We are almost at the end of May and weather is starting to get hotter by the day. This weekend, in particular, felt hotter than previous weekends. Temperature is almost the same as last weekend but I am feeling it a bit hotter. Maybe its because of Facebook. The company has created hundreds of millionaires in the bay area and things are really starting to get hot around here.
When we hear stories like Facebook, an entrepreneurial sitting in us may ask “how to start a start-up like Facebook ?”
A startup like Facebook means a very successful start-up. How do you do it?
Ingredients for a good start-up and well known. You need good people with great skill sets, make something that customers actually want and do it with the least amount of money possible. You don’t need to invent something new or come up with a super cool idea. You just need something that is much better than what’s currently available.
If the formula is well known than how come we do see IPO’s like Facebook every day?
I recently met with the CEO of one of the leading franchises in the United States who invited me to consult on their marketing strategies. After carefully listening to my ideas he commented that ‘I also have lots of ideas but we often fail to implement those.” This reminded me of a phone call a couple days with the CEO of a leading restaurant owner in Fremont. He made a similar comment. I meet with many business owners and CEOs of small and medium-sized companies and all of them have great ideas but they either fail to implement their ideas or invest in wrong ideas.
The truth is the failure is usually due to a lack of implementation. Some fail to put the right people in right place, some spend time, money and energy on the wrong product and some spend so much money doing it that they go brook long before they can become profitable.
Recently example of such failure in Silicon Valley was Solyndra. They picked the wrong product and spent millions of dollars in taxpayer money only to lose it all within months of initial government back funding.
How do you get the right people in the right place?
This one is probably the most tricky part. People involved within your company can be your relatives, friends and they may or may not be the right fit for the job. Do you keep running the show with them or do you find the right person for the job?
A common solution is to keep a friend or relative until the company becomes profitable. This strategy may work if you only have a couple people in the wrong place and they are not providing a substantial amount of support. However, most companies will fail if they continue on this path.
You need to find the right place for the right people.
Building something people will like?
This is what we call market research. Find the answer before you spend thousands of dollars. We are living in a computer age and you can research almost anything. You can hire professionals like Fixtro to do market research for you.
Gather all the information you need before you start. Some people even call this a feasibility study.
Doing it for as little as possible?
Should you open office in Stockton CA or San Jose CA? Should you travel or do video conferencing? Should you hire employees or consultants? There are probably hundreds of decisions you need to take to cut the cost on a daily basis. Good CPA or in house financial consultant can help you cut costs.
Some new business owners cut corners instead of cutting costs. Having a good CPA can help you avoid such mistakes. Good CPA can also help you keep most of your earnings in your pocket instead of paying it in taxes.
Ready to start a startup?
You can contact the office of Sanjiv Gupta CPA for tax and company advice and you can talk me to for business research and marketing.