I’ve gone against a lot of conventional business wisdom when I started up the side business.
And I have to be honest – there were times (and there are still times) I wondered if I were making fundamental, critical mistakes but for better or worse, we’re where we are today.
Here are a few of the main ones.
Number 1: Don’t start the business part-time. You have to be committed and passionate enough to leave the safety of your job, and build the business full-time wholeheartedly.
I considered this many times from the start of the business. I really did. At some points, I really wanted to and even prayed through it but even though I considered about a million different permutations of how I could fit in, I knew in my heart that it wasn’t time and I would hold back the company.
Not taking a salary was not an option because of the personal expenses I have and it would have had significant impact on the company cash flow. The game plan is still for me to join at some point but this realistically won’t happen until January 2013 at the earliest.
Number 2: Don’t start a business with good friends.
I understand the merits of this statement but if you’re starting a new business with no track record and no startup experience, nobody’s going to want to ‘get in bed’ with you except for friends.
Friends who have come together and realised that they have a mutual passion for a business, who bring complementary capabilities, knowledge and networks, and most importantly, who have a measure of trust with each other.
Of course, it can go wrong very, very quickly. I don’t even have a specific answer to why it’s worked for us the last 3 years. We’ve just kept our focus on the big picture of growing the business in the best way and worked things out step by step.
Number 3: Don’t start with too little capital investment
We started with very, very little capital investment. For the first two years, we started with RM10,000 and focused on keeping overheads to zero. Then in the third year we started recruiting heavily and now have five fulltime employees, and we raised another RM40,000 for this expansion, which doesn’t even cover two full months of operational expenses.
Yet, we’ve kept afloat and focused on building business with an acceptable margin from day one. This philosophy continues until today – to make enough operational income from the get go to finance monthly cash flow. This may have constrained the speed of our expansion because we couldn’t take all the risks we wanted but it also provided a framework for prudent growth and for building a steady, sustainable model of business.
Number 4: Have a detailed business plan
Don’t get me wrong. I love business plans. I’ve completed my MBA and know how to create wonderful looking plans. But sometimes it can be a lot of work for nothing. You can have all the strategies and plans mapped out perfectly but what matters at the end of the day is execution, and not everyone likes to refer to a detailed plan, especially in the intensely dynamic world of startups.
I started working on a funky business plan in the early stages of the company but it has since just sat on my shelf collecting dust. What worked for us was having a clear vision and then to just hustle and work hard towards that general direction while being flexible to adapt to daily changes. We just had make sure that we kept aligning towards the core vision along the way, with some key measures of performance and targets kept in our focus.
In summary, building a startup is not about following a rigid guideline of success factors or conventional wisdom. It's about doing the best that you can with what you have every single day, with an extreme prejudice towards action and execution.
0 comments:
Post a Comment