What are the common fundamental preparations needed for any startup?


3

Though maximum start-ups come up in information-technology sector, however there are many other who want to venture out, in their respective field, but fall short of guidance or motivation due to lack of start-up culture in their non-IT field.

What are some of the common basic preparations needed for a start-up in any field?

Getting Started

asked Sep 24 '10 at 07:57
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S H
118 points
  • While I like this question it should really be a community wiki since it is subjective. – Percent20 9 years ago
  • No, not subjective, I've consulted to thousands of small businesses over the years and there are common pitfalls that fall outside of specific product/service concerns. It's a valid question. – Turukawa 9 years ago

3 Answers


3

There are quite a few, some related, some not:

  • Assumptions about key suppliers: It takes a while to secure your supply-chain and many business start-ups can really suffer if a key supplier doesn't deliver on time or at the price that they offered; the solution is to spend more time, prior to starting, ensuring that suppliers are trustworthy;
  • Not knowing who your first customer is: What are you doing to secure sales before you start? It takes a while to build up momentum and the clock starts ticking on your fixed costs the moment you open your doors. Did you prepare sufficiently to ensure you weren't figuring it all out on day 1?
  • Incorrect costings: Did you factor in all the costs related to all aspects of securing clients and delivering your products/services? If not then those costs are going to chew away at your carefully prepared forecasted income.
  • Over-estimating market demand: All entrepreneurs are optimists but how much time did you spend calculating the volumes that the marginal competitors in your industry struggle through each month? Get this: at the beginning your business is tiny and - no matter how unique - you still have to struggle for the cash that your clients will already be allocating to others. If you have no idea of the sorts of sales levels that smaller market players experience then you're going to overestimate your own sales targets.
  • Insufficient cash-on-hand: It may take far longer than you expect for those first critical sales to come in; anything from building volume to signing contracts takes time. How much actual and ready cash do you have on hand to cover this period? If you don't have enough your business may fail just short of victory.
  • Poor location and branding: Once you've started your site (physical or virtual) and your brand presence are fixed. How much testing did you do to figure out whether they were appropriate and would help your strategy rather than hinder it? Moving an entire office or shop after a month or two is going to be financial suicide.
  • Over-capitalising: This is probably the most important one. If you've over-estimated your sales forecasts and under-estimated your expenses you may have spent far too much on the structure of your company (the capital investment). Too big a shop or offices, too much investment in software. Is there a way you could have restructured your entire business for 10% of the start-up costs? Start in a farmers' market instead of an expensive uptown address? Work from low-cost industrial premises rather than smart new A-grade office-space? Experiment with off-the-shelf software instead of spending a fortune on bespoke systems?

This is by no means an exhaustive list but these will certainly get you going.

answered Sep 24 '10 at 22:04
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Turukawa
384 points
  • Very nice. Thanks !! – S H 9 years ago

1

I like to recommend people read Art of the Start from Guy Kawasaki. A good book on general startup principles, what to expect, etc. Applicable to any type of startup, not juts tech.

answered Sep 24 '10 at 20:38
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Wil
273 points

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Goals. 1, 2, 5, 10 and 20 year goals. Just wanting to do something isn't enough because after you "do it" where are you going to be? what are you going to do?

answered Sep 24 '10 at 08:05
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Percent20
322 points
  • I have specifically put **common** in my question to avoid it falling as subjective or vague. I mean the preparations which go into background of any start-up before it comes in the market and starts its operation. – S H 9 years ago
  • It is still subjective because anyone can come up with their own idea of what it should be. There is no concrete answer to this question. – Percent20 9 years ago

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