5 tips for launching a successful startup
A business professor gives her best advice for aspiring entrepreneurs.
You have an idea for a business. Now what?
This is the question Becky Prater, senior lecturer in the Center for Entrepreneurship at Metropolitan State University of Denver, helps answer for students and other aspiring entrepreneurs. In addition to teaching students in the College of Business, Prater leads Launch Denver, a free 11-week workshop designed to help participants get their businesses off the ground.
We talked with Prater to get a taste of the tips she offers during Denver Startup Week, which runs Sept. 18-22.
1. Know the WHY of your business
The TED talk by Simon Senik “Start With Why: How Great Leaders Inspire Action” discusses the why of your business. Whom are you serving, and what are their pain points? Consumers can see what you do and how you do it, but they ultimately buy into why you do it. For example, say somebody wants to start a coffee shop. OK, so you’re going to sell coffee? That’s easy. But why are you selling coffee? Is it because your parents are from Colombia and you have family members there who farm coffee? Maybe you want to build community for a particular group of people? Consumers want to join and support people they believe in. You have to communicate what that is, and then people will buy your product or your services.
RELATED: Business is booming
Congrats to MSU Denver alumnae Keisha Mathes of Herbal Honey and Chennelle Diong of GoodLove Foods who are semifinalists for Denver Startup Week’s pitch competition! You can support them at Finals Night on Thursday, Sept. 21, at El Patio from 4-6 p.m.
2. Understand the numbers
I’m running a “Money as Your Business Partner” workshop during Denver Startup Week. We’ll be exploring people’s relationships to money and talking about a healthy money mindset.
One question we ask when people are doing business is whether you know how much it’ll cost to provide the product or service and how much can you get for it. And so many people don’t know, or they don’t factor in their own time. You need to know where your money is going, where it’s coming from and how much you have left over in the end, i.e., cash flow.
Then, you need to know how much product or service you need to sell to pay your bills and make it worth your time. You need a target. For example, “I need to make $10,000 a month in order to pay out everything we need to pay and to pay me to do it.” It’s about sustainability of the business.
3. Establish the vision
Determine what you want and write it down in a business plan. People often ask, “Why do I have to do it? It takes so much time.” Well, I see it differently. I see it as a recipe or framework where you can plug in all your creativity and ideas and create a road map with steps, as well as long- and short-term goals. When you write it down, it makes it happen. A business plan defines the target and provides the GPS coordinates to get to where you want to go.
4. Research the market
The MSU Denver community and most public libraries have access to what we call IBISWorld, which is an industry database that can help you understand what things are the most important in the success of your business. You can look at industry ratios (or industry averages or cost-structure benchmarks) to tell you how much you should be spending on different aspects of your business such as marketing, rent, wages, purchases, etc. This helps entrepreneurs create financial forecasts that are based on real numbers rather than guesswork.
Additionally, you’ll want to find out who’s doing what you’re doing. Sometimes, we call this competitor analysis. Rather than see these people or companies as adversaries, look at competitors as people you can watch to see what they’re doing so you can do something similar. If they’re already successful, what makes them successful? Sign up for their newsletter. Watch their social; be a part of their community, so you can understand how they’re doing it and why it’s working.
Keep in mind that your business will have your unique signature and will be different, so it’s not copying — it’s watching others and using the information as a guide.
This is also a saving grace for entrepreneurs who feel they’re entering an oversaturated market. It may feel totally oversaturated, but the right environment or signature can succeed just by doing one thing differently.
RELATED VIDEO: Made in Denver: Molly Quinn Art
5. Integrate your branding and expertise in your digital marketing
We’ve come full circle to your why — the foundation of your business. Why do you do this? What’s your story? Whether it’s through blog posts, content on your website, email newsletters, tell your story and display your expertise. All these things will engage the customer.
The next-most important thing is mastering a set of keywords for all your content. Understand what people are Googling to find your company. What do they want to know about your industry, and what are they searching for? There are dozens of online websites that can help you find that out.