The entire world talks about business but very small number of people know the word startup. Here we make you familiar with the word startup and what do you require to start your own startup.
A startup is any newly formed business enterprise that is established with the aim of serving an unfilled need of the chosen market. A startup is a small business venture which is in a phase of development and has newly launched products/services in the market. A startup business is created by a person, commonly known as an entrepreneur, to meet the needs of potential customers.What you need to keep in your mind is that a business in the early development stage of its life is called a startup.
When we think of a startup, a picture of a newborn plant or a seedling conjures up in our minds. The way we help a seedling nourish while giving it manures, fertilizers, and water, similarly a startup needs finance, people and other resources to attain growth. If entrepreneurs fail to provide what is required by startups, it is inevitable that they will witness the death of their new businesses.
A startup is a risky undertaking because no one really knows whether it will succeed or fail in the future. That is why we find startups being funded by their founders because no investor wants to risk his or her money. However, generally, a startup does receive a bank loan. Startups generally absorb more costs over producing profits. Reasonable profits are produced when startups reach to the stage of growth.
Every startup, no matter which market problem it aims to solve, follows a business model, a set of plans that make it able to run and make a profit from its target customers. A for-profit startup makes the lives of its intended customers easier in one hand while as generates profits on the other hand.
Most startups ( 90% ) fail for one or the other reason. Some fail as a result of immature planning while as some fail for not being able to raise funds. The remaining 10% of startups turn later into successful companies.
How to start a Startup
There must be a reason why are showing so much interest in starting your startup. Of many reasons we could guess might be your your ambition and passion. Whatever your reason, here are 8 things you require to start a startup business. By starting a business, you aren’t just making yourself wealthy but also giving others around you hope of getting employed. In simplest of words, you are building a legacy while contributing to your community.
1. Find a business idea
Every business venture develops from an idea, a thought or bunch of thoughts with potential to solve a particular market problem. Your idea should be a good one. A good idea is one that can be actually done and shall make a difference on ground. Of many best ways to help you generate good business ideas is that you should listen, keenly observe and learn as much as possible the situtations that matter to you and to the people in those situations.
2. Evaluate your business idea
Once you have made your decision on a particular business idea, it’s time that you send it for screening. Evaluation would give you an early indication of the possibility of its future success. Screening of your business idea involves conducting a feasibility study, analyzing it for strengths, weaknesses, opportunities & threats and taking marketing environment and resources required into consideration.
3. Capture your business idea
Next step you’ll be following after idea evaluation is capturing your business opportunity. By caputuring you chosen business idea means you should get access to answers of the following set of questions.
- What are your potential customers buying?
- Who is going to buy your product or service?
- How many potential customers?
- Who are your competitors?
- In the next 3, 6, 12 months, what are the milestones to accomplish?
- What will your business look like after 1, 2 years?
- What is the cost to make your product or delivery service?
- How much will you charge to earn a reasonable profit?
4. Write a business plan
A business plan is an essential tool that will enable you to fully think through your mission, objectives, goals, strategy, expenses, hence creating a well thought out long term vision for your business. You should tap into the advice of existing entrepreneurs, consultants, mentors, lawyers, etc. However, you must create a business plan personally.
A business plan provides you a blueprint and manual on translating your idea into a profitable product or service. It also serves as a powerful diagnostic tool in case things go wrong and can be presented to potential investors and banks for funding.
5. Develop a team
Find and develop a team with the right skills and competencies to implement your business idea. When you are done with the hiring of required and right employees, do as following:
- Clarify your business vision and proposed product or service to them.
- Discuss roles, responsibilities, and benefits with each team member.
- Build and ensure trust amongst team members
- Write and offer team contracts that should include employment period, salary, working hours, leave, etc.
6. Register your business
While you act on the step of business registration, make sure you will:
- Choose a good and catchy name for your business
- Pick a form of organizational structure such as sole proprietorship, partnership, private limited company, co-operative, etc.
- Create your business identity such as logo, business card, letterhead, baseline, stationery, etc
- Consider legal aspects like as accounting records, tax, advisers, copyrights, trademarks, patents, website design, and other online contracts.
7. Find a location
Picking a good location for your startup business matters a lot. The place where you will locate and make your business operational is called a business location. While choosing a location, you must make sure that it is:
- Suitable for your type of business
- Accessible to potential customers
- Meets your layout requirements
- Well connected to the transport network
- Availability of basic amenities
- Parking space
- Meets government regulations
- Support future growth
8. Access to finance
Estimate the total amount of capital ( fixed and working capital ) required and then proceed further to identify the source of funding. Decide on what source of funding you will use whether bootstrapping ( personal funds ), angel investor, bank credit such as loan, overdraft, etc.
What if you want to run your own business without going through the startup stage?
If you want to run your own business and bypass the startup stage, then we recommend you acquire a business for sale. This can be done in many ways, but nowadays, the most popular way to get in touch with business owners selling their companies is to use an online directory of businesses for sale. If you want to learn more about starting or buying a business, we recommend you read our previous articles on this blog.