photo credit: .faramarz

A budget is a detailed document showing the spending and revenue of a business. It concentrates more on reporting expenses and trying to control them. Its a reporting and controlling tool used widely amongst businesses of various kinds.

Yes, budgets are a great tool to keep all expenses in ‘control’ but are they necessary for a startup? For a startup, budgeting should not be a priority. At the ‘startup’ stage, you don’t have much to budget about. Whose expenses are you going to control? Yours? Or another 2 – 3 employees?

Creating budgets, perhaps, will be useful when you are a few years into your venture. A static budget at an early startup stage is of no use.

So what startups need to do is not ‘budget’ but ‘forecast’. Forecasting is more flexible, dynamic and relevant to a startup. It is less rigid and detailed, and can be updated regularly to reflect changes in the company.

The article below explains the importance of forecasting for a startup and how it can be done:

http://anthillonline.com/why-startups-dont-need-a-budget/

photo credit: mkosut

At a certain point of time, “being virtual” loses its appeal, especially if you hire new team members or it isn’t possible to work from home. As a startup, you’re on a tight budget and at the same time it is important to have a good office space for your team. A trade-off between the two is an ideal win-win situation for a startup.

A small suggestion here to all startup businesses is that look for an inexpensive office that will help you survive in the initial period. No private office, prime locations, pretentious architect or sixty story buildings.

Here are a few other points you should keep in mind when looking for an office for your startup:

1.  Don’t get carried away with too many choices. Try being more decisive
2.  Try striking a good bargain whether buying or letting
3.  Find a balance between what your clients expect, a good price and the kind of atmosphere your team will be most productive in
4.  Identify all parameters when choosing your office space. Location, size and price are the obvious ones but also think about access to extra amenities (coffee shops, communal areas), parking, atmosphere, furnished/unfurnished and security.
5.  Avoid agents and try doing your search. Make a good comparison of available options
6. Stick to being conservative. Don’t lease expensive premises the moment money starts coming in. Wait for a good three to five years before taking such a step.
7.  Find office space that comes with tax benefits

You can also use the “SPACE” test to get a good deal on office space:

                     S- Savings, P-Productivity, A-Address, C-Clauses, E-Expansion

To get more insight on the issue, we recommend you read:
http://www.coachwei.com/blog/2009/11/09/a-geeks-guide-to-startup-office-space/
http://thenexttrain.co.za/2009/03/6-tips-for-finding-start-up-office-space/

photo credit: Ahmed Rabea

The decision to extend the scope of your business by launching a startup must be a result of thoughtful consideration of various factors – financial, logistical or even emotional readiness. Launching a startup from an existing business can be as overwhelming as launching a startup from scratch, after all, your existing business reputation is at stake.

A common practice is to launch a startup relating to your existing business. For example: If you’re an existing subscription based social networking website for teens and you decide to ‘startup’ a social networking website for working moms.

The chief advantages of launching a startup from an existing running business are;

1. Familiarity with the whole ‘starting up process’ – chances that you already know some of the challenges and issues that may come up in the process.
2. An existing community for your product/service – knowledge of the industry and experience will help create a buzz for your new offering.
3. Funding will become easy (bootstrapping or external investment)
4. Expansion of revenue stream

For more information on the above idea visit:

http://thestartupist.com/2010/01/launching-a-startup-from-an-already-successful-business/ 

photo credit: M i x y

Let’s start by explaining what Inbound Marketing is all about – the style of marketing that focuses on getting found by customers (when they need) and not ‘pushing’ your product or service (referred to as Outbound Marketing) is known as Inbound Marketing.

As a customer when you need to buy a product/service, you don’t solely trust the ad or newspaper release. Suggestions and feedback from friends, family and other customers influences your decision in a big way. And getting this ‘feedback’ has become so much easier with the advent and rise of the Internet and Web 2.0.

All you today need to do this type your query in a search engine and here you go! You have hundreds of reviews, suggestions, feedback (negative too) in one search. Traditional Marketing methods are effective but with the rise of Web 2.0, inbound marketing is definitely the future.

Now as a startup you need to go out there and market your product or service. Inbound marketing is the one stop solution to all your marketing strategy confusions. Your website, SEO techniques, blogs and social media like Facebook, Twitter, LinkedIn etc all come under the Inbound Marketing umbrella.

 As a startup you gain the following benefits from Inbound Marketing:

1. Better Relationship Management – which can lead to higher prospects to client conversion
2. Loyalty factor can lead to more sales
3. The methods of implementing it are far less expensive and as a startup you can’t spend heavily due to financial constraints
4. Easy to use and ready-made tools available online

Inbound marketing can be related to what Seth Godin describes as ‘relationship marketing’ which can turn out as long-term strategy for your startup business if implemented wisely.

Three quick points for Startups: Content, SEO and Social Media

(1) It Costs Less - Outbound marketing means spending money - either by buying ads, buying email lists or renting huge booths at trade shows. Inbound Marketing means creating content and talking about it.

For more information visit:  http://blog.hubspot.com/blog/tabid/6307/bid/4416/Inbound-Marketing-the-Next-Phase-of-Marketing-on-the-Web.aspx

Whether you’re a startup, small business, medium business or a huge firm, your brand value is gravely important in distinguishing you from your competitors. Unfortunately, the brand positioning is not taken seriously in the small firms. Most of the small businesses don't realize the value and the intent of positioning their brand as a trenchant marketing tool. Branding doesn't have to be too expensive or overpriced, but it does need to be in tune with your goals and markets.

Here is a skillful post by Stoney deGeyter on why branding is important: http://www.searchengineguide.com/stoney-degeyter/why-branding-matters-to-small-businesses.php

A solid branding strategy is important for any small business and should be a part of your online marketing efforts. If you're like most small businesses you are more concerned about selling products or services than in establishing a name for yourself. Why go through the effort? Simply put, branding helps sales.

 

Don't start up your own business because you want to be your own boss. People prefer to become entrepreneurs for a variety of reasons. For some it’s a chance to get rid of their mundane nine-to-five routine while other wants to devote their lives to something that is much closer to their hearts.

Here are a few actual reasons by George, why you really should give it a try and start up your own business: http://www.onlineinvestingai.com/blog/2009/07/14/5-reasons-to-start-your-own-business/

2. No such thing as Job Security
People used to believe in job security. They thought that if they spent decades working for a company, the company would take care of them and give them money for retirement. Many people even thought that they could not be fired because they had been working there for so long. That seems like a pretty dated notion in today’s globally competitive world. Even unions, which attempt to ensure job security, cannot survive when their employers and industries disappear.
 

Starting up a small business is always speculative. Despite of the better success rates, a substantial percentage of young businesses do fail. As a general rule of thumb, startups have a 50/50 chance of outlasting for five years or more. However, there are certain key factors that if followed – the success will be certainly yours.

An exhaustive post by Shaila Rao can give a fighting chance to small businesses and startups against the spiraling downward: http://www.p2w2.com/blog/index.php/top-5-reasons-why-small-businesses-fail/#comment-914

4. Poor Management                                                                                      Poor management ranks high on what not to do list of business owner. If you lack current and relevant in formation in finance, purchase, selling, production, hiring and managing employees, get help!