A startup is a company or project initiated by an entrepreneur to validate a scalable business model. These companies are capitalized on developing products or services for which they believe are in demand.
Even if you have a great idea of a startup, it does not assure you that it will be a great business plan. Not every idea will lead to a successful startup company.
Startups can fail due to weak management team. If your strategy is weak, you will end up making products that no one wants to buy. It’s important to validate your ideas before and during the development of the products.
It is stated that 30% of new businesses fail in the first year, 50% in the first five years, and 66% in ten years of being open.
What do you need for a successful startup?
It takes time, dedication, a strong management team, some failures before you succeed, and an understanding of good and bad ideas.
It’s a constant effort to keep your company going. You cannot do hard work at starting and expect it to give you profit afterward without any efforts.
Steps to take to get your startup off the ground:
- Making a business plan
Make sure that your company has a clear objective. Research and identify the market that you’ll target. Research about the competition in that field of market. It’s very important to have a marketing plan.
People with a business plan are less likely to fail than people without a business plan.
People who started companies with a complete business plan:
36% of them obtained a loan.
36% of them received investment capital.
64% of them grew their business.
People who started companies without a business plan:
18% of them obtained a loan.
18% of them received investment capital.
43% of them grew a business.
You will surely need money for your startup, budget accordingly.
- Secure appropriate funding
The cost of the startup varies from company to company, depending upon the project that you’re working on.
Most home-based startups cost $2000 to $500, while most small businesses that have no employees cost around $3000.
Some startups may cost millions.
Where does the funding come from?
The cost of starting and developing a business is more than people think. The majority of the funding comes from the entrepreneur’s pockets.
To determine how much funding you’ll need for the startup, you need to make a financial plan which includes:
- Balance sheet.
- Sales forecast.
- Profit and loss statement.
- Cash-flow statement.
Due to lesser knowledge of changes in balance sheet accounts and cash-flow problems, 82% of business fails.
To even start a small application shop, it will cost around $50,000 to $100,000 just to make it.
What if you don’t have enough money for your startup idea?
You’ve still got this. 22% of business loans go to small business companies while the majority of them are for large scale companies.
If you can’t get enough money from the banks as they are less likely to give large amounts to new business companies, find investors. Investors can be your friends, family, angel investors, or venture capitalists.
- Surrounding yourself with the right people
The number of people you will need for the management will depend on the industry.
You will surely need some staff and a manager to help you run the company. The majority of Companies require small teams.
But it’s different if you’re starting a business in the restaurant industry. Then, you will need kitchen staff, servants, bartenders, watchman, and a manager.
You will need to register your business name, and after you get registered, you will need to get a federal tax ID number from the IRS.
You will need to submit your business information online to the IRS to get your Employer Identification Number (EIN).
If you’re not an expert in the law, finances, and accounting, you will need lawyer, accountant and financial advisor to explain the legal requirements and tax obligations based on the structure of your business.
You will also need an insurance agent to get you good coverage at an affordable rate.
- Finding a location and building a website
You will need a physical as well as a web address for your startup company.
You will need to buy or lease a property for your business. Leasing a property is comparatively more expensive than buying a property. Buying a property will save money for you in the long run.
You will also need to build a website for your business.
You can start promoting your business even before being open. And earn some income by taking some pre-orders and scheduling appointments.
Having a website for your business will target a larger market and will cut costs.
You can utilize social media platforms like Facebook, Instagram, Twitter, Snapchat to showcase your work.
- Become a marketing expert
You will need to become a marketing expert to let others know about your product and services.
You can learn using digital marketing techniques like:
Social media marketing.
Search Engine Optimization(SEO), is the most important thing in digital marketing.
Local search marketing.
Pay per click advertising.
You can use other methods such as print advertising, radio advertisements, television, billboards, etc.
If you cannot do it alone, you can appoint a marketing expert or even a marketing team if needed.
- Building a customer base
After making a business plan, finding a location, building a website, and becoming a marketing expert now it’s time to open the doors for the business.
You have to get the customer to make a purchase and what’s more important is to keep your customers coming back to purchase.
Customer service is the key to keep your customers coming back.
You need to treat your customers as a priority to keep them coming back. As it is them, who are going to make your company a successful startup.
- Be ready to face anything
It’s not an easy task to launch your startup and to make it a success. Be prepared for the unexpected.
Prepare yourself to face the hurdles that will come in your way.
Don’t get discouraged if something goes wrong, try to find a solution to push yourself through it.
Even if your business is a success, it won’t always be smooth sailing for the entire lifecycle.
Your company will face its highs and lows. You will have to make some decisions but what’s important is to keep struggling through all and to keep working hard.