, for instance, hiring someone who just passed their CPA exam might be one of the least expensive options, but someone with a masters in finance will likely be able to help you establish your monetary policies and pull multiple duties.

Find the Right Tools
Many entrepreneurs enter the startup world with a laundry list of tools only to find out that they’re the wrong tools. This usually starts by reading a blog about a hot new CRM system and purchasing the system only to find out it doesn’t work for your small startup. This can be a difficult concept to nail down if you don’t know what you’re trying to find. In very basic terms, the right tools for your startup increase efficiency, which in turn increases your bottom line. Since the entire goal of a startup is to become profitable ASAP, determining the right solutions for your startup is both crucial and challenging.

Get Legal
As with any business, it’s essential that you make everything legal as soon as possible. One of the biggest oversights for any startup is waiting until everything is in place before filing the right paperwork. The problem with this mentality is that few things will ever be in place. So, as soon as you come up with the idea, start filing paperwork. In most cases, getting legal includes: incorporation or LLC formation paperwork; hiring an accountant/attorney; obtaining a federal tax identification number; opening business bank accounts; starting a line of credit; obtaining business insurance; figuring out your tax requirements; and leasing an office space.
The success or failure of a startup comes down to efficiency. Successful entrepreneurs know that even in the beginning stages tough decisions must be made. While a brilliant idea may be the vehicle of a successful startup, a combination of good people, the right tools and a clear business plan is the fuel that gets you there.

Source: http://startupratings.com/setting-the-groundwork-for-a-successful-startup/



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