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A re-post but still very relevant!
So the procrastination is finally over and you have finally decided to take the plunge to do something on your own! Well, congratulations for getting this far! Most don’t get to this point so give yourself a pat on the back!
This is where the going gets tough and can go really wrong if not done properly. As Steve Jobs once said, only when you look back, you will realize that all the dots connect. The same is true for a success or failure to a startup. Unfortunately, there is no crystal ball looking forward so trying your best to get it right from the start is your best bet.
There are really quite a number of ways but i will just list a few common ones
Your own money
Look into your bank accounts, look into your piggy bank and your wallet. The later the involvement of 3rd party funds, the greater your control. Look into your credit lines, your mortgages, your toys collection or any valuable assets that you can turn into funding.
Friends and family
If you really think you have a great idea and are willing to put in most of your money into this but still not quite enough, it is perfectly fine to pitch in friends and family members. However, if you are not putting up your own money for this, it means you lack the confidence, it is probably a better idea to consider going back to the drawing board and further refine the idea. Convince yourself before convincing others. Make money together.
Seed funding, government grants
If you have groundbreaking technology or ideas, you can go for seed funding through investment funds , VCs ,angel investors or government. You will need to have a knack for powerpoint or prezi and be prepared to do animated presentations (repeatedly).
Starting the company
Depending on the nature of the business, partnership arrangements and the extend of your operations. You can either choose to incorporate the company or simply to operate out of your home. The general guide is that if you have multiple parties involved and different investment sources, it is best to do a proper incorporation in order to have accountability and clear line drawn of where liabilities stop. If you are the sole operator and source of funding, you can simply choose to start small and incorporate later when you are ready to take it up to the next level.
Many success stories come out of operations from the high school dorms or garage. No i am not suggesting that you start out there but the moral of these stories is bootstrapping. First time entrepreneurs might have this idea of grandiosity, to have a nice fancy office, multi agency marketing campaigns or hiring a PA to assist the new founder. This is the only scenario when you will realize that the money in the bank depletes faster than your hair falls. Most great enterprises today succeed by bootstrapping by choice or by circumstances. Oil majors make more money with oil prices being at $50 than oil prices being at $100. Why is that so? Oil majors put on so much corporate fat with oil prices being at $100 and at $50, that is when bootstrapping kicks in.
Instead of a web agency, get a freelancer. Instead of a fancy office, consider a virtual office. Instead of a media agency, pick up adwords yourself over youtube. When you don’t have more money, you need a better strategy and more effort.
I get this a lot, almost a million times in a year. Someone comes up with a new idea, they hit the internet and realizes that it has been done, gives up. In 2004 when Mark Zuckerberg launch Facebook, did he not know that friendster existed? When Grab was launched, did the founders not know that Uber existed?
Research, compare and improve. Research your own products/services, your competitors and do a SWOT alongside with a product mapping. These will allow you to know the strengths and weaknesses of you vs your competitors and be able to do it better. Let me give you an example so to put it in context(and a little ad for my employer):
Before Straits Virtual Office launched, did we not know that there are already many other Virtual Office providers in the market? Yes we do. So we identified that existing providers in the CBD will be very pricey with meeting rooms that are empty 50% of the time. The costs of these empty meeting rooms are passed onto the subscribers and you even have to pay extra for the meeting rooms when you need it. When providers have really good prices, you will have to sacrifice accessibility to collect mails or make do with some unknown building name for your company’s address. Some also give out vouchers/gift cards for new signups! All these are ultimately still padded onto the subscription fees as the costs have to come from somewhere right? So what have we done? We stripped away all the unnecessary frills, meeting rooms, gift cards and got ourselves a small grade A office at Suntec. A building name that is recognized all over the world.
Have a meeting? Why pay for a $20 per hour to be cooped up in a small office room? Use that $20 to take your prospects out for a cup of coffee @ any of the coffee joint around Suntec! Need privacy? We have partnership agreement with a facilities provider for a meeting room(with window) good for 6 at just $12 an hour!
So what product do we have? A virtual office address that is super prime,accessible and value for money, exactly what first time entrepreneurs needs.
You get the drift.
Go To Market
If you have a big marketing budget, hire a media agency and you are pretty much good to go but most of us do not have this luxury. Marketing takes up a big chunk of your expenses and ROI can be low if not done properly. The key is to know how your targeted market researches and consumes the products/services. You will want to be there to be considered when there is a need. Get creative and DIY when budget is low.
If your targeted market consumes and researches products/servics online. Go do SEM(Search Engine Marketing) and social media marketing. If budget is low, go learn ad-words, Facebook analytics and do it yourself. Explore partnerships, joint campaigns or viral content marketing. Consider a combination with offline marketing.
If your targeted market consumes offline and your product/services is a passive need, you will need to stretch your marketing budget for the long haul and maintain visibility. Strategic placement of flyers distribution, posters and sponsorship at events will be great. The best offline marketing campaigns generates the maximum number of eyeballs and attention. There was a newly launched beverage, simply hired a band and put them on a boat with their big logo and they started belting out hits on a river right in the city center. Crowds formed, traffics halted and needless to say, they got onto national news. Closer to home, I was on a MRT platform at Paya lebar staring into a building in front of me. I started noticing neon lights ad flashing from the inside of one of the window panels strategically at the eye level from the train platform. If it was their office space, it wouldn’t cost a dime more or they can simply approach the office and pay a small sum per month to rent a small panel of window space facing the train station! Now that is creativity at its best. Can you imagine the number of eyeballs it gets when SMRT breaks down(often)?
There is also above the line(ATL) versus below the line(BTL), where ATL is more mass media(TV, radio, internet) and BTL is more personal(brochures, roadshows, product demos).
Have a mix and match of offline,online, ATL and BTL. Think out of the box of how to stretch your marketing dollar. When sales is not rolling in as per expectation, you need to rethink the strategy and possibly increase the marketing budget. The temptation is high to reign in costs and decrease all expenses including marketing. That will be a fatal mistake as magic will not happen.
So there you go! They say the world is your oyster and the sky is the limits. Go reach out for it!