Note From Yoon:
Business Skills for the Consultancy Start Up
It may seem tempting to launch a consultancy startup rather than go to work for a traditional business. You’re your own boss, and all that you need is a group of fellow fledgling entrepreneurs, a dry erase board, a dream and a little seed money to put your innovation into action.
However, the real truth is that the lean startup model has a success rate of about 25 percent, according to research by Shikhar Ghosh, a Harvard Business School lecturer. If you are exchanging a steady shot at a corner office for a high-risk-high-reward startup consulting venture, you may need to assess your business school training to ensure you have the right stuff.
#1. Soft Skills: Maintain professionalism
You may have heard stories about Google programmers who walk around Silicon Valley wearing old T-shirts and long underwear because they are so valuable to the company. With a reputation for cultural creativity and out of the box thinking, startups can be more compelling than the traditional corporate model, but you have to learn the rules before you can break them.
- Be on time.
- Dress your best.
- Confidently present yourself to potential colleagues, clients and investors.
In a competitive startup culture, keeping these areas tightly organized on your own without corporate pressure guiding you is challenging and essential.
#2. Select compatible colleagues
In a startup, you need to take on the a human resources role and decide who will complement your skills and accomplish your mutual goals together. Search websites that can help you network and meet someone with similar business plans. Such as:
#3. Reduce the scale: short-term analysis
In the beginning stage of a startup:
- Launch the research and development
- Acquire potential customer feedback
- Make iteration changes daily
This is different than the analysis and planning you learn in business school intended for established businesses with a long-term outlook and slower, sustainable changes. If you try to logically find a solution from beginning to end on a dry erase board, the long-term projections will fall flat in the testing and development phase. Implementing quick changes is part of the inherent high risk and reward model.
Accounting is the same. Business schools often use three-to five-year financial projections, NYU B-school graduate Brett Nelson told “Forbes” magazine. Some businesses actually use 30-year projections. A startup can estimate the cost of salaries and office operations, but in the beginning the cost of producing the product or service, compared with the return on investment, is more intuitive than planned.
A startup usually has a lower seed cost than a brick-and-mortar new business because the model begins small and eventually advances with technology and mass implementation, which is where the investor money comes in.
At that point you will need to:
- Hire the attorney, accountant, insurance agent and other professionals
- In the beginning, bring out the dry erase board and your colleagues, and get to work! Explore all options and opportunities. What are your goals? What are your colleagues’ goals?
- Include business insurance that not only protects your assets, but also offers coverage for particular issues that a startup may be susceptible, such as data breach and interruption insurance.
Keep in mind also that your MBA skills will begin to pay off once a startup begins to grow into a larger version of itself that resembles the scale of a larger corporation. In the meantime, shelve the long-term planning and focus on the tasks at hand, one day at a time.
QUESTION: What one business skill has been vital to you succeeding as a startup consultant?