Considering leaving your job to pursue your own startup? Here are four tips for how to set yourself up for success.
When is the right time to leave your full-time job to pursue your startup dream? The truth is, it will always be a tough decision. People often say, “there is never a ‘right’ time to have a baby,” and I think the same sentiment applies to venturing away from a stable income to start your own company.
Here are my four tips to build the foundation necessary to succeed with your new company:
1. Build a solid team.
This is crucial for setting the company up for success. The most important foundation for your company is its PEOPLE. I believe that there is power in numbers and it is imperative to have a team that can handle all the different aspects of the business.
I have tried running a startup on my own and it is almost impossible to create a sustainable business this way because you don’t have enough support to handle all the moving parts. My best advice on assembling a team is to make sure that each member has different, complementary strengths. The best team, in my opinion, consists of one person who is good with numbers and can handle accounting and finances, another person who is good at sales and marketing and can communicate effectively with customers and investors and another person who is detail oriented and can handle operations and the administrative aspects of the company.
2. Create a concise business plan.
Once you are able to clearly define what your business will do, you will be able to hit the ground running. Don’t be overwhelmed by the prospect of writing an 100-page business plan. Instead, follow the advice of venture capital firms and limit your business plan to twenty PowerPoint slides. Your abbreviated business plan should be short and sweet and it should contain the following elements:
● Mission / Vision: One sentence that defines the goal of your company.
● Problem & Solution: What is the problem your company aims to solve and how does your company provide a solution?
● Market: How big is the market? What is the is the size of the opportunity?
● Plan of Action: What steps will you need to take to achieve your goals?
● The Team: Who is on your team and how will each person contribute? How have you defined the roles?
● The Financials: Outline how much your startup will cost to launch and how you plan on monetizing it.
Sequoia Capital, one of the largest venture capital firms, provides an excellent guide for creating your business plan. You can find it here: https://www.sequoiacap.com/article/writing-a-business-plan/. I think it is important to have your business plan completed and polished before leaving your day job.
3. Save up and prepare to live on tight budget.
Changes to your budget and lifestyle will likely be one of the toughest adjustments that you will have to make when you leave your full-time job to create your own company. Living on a tight budget is essential when starting your own venture because you probably won’t have a steady stream of income for several months. My best advice is to consider less expensive living arrangements, as rent tends to be a high expense. Maybe it’s time to sublet your cousin’s guest bedroom?
I would recommend saving up enough money to sustain your living expenses for at least nine months. Running out of cash is one of the most common reasons that startups fail. In order to set yourself up for success, you need to make sure your reserves are plentiful enough to last until you generate income or raise money.
4. Identify at least three mentors to support and guide you.
My experience has taught me the importance of having mentors and advisors who can help guide you in the right direction. Before you make any decisions, identify at least three people that you trust and respect to mentor and guide you. Preferably, these individuals work in your field of interest. Your mentor could be a former colleague, a family member or a friend. Tell your mentors your plans and ask for their opinions. Having a third party opinion is extremely valuable because it will make you think of potential roadblocks and issues that could arise. Inevitably, your mentors and advisors will ask you some tough questions that will encourage you to develop your business plan more thoroughly. Additionally, they will serve as a sounding board if and when you need help.
Mentors and advisors are crucial because they act as a support network. Creating a strong support system will make your startup experience smoother.