Developing your start-up business
Most start-ups start out as:
- side-projects with little cash investment and run mostly in free time;
- The biggest risk faced is the owner committing themselves to building something nobody wants; and
- the biggest mistake they make is placing most of the emphasis on building (technology risk).
Rather than jumping into building something, I recommend spending time upfront validating if they have something worth building. Working with start-ups is more than just compliance. Sure they need to get right there trading structures, risk planning, GST etc. However, many need help with research, funding, planning, product development etc. When entrepreneurs are hit by an idea, they often spend a disproportionate amount of time designing or building their solution (alone).
The fall in love with “awesome”.
Sometimes that awesome is truly awesome for other people. Most times, however, it’s not.
One of the first projects is often the creation of a business plan. I believe the first step should be the creation of their Business Model. A business plan is static whereas a Business Model diagrams how a company creates, delivers and captures value - its dynamic. It shows how the business will make money.
When working with a scalable start-up in its transition to a larger entity we need to be reviewing Start-up Metrics like:-
- Customer acquisition costs
- Viral coefficient
- Customer lifetime value
- Average selling prices/order sizes
- Monthly burn rate
It is all about customer validation
- Early adopters
The questions that are needed to be asked early are:-
- What are you going to build?
- Who needs it?
- How do you know they need it? (testing for research)
- Why is this a good idea?
- Who are your competitors?
- How will you get customers?
Ever business needs to continually improve their offering. For start-ups it is imperative that they clearly understand how they will create value, who are they creating it for and how will they get it to them.
If you would like to discuss how we can assist you implement your start up business model contact Andrew Russoin our Adelaide office on 08 8373 5588 or follow the links below to find the expert nearest to you.