Guardian Mag

How to Start a Company, According to Female Founders Who Did Just That

 Last year, women launched 1,821 new businesses every day—yet, starting your own company can feel overwhelming. Here, everything you need to know to turn your entrepreneurial hopes into reality.

In startup land, there’s a lot of talk about a business plan—the blueprint for how you’ll build and scale your idea. Structurally, the document is simple. (Really. Google it and you’ll find countless templates to help you organize your mission statement, market analysis, financial projections, and the like.) What happens before putting pen to paper? That’s where the real work begins. Jennifer Hyman, cofounder and CEO of Rent the Runway, outlines the three things to do before defining your company’s future path. 

Ask Yourself One Question

“Will I have fun every single day building this company?” It takes years of growing to hit your stride. If you don’t love your business and its mission, you’ll run into trouble. 

Talk to Your Audience

We interviewed thousands of potential customers and dozens of designers to learn what value we could provide to both groups. These interviews became the foundation of our initial business plan. I still lean on those early learnings to evolve the company.

 Think you don’t have the money to start a company? Think again. Sure, some entrepreneurs bootstrap*—but most launch with the help of other people’s money. Some routes require a way to recoup your partners’ investments. Others involve debt and interest rates. But all are an if/and—not an if/or. Below, the pros of each. 
PRO TIP:
“Separate your business and personal finances. If you’re running your business out of your personal checking account, it’s harder to get a loan and increases your cost of personal borrowing.” —Kathryn Petralia 
 
 You have a solid business plan. That doesn’t matter if you can’t communicate it.
“The goal of the first meeting is not to get a check but to get asked back to the next. Building relationships with investors happens over weeks or months, not minutes.” —S.D.
 
 Your first idea isn’t always your best. Survival in startup land involves a whole lot of flexibility, and every iteration is unique to your company’s specific set of challenges. Three founders share how—and, most important, why—they altered course. 

Hire People Who Complement Your Strengths and Weaknesses

If you’re better at external meetings and marketing, hire an operator to be internally focused. It’s natural (and smart) to bring in people you’ve worked with before and trust, but you also need to go beyond your inner circle; diverse teams perform better.

Look for Talent Magnets

If your budget is tight, hire people who attract other talented team members from their networks or previous jobs. They should believe in the future growth potential of your company and negotiate for more equity versus cash compensation. 
 

After years—and years and years—of strategizing and pivoting and scaling, many founders start to think about what’s next. Some entrepreneurs want to work 80-hour weeks for the rest of their lives (cough, Elon Musk, cough), while others realize that’s not sustainable. Whatever your goal, you have options.
An IPO (or an initial public offering) is when a private company lists itself on a stock exchange—think NASDAQ or NYSE—and allows bankers, funds, and regular consumers to buy and trade pieces of the company, making them official shareholders. Founders who pursue IPOs with tactical skill stay plenty in control and allow their investors to sell their ownership stakes. It’s also a way to get way more funds to support growth goals—especially those expanding internationally—and raise a higher profile. Being listed on any stock exchange usually adds a level of credibility you don’t always get as a private company. One of the reasons Julia Hartz, CEO of Eventbrite, took her company public in 2018 was to raise money to expand the company’s global footprint, and “the discipline and transparency that being public demands keeps us focused on executing on the tremendous opportunity ahead of us, regardless of market cycles.”

 

As a first-time founder, you’re going to make a ton of mistakes on the road to figuring it all out. Jean Brownhill, whose contractor marketplace, Sweeten, launched in 2011 and has since raised over $9 million, looks back at her early days in entrepreneurship and shares what she wishes she realized earlier. 

A handy tool to help you remember all the boring to-dos while you’re busy building the next big thing.

1: Nail the Basics

What is your company’s mission—and its name? (For a fee, you can hire a firm to help.) Decide if you want a cofounder, though know solo founders are twice as likely to succeed as cofounders.

2: Fill Out All the Forms

You will get very tired of your own signature. Sign up for an Employee Identification Number, register as an LLC, map out licenses you may need, and download accounting software.

3: Brand Your Baby

You have the name; now you need the look. Whether you outsource creative or hire a UX designer, focus on crystallizing your vision. This will be your company’s introduction to the world.

4: Get to Know Your Market

What is your target audience? Who are your competitors? Once you nail down your user base, tweak your product, launch in beta (find users organically or through a firm), test, and tweak again.

5: Write Your Business Plan

It’s fine to keep things fluid early on but you’re 16 percent more likely to reach cash flow positive with a solid strategy than if you don’t have a formal outline.

6: Figure Out Your Finances

Explore the type of funding that fits your company’s goals. Do you have a high growth potential model and hope to eventually sell or go public? Then a VC route makes sense.

7: Launch!

You got this. Seriously. A recent study confirmed that women are better entrepreneurs than men. Startups with a female founder or cofounder made 10 percent more in revenue than companies with a male founder.