Subtittle: Strategies to Start Your Start up
Everyone has ideas. Some of these ideas may be decent, while others are probably not so good. Even if your idea is great, there’s a big difference between having a great idea and creating a successful startup company.
Do you have what it takes to be an entrepreneur?
It will take hard work, dedication, money, some sleepless nights, and even some failure before you succeed. 71% of businesses fail within 10 years.
Once you get your company off the ground, you need to work just as hard to keep it going each year.
You can use this guide as your blueprint for launching your startup company.
1. Make a business plan
Having an idea is one thing, but having a legitimate business plan is another story.
In simple terms, a business plan is the written description of your company’s future.
You outline what you want to do and how you’re planning to do it.
Typically, these plans outline the first 3 to 5 years of your business strategy.
The business plan needs to be the first thing on your list because you’ll use it to help you with some of the remaining steps.
2. Secure appropriate funding
You’ll need adequate capital to get yourself off the ground. There’s no magic number that applies to all businesses.
The startup costs will obviously vary from industry to industry, so your company may require more or less funding depending on the situation.
For a small, part-time startup with no equipment, employee salaries, or overhead to worry about, it may only cost you less than $10,000.
Based on the graphic above, the vast majority of this money comes out of the entrepreneurs’ pockets.
The cost of doing business is much higher than people initially think.
Let’s circle back to our business plan for a minute.
All business plans contain a financial plan. This plan usually includes:
Profit and loss statement
82% of businesses fail due to cash-flow problems.
You’ll use these financial statements to determine how much funding you need to raise in order to get started.
You may discover that the number is significantly higher than you originally anticipated.
3. Find investors.
Investors can be:
Proceed carefully because you don’t want to start giving away significant equity in your company before you even get started.
The type of business you’re starting also influences the likelihood that angel investors and venture capitalists will be willing to give you funding.
If you find a potential investor, you need to know how to pitch your idea quickly and effectively.
You need to have your financial numbers memorized forwards and backward.
Refer to your business plan.
Make sure it’s presentable so you can give them a copy, but you also need to know how to successfully verbalize your startup strategy.
It’s imperative that your business plan has a proper executive summary.
Investors are busy and may not take the time to read through your entire plan if the executive summary doesn’t give them a reason to move forward.
Once you secure the appropriate funding, you can proceed to the next step of launching your startup company.
4. Surround yourself with the right people
You’re going to need some help while launching your startup company.
So where do you start?
Certain people often get overlooked when entrepreneurs are getting their business started.
Sure, you may realize that you’ll need some staff and a manager to help run your company. Is that it?
How many people do you need?
It depends on the industry.
Let’s take a look at an example from a study about the amount of employees for startup companies in the technology industry.
Based on this information, the vast majority of startup companies are small teams.
These numbers would be significantly different if you were starting a business in the restaurant industry.
You would need servers, a kitchen staff, bartenders, and managers.
5. Before you do anything, you need to register your business name.
Once your business gets registered, you’ll need to get a federal tax ID number, as well, from the IRS.
The IRS lets you submit your business information online to get your employer identification number (EIN).
You also need to consult with a:
Unless you’re an expert in law, finances, and accounting, these three people can help save your business some money in the long run.
They can explain the legal requirements and tax obligations based on how you structure your business.
Limited liability company
While your lawyer, accountant, and financial advisors are not necessarily employees on your payroll, they are still important people to surround yourself with.
Don’t forget about insurance.
Shop around and find an insurance agent who can get you plenty of coverage at an affordable rate.
Now you can start hiring people within your organization.
6. Find a location and build a website
Your startup company needs a physical address and a web address.
Whether it’s offices, retail space, or a manufacturing location, you need to buy or lease a property to operate your business.
As you can see from the graph, leasing property for your business is significantly more expensive than buying.
With that said, it may not be realistic for all entrepreneurs to tie up the majority of their capital in real estate. You should strategize for this in your business plan.
Try to secure enough funding so that you can afford to buy property. It’s worth the investment and will save you money in the long run.
You also need to create a website. Don’t wait until the day your business officially launches to get your website off the ground. It’s never too early to start promoting your business.
If customers are searching online for a service in your industry, you want them to know that you exist, even if you’re not quite open for business yet.
You can even start generating some income through your website.
Once your website is up and running, you need to expand your digital presence.
Utilize social media platforms like:
Your prospective customers are using these platforms, so you need to be on them, as well.
7. Become a marketing expert
If you’re not a marketing expert, you need to become one.
You might have the best product or service in the world, but if nobody knows about it, then your startup can’t succeed.
Learn how to use digital marketing techniques like:
Search engine optimization (SEO)
Social media marketing (SMM)
Search engine marketing (SEM)
Pay-per-click advertising (PPC)
If you’re starting a small business in a local community, you can take advantage of some older and conventional methods such as:
While these methods can be productive, outbound marketing efforts are not as effective as they used to be.
As long as you’re doing these things, you’ll be able to fight through any obstacle your startup company faces in the future.