What to look out for and how equity can help set your company up for success going into the new year.
With the new year approaching, we take a look at the various stages of a business and the common milestones that one should aim for along the way. What stage are you in right now? And where will you be next year? We talk more about how companies and businesses can achieve this and how equity offerings fit in the overall picture.
If this past year had an overarching theme, it would be “uncertainty.” The ongoing global pandemic and the new virus variant have been major contributors to this uncertainty. But there have also been unpredictable changes in markets and industries as they try to adapt to the new business environment. Some of these new developments are attributable to the pandemic (e.g., remote work, restricted travel), while the others are completely unrelated (e.g., the metaverse and NFT craze).
A business surviving and operating during these uncertain times is truly remarkable. So that’s something to be grateful for. For those not so fortunate, the incoming year presents a lot of opportunities to try again.
Milestone No. 1: Develop a good business idea
We believe that this is every entrepreneur’s first major milestone. Not everyone considers this as an achievement, but we beg to differ. If business success was a tower, this is the very first brick that you will lay as you try to slowly build it. It is the very foundation of your tower, as every other business milestone is reliant on a good business idea.
But what we are talking about here is not just any business idea. It’s something that you have been thinking about and refining for years now, or perhaps it's an opportunity that’s now available due to recent market, industry, or technological disruptions. You’ve figured out how to do it—development, logistics, marketing, and sales. Everything else is set except for the actual implementation.
Many companies have started out and raised funding or recruited key workers and contributors on a great idea alone. So, give yourself a pat on the back. This is an achievement in itself.
Milestone No. 2: Your first (paying) client or customer
If you are still unsure as to whether you have achieved milestone no. 1, achieving this milestone would help clear that doubt.
To do this, you need confirmation that your product or service solves a specific problem. This is what’s known as finding a good market fit. You achieve this by finding at least one person who believes that your business provides value to their lives or their business. It can be a family member or friend, so long as they are willing to pay for it. By paying for your product or service, they are recognizing that your business idea is a net positive to the world and is something that is worth supporting.
There is a lot to be said for free beta testers in order to solidify your offering, but ultimately you should aim to upsell your free users into paying users. If you can’t convince someone that has used and likes your product or service to pay for it, then it’s going to be twice as hard to gain satisfied paying customers that do not know what or how your product works.
Milestone No. 3: Forming or growing an awesome team
You‘ve got your first paying client(s) or customer(s). So how do you get things to move along? It is usually at this stage that most founders and small teams realize that they can’t do everything themselves and need a few more heads and hands to ensure that things proceed as planned.
There is a common major obstacle in achieving this milestone: a shortage of skilled and talented labor. In one of our previous blog posts, we talked about the ongoing fierce competition for top talent with bigger and more established businesses having the upper hand. This forces small to mid-size companies to adapt such as by attracting talent through good and effective equity plans.
Finding and hiring talented and awesome people is a major milestone that is not often celebrated. It is not an easy feat with the rising costs of salary and wages. Plus points if you manage to recruit them with equity offerings as it is a testament that they believe in the potential of your business direction and vision.
Milestone No. 4: Being “in the green”
Getting a new business started is a huge investment of not only time but money. You have probably been operating at a loss ever since you achieved your first three milestones. To achieve your next milestone of ‘getting in the green’, you have to go beyond just breaking even; you need to actually start generating a positive net cash flow.
You achieve this by building a loyal customer base and growing your brand with a devoted and strong community. Their support will be key to your company’s financial success and will keep you in the green as you seek to keep on growing.
There’s a lot of ways to do this but one unique way that we suggest is to engage your community members as contributors to your company or business. If you can make it easy for your community to gain value for sharing or contributing to a project that they love and believe in, it’s a win-win for everyone.
Milestone No. 5: Make it scalable
This is the stage when you first realize that there is so much room for your business to grow and improve. It’s like reaching the summit and finding out that there’s a nearby higher mountain that you can climb. Now is the time to make sure that your business model is scalable, or if you already set it up to scale from the get-go, it’s time to make sure that your initial idea is growing in the direction you thought. If not, it may be time to pivot and readjust your future roadmap based on current and potential customer feedback and market opportunities.
You won’t get there without retaining the awesome team you were able to form. However, people come and go for different reasons. Hence, you also need to make sure that you are able to keep attracting the same quality of people that enabled you to reach this far.
Beyond that, you also have to ensure that you keep everyone’s spirit and productivity high as you try to aim for loftier goals. If you have bootstrapped your company up until this point, now may be the time you need to look for investors, and this is where equity management solutions like Upstock can help you.
To expand and scale you will need to set priorities and allocate your resources efficiently and officially. Good management decisions will be very important as you try to strike a balance between competing needs and interests. As the business grows and gets bigger, the challenges you face will also grow in difficulty.
How Upstock and Uptoken can help achieve your milestones
Whether you are just starting out or already looking to expand, equity plans and management solutions like Upstock provide you the necessary tools to attract and retain top talent, boost worker productivity, and manage cap tables efficiently. Our latest innovative offering, Uptoken, extends these benefits to crypto companies that are also looking to achieve their own milestones for the upcoming year with token-based incentives.
Let us know if you are interested in knowing more about how equity and equity-like plans can help you achieve your business goals by reaching out to us here.