5 things you must do to ensure your startup is a success

While entrepreneurial success is never guaranteed, certain mistakes practically guarantee succeeding at failure. Follow these five steps to stack the odds in your favour for your startup, writes Alan Manly OAM, author and CEO of Universal Business School Sydney.

Many startup entrepreneurs rely on personal commitment to their great new idea. Some would be so harsh as to call this behaviour ‘crazy brave’: an uncommon pairing of madness and courage, where the heart trumps the mind.

Below are five tips to perhaps reduce the crazy and direct the bravery on the pursuit of success.

Five things to do to make your startup a success

1. Understand change is constant

“The only constant in life is change,” mused ancient Greek philosopher Heraclitus, circa 500 BCE. And the saying is as relevant today as ever before.

In these rapidly changing times, step back from what was a great idea pre-COVID to really critique the opportunity and its merits (and drawbacks!) in the cold harsh light of the post-pandemic landscape.

The post-COVID fallout has only just begun. See, for instance, the very slow return to office in our CBDs.

“The return-to-office date has died,” Nicholas Bloom, professor of economics at Stanford University, US, declared in January this year. Yet how many startups have been hanging on waiting for the great return? And what are their competitors doing while they wait for that return that may never come?

While the start dates on lockdowns and public health restrictions may have been absolute, life out the other side is anything but.

2. Role play your investor

It’s been said that when funding an unproven venture, you can expect to raise money from only three sources:

• Friends: Because they believe in you, not the venture.
• Family: Because they believe in you, not the venture.
• Fools: Because they don’t recognise the risk in the venture.

Take a leap into the unknown and role play the next person that should be inspired to invest in your venture: the investor.

Ask yourself the one question every investor wants to know, but which most entrepreneurs fail to consider: “When will you get our money back?”

The answer will almost certainly be eye-opening, and potentially frightening too.

3. Follow the cash

There are only three things to consider when assessing a business: cash flow, cash flow and cash flow.

No matter the amount of funding raised, a startup can always spend it. And then some.

Only with positive cash flow do you truly know that you have a business – because you have paying customers contributing incoming revenue.

4. Get customers

Many startups are based on pre-existing connections: customers following a known person or group under the promise of new ideas or, at worst, a better price than what is offered by the incumbent.

This may be necessary in those early days, especially for a startup financed by the bootstraps. But a viable ongoing business will need customers – ones who are strangers.

Because unknown customers trade on perceived value, not simply goodwill, and so will vote with their wallets, not their hearts.

5. Respect yourself

Whilst startups inevitably require hard work and long hours, this should be measured as the sprint that must evolve into a marathon – there is no such thing as a long-distance sprint.

Manage your resources, such as equipment and invested money. Then focus on the most valuable asset of all that, ironically, too many entrepreneurs ignore: your personal wellbeing.

True, this asset may not appear on the balance sheet. But the folks who have expressed faith in you – be they family, friends, or fools – deserve maturity from you. Not to mention the fact that family and friends expect you not to be a fool.

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