Startup Planning – Cost Estimation

Once you have decided the work breakdown structure of the startup, the very next step is to estimate the cost associated with each activity.

There are two factors that need to be considered while estimating the cost of your startup.

[ I ]You have enough budget – Estimate the cost associated with each activity that you have defined in work breakdown structure.

Eg:-

Website Design of E-commerce:-

  1. Domain Purchase = C1
  2. Hosting Plan = C2
  3. Website Build = C3
  4. Logo Design = C4
  5. Payment gateway = C5

So total cost of startup activities is ∑Cn (n=1 to n)

Here the target is to capture all the possible cost associated with each activity of startup so that in later stage you don’t find any abrupt change in your cost estimations.

Money

[ II ] You have limited budget – Here, the approach is reverse as used in the above case. You need to allocate the budget to each activity based on the priority.

One way of cost reduction is to outsource the minimum activities and do the maximum work possible by yourself.

Say your startup team need to hire website developers, so try to do the other work of website design like UI Design, Logo Design etc by yourself.

Eg:-

Website Design of E-Commerce:-

Total Available Budget = C

  1. Domain Purchase = C*X1%
  2. Hosting Plan = C*X2%
  3. Website Build = C*X3%
  4. Logo Design = in-house activity
  5. Payment gateway = C*X4%

So total cost of startup activities is ∑C*Xn% (n=1 to n)

Here the target is to allocate the budget to each activity in optimum way. You can decide the priority of each activity based on in-house and outsourced activities and allocate the maximum budget to outsourced activities.

CostReduction

Wish you luck for your startup.

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Startup Planning – Work Structure

When you are in the planning phase of your startup, it is necessary to capture all the work scope, major work or minor tasks everything.

Provided you have evaluated your idea and are determined to start your own venture, here is the list how to define the work scope of your startup.

Let’s take an example that you are planning to launch e-commerce website which is far away better than the existing platforms. Better is to start with the final output what is required for your startup and then break it down into small pieces of work.

WBS

 

 

  • Start with the list of activities in sequence that you need to do. Eg: for e commerce website, Website Design – Products Selection – Supply Chain Development – Marketing of Website – Execution and Control of Work. Let’s take only these five steps right now.
  • Now, list down the work associated with each step:-
  • Website Design:- You need to list down all the activities that are required to develop a website. Eg:- user interface layout, back end coding, social media accounts.
  • Products Selection: – Once your website is ready, you need a large product catalogue in it. So parallel to website development or in sequence, depending on the resources available with you, you need to manage your inventory or select vendors for your startup.
  • Supply Chain:- Once products are finalized, you  need to develop a supply chain to deliver your orders. So a strong logistics and supply chain management is required.
  • Marketing:- Once you are ready with the above stuff, you need consumers for your product. So publicize your startup as much as possible. You can also do this step in parallel to your website development to ensure the large market base prior to launch of the startup.
  • Execution and Control:– When consumers start placing orders on your website, you need to ensure the smooth execution of delivery.
  • Break down the activities again into small pieces as much as possible. It will give you the clear picture of all the work that needs to be done. Eg:- Social media account:- Google Plus, Facebook, Linkedin, Twitter etc.

Click here to check the list of your startup idea evaluation.

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Wish you luck for your startup.

Startup Planning – Plan Everything

Startup is one of the most tempting word in the contemporary market as its success includes all the desires that any person could have – name, fame, money, freedom, power- everything that you wish for. The success probability of any of the startups depends on the combination of all the parameters that are involved during the entire journey of the startup.

The basic requirement for any of the startup is to have a concept that has the potential to survive in the market and shall be appreciated by the consumers. Any concept that solves the problem faced by many of the targeted market base will definitely capture the attention of market base. Once you have decided the startup concept, the next step is to evaluate your idea on the sustainability basis.

Read here about the startup idea selection.

Read here about the evaluation of startup idea.

what-is-account-planning

Startup Planning – Knowledge Areas

Planning of startup is critical as the future success during execution is proportionally dependent on the accuracy of planning on all the knowledge areas involved in the startup. Scope, schedule, cost, quality, manpower, communication, purchasing, risk, integration are the basic knowledge areas that require attention of entrepreneurs prior to execution. Here is the description of each of the knowledge area that needs to be planned –

Work Breakdown Structure – Work Breakdown Structure aka WBS is the breakup of all the activities that need to be done to execute the startup. This structure helps in defining the responsibilities and the resource requirement. So prepare a list of all the activities that needs to be done for your startup.

Let’s take an example of e commerce business model. So the major activities that needs to be done are as follow –

  • Website Design
  • Product Management
  • Supply Chain Management
  • Marketing
  • Execution and Control

Now you can think of what resources are required to run e-commerce website based on the above major categories of work. The detailed level breakup of each major category will decide the actual scope of work for your startup.

Read here about the work structure of startup.

Cost – Cost is major constraint while executing any of the startup without external funding. So a proper estimation is required for cost associated with each of the activity. This estimation will result in the major focusing areas in terms of cost roadblock.

One way of estimating the cost is to find the cost of products/services required for the activity. As in the above example of e-commerce startup, the estimation of cost associated with each of the activity is as follow-

  • Website Design – 10k $
  • Product Management – 20k $
  • Supply Chain Management – 40k $
  • Marketing – 30k $
  • Execution and Control – 50k $

So the total funds that you need is around 150k $ (all figures are just assumption). Based on the above analysis you can decide the tricks to arrange the funds for your startup.

Another approach that is used to decide the cost is to assign the cost to each of the activity. This strategy is used when you have limited funds. So you can decide where the cost is going to be the major roadblock during execution.

Read here about the cost analysis of startup.

Timeline – Timeline of the activities is also one of the critical areas as it keeps the track on progress of the startup activities. The pre-defined time frame for each of the activities also becomes a source of motivation during initial phase of startup when self-motivation is the only factor to keep you alive for your idea.

You can have an estimate on the time span required for the startup activity or assign a time bound target against each of the activities.

The best way of planning is to align the activities is categorize them in sequential and parallel activities and align the timeframe of entre scope of work.

Read here about the time frame of startup.

Quality – Completion of any of the activities is always associated with the quality level defined with it. So it’s important to define the level of perfection that should be achieved for successful running of startup.

For example – the vendors with optimum cost and quality are the best fit for selection. Hence all the parameters should be defined for vendor selection process.

The benefit of defining quality baselines is that it would avoid many of the major issues generated by quality check during startup execution.

Manpower – Manpower involved in the startup activities are the pillars of upcoming success story of the startup. Doesn’t matter how well you have defined all the baselines for your startup, ultimately its manpower that are going to execute the same. Scope, Schedule, Cost, Quality, Communication, Risk, Procurement, and Integration – all the verticals will be handled only by the team members involved in the startup.

Manpower / Startup team selection could be done in two ways- alignment of available team into activities responsibilities and the selection of required manpower based on skill sets. Any of the two approaches could be used based on the existing scenario of startup team.

The precision of selection of team members will reduce the workload on few particular persons and hence the future issues.

Read here about the startup team selection.

Communication – Communication is the only bridge that aligns all the vertical of any of the startup activities. Scope, schedule, cost, quality, procurement, manpower, risk, integration – all are linked via effective communication to produce effective and reliable results.

The reciprocal of critical information flow among stakeholders must be decided prior to execution. Deciding the end points along with the timeframe for communication flow will clarify the responsibilities of startup activities among stakeholders.

Read here about the communication planning.

Purchasing – Purchasing of products or services required is a major activity to optimize the cost of startup. Depending on the available resources and manpower, its easy to decide the purchasing of products and services for your startup.

Outsourcing should be minimized in case of limited funds. Only the critical scope that can’t be managed internally should be outsources to save funds.

Risk Analysis – Every startup activity has some amount of risk associated with it. Identification of all the risk areas and anticipating the impact of each of the risks is helpful in deciding the mitigation plans.

The risk could be measured in terms of money or any other parameter that is suitable enough to define the impact.

Read here more about the risk analysis of startup.

Integration – As per basis understanding of calculus, Integration is the process of joining small slices to find/make the whole. Startup planning integration is the process of joining the information of all verticals into one thread.

Once the planning is done on each of the vertical, its quite easy to align all the baselines with the startup activity.

Read here about the integration of startup verticals.

Startup Planning – Outcome

The outcome of startup planning is that it would give proper direction to each team member during execution phase to avoid any of the issues. The mismatch in any of the defined base line will raise a red flag for attention itself.

More is the precision of planning; more are the chances of startup success.

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Startup Initiator – Stand against odds

The greatest advice that we would like to give to all the entrepreneurs is “Stay motivated and never give up”.

Most of the times it has been observed that entrepreneurs give up because things doesn’t go well in one shot. Always remember success never comes in one day. You need to keep trying trying and trying unless you reach to your goal.

People will always come with mixed feelings for you, some will motivate you and some shall try to down you. Its your idea, its your goal, so its only you who has to make it a big hit. Never be dependent on someone, people never want to see you grow. So, just think of your goal and keep fighting.

“My mission in life is not merely to survive, but to thrive; and to do so with some passion, some compassion, some humor, and some style.” – Maya Angelou

“Success is no accident. It is hard work, perseverance, learning, studying, sacrifice and most of all, love of what you are doing.” – Pele

“Do not give up, the beginning is always the hardest.”

“Do thy duty, reward is not thy concern.” – Bhagavat Gita

Wish you Luck for your startup.

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Startup Initiator – Get an Idea

To have a brilliant startup concept that has the potential to capture the targeted market base is the main requirement to unleash the entrepreneur in you. Most of the ideas are derived by the self-encountered problems or the most obvious problem faced by many of us. So the approach that should be used to get an amazing idea for your startup is quite simple – pick a problem faced by mass and do the reverse solution analysis on that.

For example – the problem of daily commute is the biggest problem faced by office personnel. The problem starts from the point when person leaves the house and remains alive till he reaches the office. The existing solutions are Auto Rickshaw, Metro, E-rickshaw. The better solutions are carpooling, daily bus commute, cab pooling etc. Based on the feasibility any of the available solutions could be implemented.

Startup Idea Selection – Requirements

  • The first requirement for startup idea selection is the list of common problem faced by mass. The relative analysis of all the problems will decide the market base for your idea. The large market base will decide the chances of appreciation by mass.
  • The second requirement is the list of existing solutions to the problem. The comparative study of these solutions will give a guideline for the scope of improvement in the existing solutions.

Get an Idea

Startup Idea Selection – Steps

Steps that are required to select the best idea for your startup are as follow:

  • Market Base – Decide the market base that you want to target. For eg: students, girls, office personnel etc. Deciding the market base prior to selection of idea gives a clear picture of future scope of work – strategies to reach the consumer, acceptability limits of the concept etc.
    If you want to focus on the problem first, that also nice, but again the major requirement is to decide the target market base, the consumers of your solution that is going to be appreciated by the specific market base.
  • Problems Statement – List down all the problems faced by the targeted customers. Listing all the problems will enable you to decide the potential of the concept in the market. More the criticality of the problem, more are the chances of success.
  • Existing Solutions – List down all the existing solutions for those problems. Listing of the existing solutions will help you in deciding the priority of the solution need.
  • New Solutions – List down all the new solutions that come to your mind. Based on the feasibility of the solutions decide on which you would like to work as your startup concept.
  • Final Concept – Based on the above documentation, decide the final solution that you want to execute.

Read here about the evaluation process of your startup idea.

Read here about the new vs. existing solutions analysis.

Startup Idea Selection – Outcome

The outcome of above exercise is the startup concept that will address the problem faced by many of the people and hence will capture the market soon. Once you have an idea for your startup, the very next step is to evaluate it and do the planning for its execution.

Wish you Luck for your startup.

Stay connected to know more about startups.

 

Startup Initiator – New Vs. Existing Analysis

Most of the startup concepts are derived by the reverse solution analysis of an existing problem. The reverse approach of finding startup concept is always appreciated as it decides the targeted market base prior to execution. So, one can easily decide the strategies to reach the consumers.

Read here about the startup idea selection.

Definitely there would be some solutions that are being used by the targeted market base, but are not as must effective as your startup concept. So it’s important to do the comparative study of the new concept against the existing solutions to determine the chances of success. The comparative analysis of positives and negatives of both the concept will also provide a direction to think for improvements.

Let’s take an example of “daily commute problem” to do the relative study of new vs existing solutions.

New vs Existing Analysis – Requirement

The basic requirement for new vs existing solution analysis is the new concept that you are planning to implement. The new concept should be completely clear in terms of its features and limitations.

Another requirement for the same is the details of the existing solutions, features and limitations. This will help in the comparative analysis of the both.

So, as per our example considered above, here are the details that are required for comparative analysis:-

Existing solutions – Metro, Bus, Cab, Auto, E-rickshaw

New Concept – Bike pooling

New vs Existing Analysis – Steps

  • The first step to do the comparative study of new vs existing solutions is to capture all the features of the existing solutions. These features give a direction for the features of your startup concept.
  • The next step is to capture all the limitations in the existing models. These limitations are the acceptability criteria for the new startup.
  • Now, capture all the positives/features of the new startup concept. Ideally is should capture all the features of existing platforms and provide the betterments in their limitations. So you can easily decide which features are being provided by the new startup concept and which remain untouched by the same. This comparative study gives the actual areas to work upon. Thought all the features might not be incorporated in early stage, but it helps in deciding the future strategies.
  • To capture the limitations of your startup business model is also crucial as another will try to address those and capture the market, so based on the limitations of existing model, you can decide the future scope of improvement for sustainability.

Here is the comparative analysis of our example –

new vs existing

New Vs Existing Analysis – Outcome

The outcome of above analysis is manifold, acceptability limits of the new startup concept, scope of improvement in the concept and the future strategies for business development.

Read here about the planning verticals of startup.

Wish you luck for your startup. Stay connected to know more.

Startup Initiator – Idea Evaluation Checklist

Startup is a phenomenon that keeps every entrepreneur mind occupied all the time. Whatever may be the source of motivation behind your entrepreneur nature, “startup” the word itself gives you inspiration to achieve something, plus the scope of learning to think from sustainable business point of view.

If you have an idea for your startup, it’s always important to get the success probability and acceptability limits prior to execution. Evaluation of startup idea gives you the right direction for improvement in the decided concept.

Read here about the selection of startup idea

Startup Idea Evaluation – Requirements

  • The first basic requirement for startup idea evaluation is the idea itself. A well-documented startup concept is always beneficial for entrepreneurs to get the clear picture of the final target. So first of all draw a skeleton of your startup concept.
  • Another requirement for startup idea evaluation is the list of all the players working in same domain. The list of other players of same domain aka Competitors gives entrepreneurs a clear picture of the validity and acceptability limits of the concept.

Startup Idea Evaluation – Steps

Here is the list of startup idea evaluation-

  • Existing Platforms Analysis – The first step is to collect all the information about the existing platforms that are working in the same domain. Find all those features of the existing platform that are being appreciated by the users. Also, figure out the scope of improvement in the same. This information will help you do compare your idea against each of the existing solution.
  • New Solution Analysis – List down all the features of your startup idea that you have decide to incorporate in the solution. Based on the above analysis of limitations of other platform, also figure out the limitation of your solution.
  • Comparative Analysis – Once you have done a separate analysis on both of the solutions, existing vs new one, the next step is to compare both the solutions. Ideally, your solution must capture all the features of the existing platforms as customer is already accustom to   those features. So, your solution must incorporate all those features. Check the limitations of existing solutions that are being addressed by your concept.
  • Future Risk – Since you are not prepared to launch your startup right now, so you need time to do the background work required for proper running of your startup. This time gap introduces a scope of development in the existing platform. So consider a factor for the revealed and unrevealed plans of the existing platform while doing the comparative study.
  • Feedback – Prepare a prototype of your startup concept and get the feedback of as many people as possible. This gives the clear picture of acceptability limits of the new concept.
  • Finalize the concept – Once all of the above activities have been done, decide the scope of changes in your idea based on the results of comparative study, future considerations and prototype feedback.

Startup Idea Evaluation – Outcome

The outcome of above process is that your concept is refined as per the actual need. Now based on the above evaluation you can decide if you want to go with the same concept or you think of something different.

During the evaluation process, the most important outcome is the understanding of the targeted market base need. So even if you doubt on the success of your startup concept, you can think from the consumer point of view.

Read here about the planning verticals of startup.

Wish you luck for your startup. Stay connected to know more.

Fuckedup is a phrase that captures all the emotions associated with the startup journey.

If no concept clicks in your mind, you feel frustrated. If you are not able to manage a proper team for your startup, you feel irritated. If funds, revenue, expansion etc don’t take place as per planning and expectation, you feel infuriated.

To keep you away from all these feeling, FS is continuously providing you to the best guidelines, practices and market trends. Please share your feedback at contact@fuckedupstartups.com