10 Best Practices for Start-Ups when Starting Out
PBO Advisory Group recently had the pleasure of presenting a webinar with our client LogicBoost Labs, which provides support and guidance for start-ups.
Here are some of our favorite pieces of advice about best practices, based upon our presenters* years of experience working with start-ups.
- Nicole Devine, Consulting Chief People Officer – PBO Advisory Group
- Josh Frankel, VP of Marketing – LogicBoost Labs
- Michael Millstein, VP of Sales – LogicBoost Labs
- Know when you are really ready to get going and are in start-up mode. To get started and to attract investors, you must have an MVP – Minimum Viable Product. You are not a start-up business if you only have ideas and don’t have something to sell that the market needs. You also need revenue as it is the strongest validation of market traction and product market fit. No revenue = no company.
- Become a C Corp. By using this formation, you may qualify for a Qualified Small Business Stock (QSBS) tax credit that may allow a founder to take up to $10 million tax free dollars upon an exit.
- Be careful how you give equity. You need to be strategic and not dole it out carelessly. You may find yourself without enough equity left to attract big investors.
- Trust your data. Good data is necessary. You must understand where your revenue is coming from to make credible projections. Data makes a big difference in understanding your buyer, so you aren’t just making assumptions. Trust the data as a foundation for making the right business decisions.
- Set your core values and then let them guide you. What was your intent, purpose and mission when you started this venture? These should be the drivers of your values. Use these values as your north star to guide you. Be ambitious but be realistic, be aspirational but actionable. Core values will not only help you in making the right business choices, values will also help you hire, retain and reward the right people. And they will help you establish and grow your culture.
- Don’t gift titles. Early on, many start-ups give big titles to employees. As time goes on, the needs of the company grow and the titles may no longer fit the employee’s skills. This can inflate salaries. It also isn’t fair to the employee to give them a title that exceeds their skills. Once you have given a title, it’s hard to take away.
- Don’t fill all positions with employees. Fill high-level positions by hiring experienced fractional employees. They can help you build strategy and move your company forward. A part-time CFO or CMO still gives you access to subject matter experts without hiring an employee that you can’t afford and/or don’t completely need.
- Lack of focus is where founders most likely stumble. Don’t get distracted by chasing new things and different options. Set a course and lead your company by following it. Evaluate any pivots carefully.
- What commonalities do you see among successful start-ups? They fail fast and then pivot. They listen to the market and aren’t afraid to make changes to their product. Leadership that has the foresight to inspire others and makes decisions that are in the best interest of the company. Founders who know that they aren’t necessarily the best person to move the company forward.
- What commonalities do you see among bad start-ups? Founders who are afraid to fail and won’t move fast enough to succeed.
To learn more, listen to the complete webinar.
Is LogicBoost Labs a good fit for your start up? Visit their website or read PBO Advisory Group’s blog post about the organization to learn more.
For more information about how PBO Advisory Group can help you, please contact Francesca San Diego or Nicole Devine.
Consulting Chief People Officer
858-622-1681 Ext. 287