8 key things entrepreneurs often overlook when starting a business

The very definition of entrepreneurship implies many twists and turns. Founders start corporations based on an idea, create a business plan for the way forward for the concept, hit the gas pedal, and off they go. Along this journey, founders are forced to make many quick but impactful decisions with limited resources and a vague understanding of what the results will appear like. They are essentially building the foundation of the house with no idea what the roof will ultimately appear like.

Many of those early-stage decisions are fundamental and grow to be much more significant as the company itself matures. Due to arbitrary and self-imposed goals and timelines, founders may miss key elements of building a sustainable business. Rushing may be met with regret later in a company’s life, costing time, human and financial resources, and potentially the company. In fact, in keeping with the U.S. Bureau of Labor Statistics, about 10% of startups fail inside the first 12 months. However, this percentage increases over time, with final long-term failure rate of 90%. Ultimately, the decisions we make today may manifest themselves years later, and their results may prove harmful.

Here are eight key steps founders overlook when starting corporations:

1. Shape your organization appropriately inside the appropriate structure

There are many structures that corporations can use when starting out, including LLCs, C-Corps, and S-Corps. Each has its benefits and limitations, and it is essential for founders to align the company structure with financial and tax goals. For example, an LLC could be a convertible bond structure composed of personal investors. To properly determine the best structure for their company, founders should outline their investment strategy and seek the advice of with a lawyer specializing in company formation.

2. Protection of their mental property

(*8*) property ought to be protected at the starting of organising a company, and definitely before introducing a product to the market. Companies should contact an mental property attorney to register trademarks for company and product names, logo designs, and any defensible product designs. Additionally, especially for technology corporations, patents should be filed before a product is dropped at market. Although the costs could seem high, especially at the starting, mental property can later grow to be a major source of value for the company.

3. Creating an appropriate team of advisors

While the incorporation stage could seem premature in terms of gaining a board of advisors, it may well actually be useful and even critical. The reality is that founders alone cannot acquire all the skills and experience bases essential to make sure positive results in the future. Even in the earliest stages of financing, the “team” is a key element for investors betting on the company’s success. Advisors can fill gaps in skills that are initially lacking and are an essential factor in an investor’s decision to take a position. Therefore, founders should assess the competences and shortcomings of their teams and officially hire consultants who will fill these gaps in experience/skills.

1. Determining the appropriate financing strategy. It is widely accepted that enterprise capital is the holy grail of investing and that the most successful corporations are built by securing VC money. VC money is great for some corporations, but there are also limitations – once a company secures VC money, a significant a part of its equity can be held by external entities, and these entities will later have a strong influence on the further decision-making process. Some corporations will want to grow at a different pace than VC funds would require, resulting in a mismatch. As a founder, it is vital to properly determine how much you care about the company’s success – by asking yourself what growth looks like and what a part of the company you are willing to part with in the future.
2. Assessing founding team dynamics and identifying gaps. While advisors may fill some skill gaps in the near future, the reality is that they do not work full-time at the company. Therefore, it is essential to discover current and future skills gaps in the founding/executive team, outline the roles needed to fill them, and create a hiring timeline. Some might not be essential until the next round of funding, and others could also be essential immediately.
3. Assessment of the current macro environment. While a founder may have the most progressive idea in the world, the current macroeconomic environment might not be conducive to supporting it. It is essential to review the broader macro environment in terms of openness to your product or service and the environment in general. For example, the market could also be ready for an offer, but the financing environment as a whole may have dried up. A sensible assessment will enable the founder to create a more realistic development plan.
4. Paving the way for them to the market. Founders could also be so enamored with their product or service that they forget to judge how they may communicate it to others. It is essential for a latest business to obviously define its core target market and the overall promote it is addressing to know how much it can cost and how long it can take to accumulate these customers.
5. Determining their long-term commitment/investment. Jeff Bezos stated, “It takes about 10 years for overnight success.” This couldn’t be more accurate. Entrepreneurs read the glossy social media accounts of corporations that immediately achieve explosive growth and experience a rapid hockey stick growth curve and expect success, but success takes time. Early on, founders need to evaluate their personal time horizons and determine how long they can be committed to their efforts. Part of this may increasingly be their personal involvement, especially if they have a family. Some of this may increasingly be financial – it’s crucial for a founder to know his or her personal financial runway. Hiring an outside executive coach or even a therapist can allow you to higher navigate these waters of life.

John Wooden, coach of the UCLA Bruins basketball team and considered the biggest coach in NCAA history, taught his players methods to put on their shoes and socks in a very specific way. When asked why, he said, “Little things matter. All it takes is one little wrinkle in one sock to give me a blister on one foot, and that could ruin my entire season.” Winning the entrepreneurship game starts with intention, and founders do all the things they will to intentionally put themselves in the best position to succeed. Apart from that, there comes a little bit of luck and a lot of fortitude, but it starts with proper preparation.