8 Tips on How to Start a Startup
How to start a startup? If you are having a hard time thinking about how to start a startup, don’t worry, you are not alone. Many people try creating their businesses only to fail before reaching their second year. So, how can you avoid experiencing the same fate? Read on to get some tips on how to start your startup.
Most people think that establishing a business is as easy as having a product and selling them. However, there are many things to do when starting a business. As most entrepreneurs know, starting a startup does not only mean having a product to offer.
As of the latest data, around 91.9% of startups fail to survive in their first year in the United States. There are many reasons for their failure—from lack of funding and product failure to bad business planning. The amount of work needed to launch a startup may be daunting. However, without that effort, you will be having a hard time establishing your business.
Before we discuss how to start a startup, understanding what a startup is first.
What is a Startup?
Startups are business ventures that are in their early stages. This means startups are typically still developing their business model. Furthermore, startups usually lack funding to proceed to the next stages. That is why, at this stage, startups focus more on bringing a minimum viable product or service to the market.
Hence, founders focus on developing their products or services when they think about how to start a startup. They invest their capital or seed money for market research and developing their business plans. Once their startups begin to get off the ground, founders proceed to the next step, which is to find funding. The video below discusses more on how to fund a startup:
Hence, we can conclude launching a startup needs a lot of effort. In addition, when you think about how to start a startup, you will need to strategize properly.
Tips on How to Start Your Startup
The process can be very overwhelming when you think about how to start a startup. Most people would find it difficult to start their own business. However, if you know the proper steps, then launching your venture can be worthwhile and fruitful.
1. Is Entrepreneurship for You?
First things, first: do you really want to become an entrepreneur? Entrepreneurship is hard. So, assess yourself if you have the capabilities and the patience to launch a startup. Conduct a SWOT analysis on yourself. By knowing these things about yourself, you can identify your strengths in managing a business or if you need help in certain areas.
Make sure that when you think about starting a startup, you can commit to it. Additionally, you have to ensure that your business aligns with your expertise.
2. Polish Your Idea
Now that you are sure you want to start your own business, it’s time to develop your idea. Through your self-assessment, you may have come up with some business ideas. But coming up with ideas is not enough. You have to make sure that your ideas are business-worthy. Hence, you need to filter these ideas and choose which is sustainable.
This is the stage that you identify your business. You have to validate that there is a need for your product or service. One way to do this is to start with a lean business plan. As its name suggests, a lean business plan is a more straightforward and shorter business plan. What makes it great is that it is easy to adjust, which is perfect when planning how to start a startup.
3. Do a Market Research
With your lean business plan, it is now time to validate your business idea. You have to ask yourself if there is a market for your product or service. Who will be your competitors? Who is your target audience? You can do these by:
- Do Google or Internet searches for similar businesses.
- Interview or speak with entrepreneurs in the same industry.
- Research for relevant news to your business idea.
- Read business books that are relevant to your venture.
- Take business or other relevant classes to enhance your understanding.
- Learn how to identify target audiences.
- Research your competition on how they do their business.
As the founder of Palo Alto Software said, “The more you know about your industry, the more advantage and protection you will have.” And market research will provide you with the data on how to run your business.
4. Write Your Business Plan
A business plan is a necessity when you start a startup. All kinds of ventures make use of a business plan because it is your company’s roadmap.
In your business plan, you will write all the details, including:
- Product and service specifications
- Target Market
- Marketing and Sales Plan
- Company overview and management team
- Financial Plans
Remember that the only way you can measure your startup’s growth is through your business plan. Plus, a well-written business plan is essential when you look for funding and pitch to investors.
5. Legalize Your Startup
Technically, registering your business is the first step in making your business idea a reality. You have to choose which type of business you will register your startup as. This step may sound simple, but there are associated requirements per business type. Make sure that you work with a lawyer to avoid any legal mistakes.
6. Finding Fundings Your Business
How to start a startup when you don’t have capital? The most common answer is to seek financing from angel investors or venture capitals. However, these are not the only way for a startup to gain much-needed funding. You can start through:
- Business loans from banks
- Small Business Administration (SBA) Loans
- Investments from friends and family
- Credit Cards
Make sure that you study the advantages and disadvantages of each financing source.
7. Business Location
Now that you have your business plan and financing, you have to decide where to do your business. Will you put a physical office or do everything online? The answer should depend on what type of product or service you are offering. Still, you have to consider the following when you choose your business location:
- Can you afford the price for rent or lease?
- Is it accessible to your target audience?
- Are the state or local regulations and rules advantageous for your business?
- Where are your competitors located?
8. Be Prepared
You can never over-prepare when starting a startup. And, one way to be ready for all the challenges is to hire the right people. Having people with the right skill sets will help you deal with challenges and achieve your business goals.
Lastly, you must be patient. No matter how well-planned your startup is, you will make unwanted mistakes. Every business will run into some troubles. Whether it is financial, operational, or others, what is important is to learn from these mistakes. Hence, it is important to do regular reviews to go over your business plan and strategies. Knowing your strengths and weaknesses is essential in running a startup.
Be a Smart Entrepreneur
Entrepreneurship is not easy. First, you need to know how to start a startup. This means that you have to think out-of-the-box and be very detail-oriented. Furthermore, it would help if you never forget that your startup struggles are not unique. You can learn from the success of others and through mentorships.
Full Scale is an expert in assisting startups in achieving business growth. Our professional and adept software engineers, developers, QAs, testers, project managers, and marketers are always ready to help you attain your business goals. Plus, our founders, Matt DeCoursey and Matt Watson are willing mentors to all types of entrepreneurs.
Are you still confused about how to start a startup? Contact us now and let’s start growing your business venture!