What you need to know before you open a Startup?
The prospect of building your own business from scratch is always scary. Getting a startup off the ground is even more terrifying when thinking about how risky they are in challenging the established business models.
High risk and high reward is the name of the game with startups. A higher rate of them fail when compared with other small businesses that don’t make it past their first year. But when they make it, they have the potential to shake the world.
We’ve broken down the quintessential stages of any startup: how to plan it, get it off the ground, and then pass the one-year bottleneck to turn your million-dollar idea into a million-dollar business.
Everything starts with an idea, but as they say: ideas are cheap everybody has one. What will differentiate your idea from everybody else’s? The answer will differ from business to business, but the one thing that will be common for successful Startups will be the level of detail of the initial draft.
Breaking through the idealized stage will be your first hurdle to pass. Most people stay at this stage for years or even all of their life without capitalizing on what might be an innovative business.
To avoid that, start planning out your idea. The easiest way to do this is to visualize how the finite product will look like. It can be something as small as just a few words written down, or a comprehensive presentation using a wireframe maker, you’ll just need to get started and take that first step.
After you’ve embarked on your journey, and forced yourself to quantify your idea you enter the actual planning stage where your Startup will take shape. Regardless of the scope or complexity of your plan, you’ll need to answer the below questions:
- Who is the client? – Define the future client base for your business and analyze the market. You can do an ICP – Ideal Client Profile, or just a general archetype, but you’ll need to know who your target audience is to be able to put together an effective marketing strategy.
- What is the product? – Going hand in hand with your target client base will be the product or service that you’ll be offering. The best way to develop your product is by thinking of a need that it will cover or cater to.
- What’s the market like? – Check your future competition and see what they have similar or different to your startup idea. See how saturated the market is and if there is room or demand for something else.
Answering these questions will be the key to making winning strategies. Depending on the answers you’ll come up with, you can see if there is a niche for your business to capitalize on. Or develop your product with a specific group in mind so that you can increase the chances that it will be a hit with that client base. Or maybe you’ll want to make room for future customization to appeal to other customer groups? The choice is yours!
Consider the evolution of your business as well and divide it into stages of development. Then apply a time-restrained element to it. Break down each stage even further, with specific tasks you’ll want to be completed so that by the end it will all come together into a cohesive ‘roadmap’ of tiny goals you’ll need to achieve.
Getting down and dirty.
By this point, you’ll have a very rough outline of just the general business idea. You’ll need to expand on it so that it turns from just a sketch to more of a business plan. For this, a lot of research is needed. Chances are that you have some kind of grasp of the field you’ll want your business to operate in. But even if you don’t, or if you have only a basic understanding of it, you will need to fill in the gaps in your knowledge.
If we think of the three categories we talked about previously, then for each one, you’ll need to get specialized information. You’ll need to switch from the customer perspective you might have had, to the business view of things.
Get to know your client. Searching for it online is an option here, but nothing beats getting the feel of your customers through direct contact by surveying customers over the phone or face-to-face in high-traffic areas. This might be intimidating, but as they say: no guts, no glory!
For products, you can look online at everything from individual customer star reviews to professional online articles breaking down your competitor’s product and business model. Knowledge is power and the more you’ll know, the better equipped you’ll be for the future.
As much as you might want to get creative in your Startup, you will still be constrained by local laws. To make sure you know how to navigate them, you should consider getting in touch with a lawyer that specializes in the challenges of starting a business and startups in particular. Keeping them as a contact can help in the future.
Everything is just a pipe dream if you don’t have the capital needed to turn it into reality. It is recommended to have financial reserves to use, but most likely you’ll want to attract investors. This means that you’ll need to consider questions such as how much control you’ll want to retain over your future company. Would you feel comfortable with selling parts of it?
This might help with initial as well as later funds, but it will add additional pressure to deliver as well as subtract from your own long-term profits. Balancing this will be another important aspect of your managing your business.
Regardless of your choice at this point, you’ll need to make a business plan. Apply a money constraint to your previous roadmap and check the type of legal structure your startup will have. If you followed our previous advice, the contact you made will come in handy here.
Once you have the blueprint of your business and secured the funding, you’ll be able to put it in motion and hire a team. You can start thinking of marketing if you haven’t already. Get creative and get ahead of your competition.
You can start by using postcards to promote your business, as it is more cost-effective and can be sent to potential customers quickly. Additionally, you can use other marketing tools, such as email campaigns and social media marketing, to share your message with a broader audience to spread the word about your business
For example, we’ve seen startups employ promoters in high-traffic areas such as malls. Armed with customer profiles they would stop passers-by who fit that target group and entice them to take surveys and give their personal information with the promise of getting free products or a chance at winning prizes.
This way they hit two birds with one stone: getting valuable customer feedback and building a client database that their sales team could use. Like any machine, however, it will break at times and need some repair or spare parts. Be ready for this, just like any business constant evolution is what will make it grow but by following these tips we’re sure you’ll do great!