What makes a small business successful? How does a start-up go from being just an entrepreneurial endeavor to a thriving company? As someone who has worked at a small but flourishing business (a POS software company) and someone who has attempted to start her own e-commerce site, business proprietors and prospective entrepreneurs should gain some insight prior to embarking on their own start-up adventures. This can prove extremely valuable whether you are contemplating expansion into multiple sushi bar franchises (ahem, Nobu Matsuhisa, Nozawa, et. al.) or just starting, say, your own bar POS software company.
Know your numbers
I’m in New York this week and, in between mixing business with pleasure, I’ve spent some time discussing start-up successes with a venture capitalist. I’ve also watched ABC’s Shark Tank for the first time. One angle that became immediately clear is that, in order to start a company, an entrepreneur must have a tangible concept. While Kandinsky might have gotten away with abstractions, if you can’t physically show a potential investor what the concept is (e.g., a visual of how bar POS software works) then it is highly unlikely s/he will invest. Start-up founders must know that their business will scale. No one will invest in a company that can’t project a profit, even if that profit is envisioned several years into the future. Once you’re past the product pitch, make sure you don’t make a bad deal with an investor. For instance, don’t agree to give more than 50% equity to an investor and then x amount in perpetuity once the business is profitable; if you want to maintain control of your project, this will not cut it.
Fluid for the future
One trend that most companies could not envision several years ago was the move toward mobile. This is not just applicable for mobile POS; it has, in all actuality, hit the advertising industry the hardest. Facebook is widely considered to be a successful company. Yet, following its IPO its stock value plummeted. Wonder why? Because nervous investors could not envision a way the company could make money.
The same can be said for nearly every business that maintains an internet hub. One must roll with the punches. Would-be entrepreneurs starting e-commerce sites should consider it a given that they must plan on a mobile format. The more consumers move from laptops to smartphones, the more shopping will be done on the run. Even more revolutionary is the predicament of the once ubiquitous Adobe Flash Player, which will either have to become available to iPhone users (so they can shop from their phones) or will inevitably go the way of the dodo bird. As for us, more restaurants and retail stores are moving toward mobile POS systems than ever.