California giants Google and Facebook emerged at the outset as startups. Although entrepreneurs have found much success in the state, the creation of new companies has slowed. The launch of Facebook represents that last big success story. Leading companies have become adept at recognizing rising stars and buying them before they create substantial competition, as illustrated by PayPal’s purchase of Venmo. In this climate, entrepreneurs hoping to raise their big ideas to prominence need to stretch every dollar and find innovative methods for hiring talent.
Managers of startup companies should avoid overspending on equipment, supplies, and software. A study from CB Insights warns that nearly 30 percent of new businesses deplete their funds before generating enough income to go forward. To keep operations lean, entrepreneurs could have supplies delivered instead of paying employees to run errands. A coffee machine easily replaces a pricey coffee service, and free or inexpensive software often meets needs just as well as expensive software subscriptions.
Competing for talent represents another challenge for new companies because the prestige and high pay associated with working for an established company creates a high hurdle. Entrepreneurs could seek out talented people in their local communities. Qualified candidates looking for opportunities might be in an entrepreneur’s backyard. Outside-the-box recruitment tactics like social media posts and soliciting people at fitness gyms could prove productive.
Legal advice might also play an important role for an entrepreneur starting a new venture or hiring contract employees. An attorney familiar with business formation and planning could supply insights about how to choose a business structure. A legal analysis of the business plan could also help in refining an approach to potential investors.