Table of Contents
What are startup jobs?
By looking at the startup ideas that came up, you can understand the scope of ideas and then the scope of startup businesses. Startup jobs today have a wide range. Driver, motorcycle courier, remote service provider, cleaner, intermediary, etc. are all startup jobs that have been formed today.
Getting to know the stages of entrepreneurship
The entrepreneurial process is expressed as a set of procedures and methods, which entrepreneurs follow to create a business or investment. All stages of the entrepreneurial process have a special meaning and capability, each of which offers an investment method.
Below is a flow chart of the stages of entrepreneurship. Many start-up companies are facing challenges and problems in their growth path. Having a regular process like the one mentioned can be effective in reducing problems.
1- Identification of opportunities
In the first step of the entrepreneurial process, the entrepreneur must identify a problem and provide a logical solution to solve it. Every start-up company is formed with an idea that provides a solution to a problem.
2- Having a clear vision
Having a vision without execution is just a dream with closed eyes. Also, during entrepreneurship, it should be noted that having a broad vision and identifying and evaluating all societies is essential.
3- Pulling others towards your vision
After tactical planning and achieving a clear vision of the entrepreneurial process, you need to work on assembling the team you want. We talked about this earlier.
4- Collecting resources
In this step, it is necessary to familiarize the audience with your strong idea by having a strong business plan. Having a strong business plan is also a necessary condition for attracting investment companies.
5- Investment
After finding the right resources, now is the time to allocate and use these resources properly. This work requires special skills.
6- Compatibility with time
At this stage, which is the last step of the business development process, it is necessary to measure your work with careful monitoring and review and adapt yourself more and more to the existing conditions as time goes by. Business flexibility is one of the basic factors in this step.
Small businesses, business accelerators,, and economic enterprises
Every economic enterprise can be considered as a set of resources that provide goods or services to make a profit. The enterprise is formed and established with the aim of long life and continuous business activity. Any small business can be profitable as an enterprise. Earlier we talked about startup ideas. Each of these ideas can form a small business in turn. For example, in the field of art, you can create a small business by creating a page on Instagram and placing artwork or handmade items.
The advantages of small businesses are:
Faster response time to customer needs.
You can answer customer questions immediately.
You can provide customers with continuous personal service.
Lower overhead costs
More flexibility
What are the problems of startups?
In the path of entrepreneurship, the challenges of startups can sometimes be frustrating. The fact is that many people enter this path without sufficient knowledge without knowing that a difficult and difficult path awaits them and in addition to the anticipated problems, they may face other sudden challenges.
But there are a few general challenges that are common to most startups, and if you don’t anticipate them, you’ll be in big trouble. These challenges include the following:
Product management challenges
When you are designing and selling a product as a startup, it is very important to regularly listen to the voice of the customer and improve your product based on their opinions and suggestions.
In project management, there is a term called scope creep that every entrepreneur should know. Scope creep means improving the product continuously but slowly. For example, suppose you want to lose weight with a diet. Naturally, if you continuously lose a kilo a day, you will lose your life after a few months. For this reason, the nature of your body reduces your weight to a certain extent, but in the long term.
The nature of product improvement or scope creep is the same. Product improvement doesn’t happen continuously and short term, so it ends at one point. Rather, it happens slowly but continuously, and even in this direction, efforts must be made to establish and place it.
Challenges of attracting and providing capital (start-up financial calculations)
One of the main and most common challenges of startups is the inability to attract investors and provide financial resources. Some startups, even though they attract good financial resources, either spend it in unnecessary and wrong cases or have the wrong management of financial resources in general.
However, every startup has its conditions. Regular calculation of the following criteria can help them in managing startup capital.
- Operating income
This measure can calculate the profitability of your startup. Profitability is one of the most important factors that measure the overall success of your startup and can be a good sign even for attracting more capital.
- Cost rate
This metric shows you how quickly your capital is being consumed (expense rate) before you reach a profit. Your future growth, planning, and success depends on this criterion.
- Debt to equity ratio
This ratio shows exactly how much capital you have been able to attract. This number shows investors who want to give you financial resources how stable your business is or how risky it is.
- Working capital
Working capital, obtained by subtracting your liabilities from your assets, shows how much cash you have to run your business. This measure shows the financial health of your startup.
- cash flow
It shows how much cash is entering and leaving the business. This measure shows exactly where the financial resources are provided and how they are spent. Use all these criteria and measure the financial health of your startup. This is the most important part of a startup.
The challenge of managing growth for startups
Ask any person to name a few successful startups, probably everyone can answer and give examples of people like Bill Gates, Jeff Bezos, Steve Jobs, etc. It is good to read success stories, it is very useful to use the solutions that successful people have provided. But more important than that is reading other people’s failures. It is better to be realistic, failure is more likely than success, and experience and statistics have proven this.
The growth of startups is happening very fast all over the world, and naturally, managing growth in such an environment is more difficult than ever. Try to wake up from the dream, throw away the sidelines constantly read about super successful people, and go back to the challenging real world. Management of growth, balance stability, and focus is your solution.
How to design a startup business plan?
Startup business plan is probably the first step that should be taken before implementation. A business plan is a road map that puts all the ideas and how to implement them and the type of financing, etc., in writing. As a result, you can more easily convey what is in your mind to others and request their cooperation.
Writing a startup business plan may not fit in an article. But in this section, we want to tell you what features and sections the startup business plan you write should have.
- title
Never underestimate the title and name. The title part of your business plan can be an expression of your wishes, faith, and feelings towards your idea.
- executive summary
In this section, you should list your planning and roadmap. Issues such as general company descriptions, problems that your product or products are supposed to solve for people, key solutions, etc. In addition, in this section, be sure to tell the reason why you want to implement this startup idea now and why it is useful to implement it.
- Description of the industry
Which industry does your product or service belong to? In which sector of this industry is he going to operate? What is the current state of the industry in this field that you want to work in? What is the outlook of the industry in the future and what is your prediction?
- Market strategy
In this section, you should specify who exactly are your customers. How and with what methods are you going to attract them to your product or service?
- Competitor analysis
Identify the main strengths and weaknesses of your potential competitors and explain in what ways you are going to compete with your main competitors who are already in the market.
- Product design and development program
In this section, you should explain what is your plan to produce the product and how is the product supposed to look from the customer’s point of view. What are the product development plans and what other features are going to be added to the product or service in the future?
- Operational and management plan
How are operational plans done from the beginning? Who is in charge of management and what things are supposed to be controlled? When unexpected events happen, what management methods are used and how is the startup’s performance? How are the daily tasks and responsibilities divided and what is supposed to be done in your startup?
- Startup financial resources
Where exactly are the main sources that support the startup and what is the plan for financial self-sufficiency over time?
Remember that this document, the business plan, must be updated many times over time according to new conditions. Because in general, the nature of business is not fixed and changes every day. This document is not a page that is written once and then goes into the trash. It is a document that will always remind you and your investors what your startup’s core values and goals are.
How should startup law be?
Establishing basic and legal infrastructure is one of the most important parts of establishing a start-up, and if it is neglected, it can lead to huge problems in the future. The rules that exist in startups do not end only with the division of job positions. For example, what is the type of your startup company? Does it work in the public or private sector? Limited liability? Is it a type of collaboration?
All these specifications also specify the legal powers of the startup. In addition, it should be determined exactly how many people are going to work for the startup. How is power distributed? In which city or cities is the residence of the startup? The place of residence even affects the cost and startup founders may decide to register the startup in other regions to pay less tax or rent.
What is a business accelerator and growth center?
Although small businesses have many advantages, every successful business needs to improve to grow. For any business to grow, it is necessary to stay on the right track and not deviate. For this purpose, the business accelerator is used. Business Accelerator is a business program that supports start-up businesses through training, mentoring, and financing.
Startups usually enter business accelerators for a certain period. Now what is the growth center and how is it different from the accelerator? Accelerators provide startups with a program to reach a suitable state for obtaining capital for a short period and taking a percentage of their profit.
However, the growth center (incubator) has focused less on growth for more than one and a half years and they do not have any specific goals for the company except to achieve success at a suitable speed. The purpose of some growth centers may be to prepare your company for an accelerator program.
Despite having the financial power, growth centers do not take the right to share from your company or if they have the right to share, it is very small, because, like accelerators, they do not invest initial capital in the startup.
Holding company
A holding company is a joint-stock company that has other subsidiary companies and the control of the subsidiary companies is directly under the supervision of the directors and the board of directors of the main company. Holding can be considered the last stage of a start-up, which has found many subsets with great growth.
Agency theory and the challenges of separating ownership and management
A long time ago, a procedure was formed in business management that has continued until today: separation of management and ownership.
With the transformation of small businesses into large industries and holdings, management gradually became a specialized activity, and business owners were forced to use professional managers, either due to limited specialized knowledge or due to the extent and scale of their activities. Managers whose specialty was managing and running the business. The separation of management and ownership formed a relationship whose advantages and challenges are the subject of debate among managers and economists: the agency relationship.
Today, the challenges related to agency relationships are raised under the title of Agency Theory. In this theory, it is checked that in different situations, the representative of the company is the owner or the manager, and where which case is preferable.
Challenges and difficulties of agency relationship
Several challenges in the agency relationship are addressed in the agency theory. Two of these challenges are more serious and pervasive:
- Conflict of interest
- The difference in risk exposure
- State entrepreneurship
Thinking of the government as an entrepreneur is like a unique lens through which you can see a subset of government actions, and of course, this lens is not a model for evaluating government policy. The government’s role in entrepreneurship can be supportive policies in the field of entrepreneurship and establishing laws to support start-ups. The discussion in this field is wide, but one of the sources that can be a model for men’s government is the book Made in Japan. In this book, in addition to the growth stages of Sony, it also describes Japan and the growth stages of this country after the World War. The book Made in Japan is written by Akio Morita. I also suggest reading The Lean Startup book.
What are the reasons for the failure of startups?
As we said throughout the article, only one out of 10 startups succeeds. When you start a startup, you have to deal with the fact that you may fail 90% of the time.
But what is the reason for this high failure rate? Why do most startups fail?
First mistake: focusing on quick profitability instead of focusing on the customer
In the words of renowned business author Ash Maurya, life is too short to make a product that no one wants.
It is interesting to know that, out of the total 90%, 42% of startups fail because they cannot solve a problem in the market. This issue also arises when you consider yourself instead of considering others.
What is the solution to this problem?
Talk to the people you think are your target audience and ask them about the functionality of the product and how they feel about it.
Before you fully implement the idea and spend a large amount of capital, try to implement your idea in a test way and measure the results.
Mistake 2: lack of focus and unmeasured actions
One of the mistakes of startups is a lack of focus and improper actions. As we said, most startups are in a hurry to make a profit as soon as possible, which makes them act without thinking. They don’t get advice from experts, they ask for cooperation without a document of increased profits, and they enter social networks without properly knowing the target audience. All these actions cause startup failure.
What is the solution to this problem?
The solution to this problem is summarized in two cases:
- target audience
- product
Try to talk regularly with your users or customers, get feedback from them, and improve your product.
Mistake 3: Not having a good team
Some startup founders expect to be able to provide the best product with the least amount of human resources and the least cost. If this happens, it will never happen. One of the characteristics of successful startups is having a good team. Coordination team that works regularly and every one pursues specific expertise.
What is the solution to this problem?
Team building in startup. Having a strong, expert, and flexible team is one of the must-haves of a startup. An expert person can make your startup grow and flourish beyond belief, while an unprofessional person can destroy everything in the blink of an eye.
If you still haven’t found a reliable and professional team, put the start-up out of your mind and don’t allocate funds to it. Of course, just to get the job done quickly, don’t hire someone you don’t trust, and don’t make an emotional decision. Because correcting one person’s mistakes will take more time and money from you.
Mistake 4: Premature scalability
Startup scalability is the ability of a startup to grow further and operate on a larger scale. without limiting its financial or human resources. The dream of every startup is to grow and grow more. No startup wants to remain a startup until the end.
The mistake most startups make is scaling too early. That is when the startup is not ready to enter a bigger market. A 5-year-old child will get lost if left in a big street. Therefore, a startup must first reach enough maturity and then enter the bigger world with strength.
You are not ready to scale if you have the following characteristics:
- You don’t know the customer lifetime value (LTV) for your startup yet. (price * repeat purchase)
- You don’t know the cost of attracting your customers.
- Your business model is not updated. (It means that you still don’t have a specific method to attract customers)
- Most of your time is spent on startup operations and you don’t pay attention to strategy.
What is the solution to this problem?
The problem you want the customer to solve must be big enough, and in addition, there are enough customers in the market for you. (Grand Market)
Lower your customer acquisition costs enough and increase your revenue by the same amount to reach profitability. In fact, in this method, you have to optimize your conversion channels and find a way to retain and maintain customers in addition to attracting them.
When you reach a point where your customer acquisition cost is less than your customer lifetime value (LTV). You can gradually think about scalability.
In this article, we talked about the concept of a startup, its tips, and ideas. What is important is to focus on your idea first before launching your startup. If you don’t have capital, never despair and ask for help from accelerators. By reading about the history of many entrepreneurs and startups, you will conclude that you will reach your goal by having pure ideas and effort.