Setting up an innovative firm at the cutting edge of the tech revolution is something that many entrepreneurs dream about doing – and with 2017 seeing a rise of over 50% in the number of technology related firms launched in Britain, it’s clear that lots of these people are actually following their passions. But it’s not easy, and there are plenty of hurdles you’ll need to overcome along the way in order to actually make it a reality. From finding the cash to fund the project to creating the perfect team, setting up a technology firm is something that will require a lot of creative thinking and hard work.
Sourcing funding
Before going any further with your technology firm dream, it’s sensible to get a plan in place for how you’re going to fund it. There are several options on offer, and all of them are worth considering. You could, for example, consider bootstrapping your operation: that means cutting back on expenditure wherever possible, to essentially build a product with costs kept as low as possible. The advantage of this is that you don’t have to cede equity at an early stage, which means you’ll be able to reap the rewards more easily further down the line.
You might decide you definitely need a funding stream in order to get your business off the ground. Applying to a venture capitalist (VC) for cash is one idea: not only does that option hold the potential for a large cash injection, it’s also often the case that VCs can help with other aspects of a tech firm’s launch, such as strategic planning and office space. Some people also choose to approach friends, family and mentors in order to get the funding they need, although not everybody has this option – or wants to mix their business and personal life in that way.
Build a team
Having the right team in place is essential. As a start-up, you’ll need to think about getting a sales function in place as soon as you can. But as a technology firm, it’s likely you’ll need to hire some specialist IT staff – many of whom now work as contractors. That offers flexibility, but also presents an extra administrative burden – although once you have help with IR35 arranged, and have a good accountant in place, those problems become less difficult to manage.
Work hard
There’s no getting around the fact: working hard is a crucial component of successfully launching a technology firm. Applying for funding, for example, takes a lot of time and energy, and it’s likely you’ll have to do it more than once. Building a team may seem like a bit less effort in some ways, but it’s vital that you put the time and energy in to doing this properly because having the wrong people in the team can quickly jeopardise the whole business – which eventually creates more work for you.
If you’re thinking about launching a technology firm, there are plenty of reasons to press ahead. Not only is it an exciting sector in which to work, it’s also a lucrative one for those who are successful. And by thinking strategically about everything from how you’ll find funding to building that all-important team, you’ll give yourself the best possible chance of achieving success.
