Don’t Be Too Confident
These days everyone with an idea thinks they have something worth millions. I know it sounds harsh but it’s true. I don’t want to start this listicle (that’s list-article) out on a down note but this is absolutely my number one “money related” piece of advice for start-ups and small businesses. Over-confidence is a mistake I’ve seen nearly every small business I’ve worked with make (especially when they’re in the early development phases). I don’t mean to discourage anyone – I love working with start-ups. They generate an irreplaceable energy that works best when it’s fed with positivity and opportunism. However, I am ever the realist and, given my experiences helping start-ups and small businesses get off the ground, most of them would have spared themselves many expenses if they had toned down the confidence and stared the facts square in the face. Small businesses and start-ups can save themselves countless, costly mistakes if they’re humble enough to double check their decision making processes and own up to missteps before they snowball into something much uglier.
Look for Government Grants and Federal Funding
I am always surprised at how few start-ups consider this option when it comes to looking for funding. Every year millions of dollars in government grants go unused and yet there’s hundreds of start-ups that will fail because of low-funding. I know applying for government grants is a work-intensive job and there are quite a few hoops to jump through, but landing a government grant reflects the credibility of your project and can be a lot easier than hunting down angel investors or dreaming about lucrative crowdfunding campaigns. Which brings be conveniently to my next point:
Do Not Over-Glorify Crowdfunding
Ever since popular sites like Kickstarter and Indigogo launched, crowdfunding has become the go-to funding source for start-ups. While I can definitely understand the appeal – what I do not agree with is the over-glorification of this funding method. Contrary to popular belief crowdfunding websites are not portals to free money because your startup idea is so brilliant. They are a lot of work and require just as much strategy as applying for a government grant or putting together a pitch for an investor – perhaps even more. Government grants and pitching investors typically requires making your startup sound appealing to a small group of people – a crowdfunding campaign, in contrast, opens you up to the masses. You better be ready to impress with a solid incentivization model not to mention a bulletproof fulfillment strategy if your campaign does well and you have hundreds of orders to fill.
Choose Your Channels Wisely
As simple as this sounds nearly every startup I walk into has already managed to mix themselves up with twenty different marketing channels each executing inconsistent strategies and they’re sitting there wondering why none of them are converting. There is an expression “never put all your eggs in one basket” – well that depends – how strong is your basket? For our purposes – how strong is your marketing strategy? You absolutely must start with a solid foundation: an impenetrable marketing strategy that clearly outlines which channels are going to convert for your business and why.
Trim the Fat – Aggressively
In this analogy the “fat” could be wasteful spending, MIA contractors, conversion-less marketing channels and a plethora of other resource-sucking black holes. Trim them off constantly. This is why I think it’s important for startups not to be overly confident. Second-guess yourself, double-check your work and doubt your project because it’s only from this humble frame of mind that you will be able to see and repair the flaws in your designs.
Don’t Be a Scrooge
Last but not least – don’t swing to the extreme of “overconfidence” and become a scrooge. There is a time for saving and a time for spending. I can’t count the number of times I have worked on a project and marketing channel after marketing channel is blocked over funding. You cannot make something happen out of nothing. Assigning your Marketing Consultant the task of creating something that “goes viral” is not a viable strategy. Anyone can clamp down on the purse strings in an effort to save money but you’ll end up suffocating your business. Strike a careful, well-researched balance and execute lucrative marketing moves when the data tells you too.
Want further advise about how to save and/or raise money for your startup? Reach out to me below – I’d love to chat.