In the coming weeks, we will be following a software engineer from start to finish as he builds his startup. We’ll go over what’s involved in starting a company, identify some of the pitfalls and successes along the way, and how it affects our lives outside work.
“startup company” is a term that has been used for quite some time now. But what does it mean? What are the steps to starting up your own startup company? This article will go over these questions and more.
How about three weeks? Why not, right? I’m familiar of one company that was founded in a single day. This is the tale from my blog, Planning Startups Stories. Palo Alto Software, which now has more than 40 people, a 70 percent market share in the US retail sector, a UK subsidiary, and a new management team, is the subject of the story.
Last April, I wrote about this three-week notion in “Can You Really Start a Business in Three Weeks?” in the Planning Startups Stories section. As I previously said, a lot relies on the business: how large it is, how technical it is, how much funding it requires, how many people are engaged, and so on.
I’d want to revisit this today, as I work on the final edited edition of our new book 3 Weeks to Startup. Our editors have requested us to go back and establish a realistic schedule to demonstrate that you can achieve it. I believe we will be able to do this with ease.
Here’s what we recommend for the first week’s activities.
| What you really must accomplish, regardless of the circumstances–the fundamentals | Notes, observations, and why this is either week one or week one of three. |
| The primary concept. Is there such a thing as a there there? Is there a demand (or desire) for what you’re selling? What method will you use to concentrate? Consider it to be a combination of market focus, product focus, and strategic focus. Dealing with displacement, recognizing that you can’t satisfy everyone and that you can’t accomplish everything… So, who do you please and what do you do? | Actually, you do it straight away, and you do it all the time. And don’t assume it doesn’t alter on a regular basis. So it’s before week one, throughout week one, and for the rest of your life. This is most likely something you’ve already begun. You give it a lot of thought. This is more important right now than it was in week one. And it’s more than simply talking for certain individuals and goals. You’re undoubtedly well aware of who you are. If you’re investing a lot of money, particularly if it’s money from others (such as investors), you’ll want to go above and above to do more market research, which includes performing a reality check and proving to outsiders that there is a market. In such situation, it’s possible you won’t be able to do everything in three weeks. For the time being, get started on it during week one. |
| As if you were planning a wedding, gather the individuals and discuss the difficult matters, such as who owns what and why, and who does what and why. | You’re probably doing it already, even if the three-week period hasn’t started yet. Even so, let’s call this week one. |
| Get it down on paper. Unless it’s just you, in which case you should save your time. | At this stage, it’s between you and your other founders; it’s not legal yet, but it’s laying the groundwork. Your lawyers will use it to ask the necessary questions and then revise, but for the time being, it’s about putting everyone on the same page. |
| Give the company a name. That might just mean using your own name, but it generally entails not only coming up with the ideas, but also verifying for availability and completing the necessary paperwork to make it legally yours. | This is a difficult one, but one that must be done. You don’t have to name the corporation and the domain name at the same time, as I said in my previous piece. They don’t even have to be named the same. (Bplans.com, for example, is sponsored by Palo Alto Software and provides free business planning information.) |
| Initial sales projections. It won’t be perfect, but you won’t be able to start managing without it. Simply get an idea. Soon enough, you’ll be able to make plan vs. reality comparisons. | Some individuals hate predicting, but take a deep breath and relax. It’s just impossible to design and launch a company without a sales estimate and a sales objective. How can you estimate expenditures if you don’t know how much money you’ll make? Without a sales forecast, how can you estimate your first financial demands as part of your startup costs? |
| Budget for the first expenses. A simple spreadsheet. Payroll, rent, insurance, marketing, and other expenses should all be considered. | You owe it to yourself, just like you did with the sales projection. You must be aware. If you don’t have a budget, you won’t be able to manage it. |
| Calculate the start-up costs. Expenses spent before to starting, assets such as equipment and inventory, and the crucial initial cash balance are all included (alias the cushion, but not if your investors hear you using that phrase). | The majority of this consists of two straightforward lists: costs you’ll incur and items (assets) you’ll need. The more difficult element is determining how much cash you’ll need in the bank to get the firm through the regular drain phase in the early days of cash flow problems. That is, of course, simply another reason to prepare sales predictions and spending budgets. |
| Close the deal. That is, if you are able to do so. When the first customer says yes, certain firms (consulting, graphic arts, for example–some, but not all) get started. If that’s the case, we’re definitely in week one. | And this serves as a warning that sales may mask a variety of flaws. Consider sales today, tomorrow, the first week, and every week. If you can, you’re already doing it, thus it naturally fits in week one. There’s nothing like a pre-launch sale to take the sting out of seeking funds for a firm. Then it continues for the duration of your company’s existence. |
So that’s what I’d recommend for week one of the three-week beginning period, at least for most organizations. You’ll note that I’ve skipped over certain market research that many people believe is essential. In comparison, if you already know your market, what you’re going to provide, why you’re going to give it, and to whom you’re going to offer it, you’re like a lot of other entrepreneurs. You’re not going to do extensive market research. So, unless you really need it, put that one away. And, as I said in the chart, you already know who you are if you need it.
So, week one of the three-week starting period has begun. In my next article, I’ll talk about week two of three.