Starting a new business can be overwhelming. Planning business formation, business plan writing to getting funds to operate - basically just trying to find the right theoretical model to apply can feel difficult. In fact, the reason why most entrepreneurs stumble right in the beginning is simply because they lack a basic understanding of their own business, or it's unclear.
While many believe finances and managing cash flow is a leading cause of startup failure, in reality the biggest problem is the lack of market need (which, of course, will impact cash flow). This, of course doesn't mean that there is no markets for that startup, but perhaps the idea or the product wasn't clearly articulated and hence, is missing out on important market opportunities because needs aren't created with unclear communication.
If you are a startup entrepreneur, be sure to consider, understand and be able to articulate these four S's before you try to apply any other acronyms or theoretical quadrant to your business
Make sure you identify what problems or needs of your potential customer your service/product solves. Are there niches that are overlooked by the markets, if so could you cover them? How does your services improve the lives of consumers or does it?
Whether you produce a tangible product or are providing a service, the number one priority for your company should be delivering value for the customer. In order to do so, you need to fill a need, or successfully create one, to make a difference and improve the lives of consumers.
In simplicity: If your product doesn't bring value, then it is just noise.
Can your system produce and deliver the product or service you have created? How is it conducted? Could it be out-sourced?
When you have an understanding about the markets, the next step is to determine how your services are delivered to your customers. If you don't have the capacity to produce and deliver your product efficiently, you'll probably need to find partners to do it or enter licensing agreements.
How do you reach and find your customers?
How do you get your 100 000th customer?
How will you scale the business in size?
Do you plan on raising money, taking partners or eventually exiting?
Great ideas often and quickly fizzle because the business runs out of money or, worse, enthusiasm. Avoid this with a simple business plan and short & long term goals that lays out your vision and strategies for your startup. These don't have to be permanent, but they lay the groundwork for the future and remind you what your working towards.
You should start by creating a personal vision for yourself and the company. Include short- and long-term goals for both, so that decisions you make for the company satisfy your personal goals as well. While flexibility is crucial, having a plan helps you stay focused.
The harsh truth is that most startups fail, understanding that and the fear of failure prevents many from ever taking the first step of starting a company. It is also likely that one will not be successful in their first business endeavor, but to become a great entrepreneur it's essential to understand failure and endure a great deal of uncertainty and stress.
If you have spine, endurance and passion, no doubt you'll make your break at some point!