I recently read Startup from the Ground Up - Practical Insights for Transforming an Idea into a Business by Cynthia Kocialski. I love hearing from women who have been successful in male dominated fields. Cynthia Kocialski has been involved in more than twenty-four start-ups, all of which have been acquired for almost $20 billion.
While women are starting their own businesses in record numbers, you don't hear as much about women creating "startups." Wikipedia has this to say about startup companies:
Successful startups are typically more scalable than an established business, in the sense that they can potentially grow rapidly. Investors are generally most attracted to those new companies distinguished by their risk/reward profile and scalability.
In my research on the differences between men and women, I've found women business owners tend to grow their businesses more slowly and organically. There's nothing wrong with this business model. But certain businesses could benefit greatly by having a more traditional startup mentality, hiring an executive team and securing funding for faster growth.
Tips from Startup from the Ground Up
These tips are useful for all business owners, but especially for women business owners.
Seek outside advice. Kocialski points out, "Studies have shown that start-ups who seek outside financial assistance have a greater chance of success - not necessarily because they received financing, but because the perspectives of others who have seen numerous companies unfold is valuable."
Women business owners could benefit from hiring and seeking outside experts to help them with their business. While most women want expert advice, they aren't always willing to pay for it, looking at it as an expense rather than an investment. Getting expert advice sooner rather than later can have a huge impact on your success.
Have a long term plan focusing on not only making money, but increasing the value of the company and having an exit strategy. "Investors are most interested in how the start-up plans on increasing the value of the company. Interestingly enough, most entrepreneurs focus too heavily on the product and the technology."
When women business owners start businesses, they aren't necessarily looking down the road to how they can build a company of value that they can sell later on. Separating your business value from your value can allow you to set up an exit strategy where the business can function without you.
Don't be too conservative. "Entrepreneurs often think investors want to hear how their proposal is conservative. If the entrepreneur is conservative on the plan, investors won't believe the team will be bold enough to develop, promote, sell and grow the business."
It's fine to be realistic and have a contingency plan in place. But dream big. Don't limit your vision. Women can be wonderfully grounded in their expectations. But the most successful businesses set the bar high.
Get good at verbal presentations and don't expect people to read your full plan. "Most people involved in the start-up community are verbally oriented, so don't necessarily expect them to read the concept plan. Some will, but most won't.
In my research I've found women err on the side of including too much, rather than too little information in their reports. Don't expect people to read full reports. You're often lucky if they even glance through them. As a business owner you must be good at telling your story, in person, in a compelling and succinct manner.
Don't underestimate the importance of marketing -before and after the product launch. "A big mistake many start-ups make is believing product development comes first and marketing can be done later, and less strenuously. Most start-ups stumble in marketing and sales, not in technology. Marketing is not sales. Marketing tells people about your product, service, and company early and often. Marketing generates demand and sales leads. Evaluation of a company from an early stage investment perspective can put marketing at 50% of the funding decision."
Again, women can look at marketing as an expense rather than an investment. Women rely heavily on word of mouth, which is the ideal marketing venue. But if you want to scale your business quickly, you have to amplify your message. Have a marketing plan and have a real budget to support it.
Assemble a quality team that is different from yourself. "The fate of a start-up often hinges on the quality of the team assembled. People hire people like themselves. If a company is founded by Ivy League school graduates, many of the staff are Ivy League graduates."
Research shows women enjoy collaborating. Yet they are sometimes slow to hire people in order to grow their business, often multi-tasking and taking on many or all of the responsibilities themselves. When your business depends on your time, you are limited in how far and fast you can grow. Consider bringing in team members or employees with complimentary skills so you can focus on what you do best, and give the rest to others who can excel in areas where you don't. (And consider looking beyond your spouse for business partners who are different from you and can bring in a different perspective.)
Whether you're a high tech start-up or starting out with a small business, you'll gain valuable insights on how to develop, build, grow, and fund your business with Startup from the Ground Up by Cynthia Kocialski.