The American Dream no longer functions as advertised. In previous generations, those who got a college education were virtually assured to get a decent paying job. Working hard was a surefire path up the corporate ladder. At worst, you’d eventually get to be a manager, and at best, a vice-president.
Not anymore. These days, entry-level workers are lucky to hold on the same positions from one year to the next. The majority of these roles are contract positions, precarious in nature, with little hope of upward mobility.
A 2016 study tore the covers off this startling trend. Conducted by researchers from Harvard and Princeton University, it found that 94% of net employment growth between 2005 and 2015 occurred in alternative employment roles. This category included freelance, temp, contract, and on-call work, all characterized by low pay, unpredictable hours and a lack of benefits.
As a result of worsening conditions in the labour market, entrepreneurship is now viewed as a more viable path to the good life. What has changed? For one, global markets have never been easier to access for small businesses – thanks to companies like Alibaba, WorldFirst, and Kickstarter, barriers that dissuaded prior generations have now been lowered.
Nonetheless, founding a startup can be a daunting task. Even small businesses have a lot of moving parts, with things getting more complicated as operations scale up to serve more customers.
In this blog, we’ll walk you through the steps of starting your own enterprise. From your first business idea to courting your first round of venture capital, it always seems impossible until it’s done. Let’s get started.
Coming up with an idea
This is the step many entrepreneurs get stuck on. Realize that entrepreneurs are problem solvers – they identify a pain point in a market, and they devise a solution to relieve it. People constantly complain about a million different things in their lives. You might want to start writing them down.
Next, focus on where these problems intersect with your area of expertise. For example, your friend Jim, who just got home from travelling overseas, might be complaining about the usurious ATM fees charged by foreign banks. However, since you lack experience in finance, there’s little chance you’ll be able to start and grow an alternative financial institution that refunds said ATM fees.
However, you do have ten years of experience as an environmental issues writer. Lately, you’ve noticed that green energy firms use substandard messaging in their ads and other communications. This would be an excellent gap for you to fill, as they are leaving money on the table with their meandering, vague sales copy. In this situation, starting a green copywriting consultancy would be a profitable move.
To hire, or not to hire?
While you’ll probably have to operate as a solopreneur in the beginning, you’ll eventually need to hire someone to help out with your ever-increasing workload. But how? After all, money is often scarce in the early days of a startup.
Some founders offer prospects an equity stake in the business. If you have a sound business plan that shows a clear path to market domination in the near to medium term, they may agree to these terms.
Unpaid interns are another viable option. These employees can be recruited from local colleges – despite not drawing a salary, they are often motivated workers, as they view course credit and positive references as their reward. On top of this, you’ll also get a free look at talent who can be brought on later as full-time staff.
Ironically, hiring contractors is another direction you can go. While you’ll have to pay these workers, they cost less than full-time employees, as you are not obligated to provide benefits or fixed hours.
However, do avoid treating your temps as dispensable labour, as this will negatively impact productivity and the climate of your workplace. Instead, treat their tenure as an audition for a full-time role. If they have met expectations by the end of their contract and you have the capital to hire them, do so.
Is it possible to run a startup as a solopreneur?
Building a startup as a solopreneur is an exceptionally difficult undertaking. However, by leveraging tools that have popped up on the internet over the last decade, it can be done.
Administrative tasks are your first concern – to keep your focus your efforts on high-level activities, these time-consuming but necessary chores need to be automated or streamlined. Bookkeeping can be easily handled by programs like Quickbooks, social media posts can be run through Buffer, and filters in Gmail ensure you’ll never miss a critical e-mail.
Next, you’ll need to learn how to do things full-time hires would usually handle. Hubspot is a great place to learn how to sell and market on the internet, while Zendesk offers an excellent primer on how to build customer service infrastructure from the ground up.
Finally, don’t be afraid to lean on freelancers when workloads become extreme. Having a rock star content writer on retainer that can take the reins of a critical assignment while you attend to serious accounting issues is an ace every founder should have up their sleeve.
Raising venture capital
Past a certain point, most startups will need a significant cash injection in order to reach the scale needed to serve customers around the world.
Traditionally, founders have sought out the assistance of venture capitalists. While they also offer mentorship opportunities, startup owners are starting to shun these arrangements. Why? To them, surrendering control to stakeholders who don’t understand their niche is unacceptable.
For this reason, crowdfunding has become an increasingly popular alternative. By bringing their idea to the people instead, hundreds of thousands of entrepreneurs have managed to receive funding that is mostly strings-free.
However, it’s important to note there is no guarantee a project on Kickstarter or IndieGoGo will get funded. For pledged cash to be released, the entrepreneur needs to meet their goal within 60 days of the launch of their fundraising campaign. According to stats on Kickstarter, only 36.6% of campaigns hit their fundraising goal.
Learning how to be a manager
As your team grows, you’ll need to keep your charges on task. While you may be self-directed, others are easily distracted by a million different things: co-workers, their phone, social media are just a few examples.
First and most importantly, treat everyone equally. Playing favourites will create inequities that will inhibit the ability of your staff to work together. Office politics are a massive distraction in established companies – in startups, it can be lethal.
Relay instructions as clearly and concisely as possible. Write assignment e-mails using short sentences and plain language. Speak slowly and clearly in meetings and in one-on-one evaluations. Always ask if they understand – this alone can save hours of tail-chasing.
To keep employees on task, agree on production goals for the week, and check up on them regularly. Keep encounters positive, and do everything possible to get them past any roadblocks they’ve run into.
Finally, provide feedback to employees as quickly as possible following major assignments. The context surrounding key learnings disappears if feedback is delayed until a quarterly evaluation.
Don’t let age stand in the way of your success
Business is no longer an old person’s game. Increasingly, the best opportunities are arising in sectors like tech, where younger adults are the subject matter experts. Occasionally, though, you’ll run into older people that will disrespect you in some way. However, by knowing your stuff and standing your ground, you’ll command respect from most people you encounter.
If you are passionate about a niche or an idea, stick with it. Even if there are sectors that appear to be more lucrative, you’ll find a way to make the former situation profitable enough for you to live a happy, prosperous life.