Tough Decisions All Startups Have To Make In The First Year: Pixabay – CC0 License
Launching a startup is never easy. You have to work long weeks, meet dozens of people, convince investors you can generate returns, and create a viable product. But on top of that, you have to make a bunch of tough decisions, many of which have long-term ramifications for your enterprise.
Here are some of the tough decisions that all startups have to make within the first year, and some guidance for which direction to choose.
How Many People To Hire
Startups usually don’t have much revenue, especially during the first year. Instead, they rely on their creditors. Saving cash, therefore, becomes an overriding concern. New businesses are continually looking for ways to optimise their resources.
For many startups, the most expensive decision is who to hire. The more professionals you get to join your organisation, the more likely it is to create a viable product in time. But, at the same time, the more money you burn.
The best way to deal with this conundrum is to know your endpoints. If you know that hiring more people will allow you to get the job done in twelve months, then explain this to your investors. Try to avoid a situation where you get less money than you need and must compromise.
Who Will Do Your Marketing
Startup founders face a stark choice when it comes to choosing who should do their marketing. The graphic design agency vs. freelance graphic designer continues to divide opinion.
Founders should think about the scale of their needs. Some B2B companies, for instance, require relatively little marketing expertise and can usually rely on a lone freelancer to get everything done. Others, however, need to market at scale, implying that they should choose a marketing agency.
Determining who should do your marketing is a big decision, mainly because of the long-term costs associated with these services. Think about whether your enterprise requires marketers to scale with you, or whether you just need one-off material. That will tell you which you should choose.
Who To Compete Against
Startups tend to have visionary founders – people who focus on the end-goal and then work back from there. The problem with this methodology is one of cost. Getting to where you want to be from where you are right now often costs a lot of money.
Companies, therefore, need to whittle down their focus and decide who they’re going to compete against. Startups need to have a clear idea for why they’re better positioned than anybody else to take on the market and win. They need to focus on a niche and build success there before branching out into new and risky areas.
When To Launch
Some startups work in incubators for many years, attempting to design and build products. Others are ready to go in a few months.
Knowing when to launch, however, is vital. Many startups are five years ahead of the market and wind up launching a viable product too early. Others wait too long and leave market share to their rivals.