Building a startup from a single idea can be lonely work. You’ll encounter many reasons to give up instead of continuing your venture into the unknown, but the rewards associated with successfully guiding a business through the mire and into prominence can make the whole process feel worthwhile.
But what are the steps you need to take to ensure that your brand new business has the best chance of becoming a success as possible? Let’s take a deeper look at the seven key stages in the early life of a startup, and how you can navigate them effectively:
Build a plan
All good startups hinge on a strong business plan. Not only would you be better placed to grow strategically as business picks up, but you’ll be in a significantly better position to access funding from venture capital firms and angel investors if they can clearly see that you’ve done your homework and are aware of where your venture is set to be in the near future.
There are plenty of helpful guides on how to create an effective business plan available online, and the overriding message in the majority of them is that you’ll need to conduct a heavy level of research to back up all of your forecasts regarding cash flow and growth.
It’s imperative that your plan demonstrates a strong understanding of your target market, and is in no way exaggerated or ignorant of the risks involved in your industry. Investors will see through it and you’ll be severely underprepared when your targets aren’t met.
When crafting a business plan, it’s important to do so with the next three-to-five years in mind. Don’t be afraid to get forensic, and keep focussed on informing readers as to why your startup will prove successful with its established audiences.
Secure your intellectual property
The term ‘intellectual property’ is given to the process where an individual or company gains legal ownership of their product or service. Intellectual property can involve patents, trademarks and created works. Failure to secure your idea can leave the door open for competitors to steal your product and repurpose it for themselves.
Furthermore, by securing your intellectual property, you can ensure that you’re not accused of stealing ideas from other companies. This is a trap that some startup founders can fall into and many lack the financial resources to clear their name.
Securing intellectual property varies based on the nation that your business is based in, but Forbes has produced a comprehensive guide, just in case you’re looking for more information on acting to secure your idea or product.
(Here we can see that funding for startups can come from an array of sources. Image: Fundable)
As we can see above, there are plenty of ways in which startups can access the funding they need to scale appropriately.
The most common way of setting up a business is through the form of bootstrapping. This is a great way of ensuring that you retain the equity of your business, meaning that you’ll have full control of making decisions and would receive the full windfall should you ever decide to sell up. However, if you’re struggling to find the money to cover your operating costs, bootstrapping can be highly stressful and dangerous for your personal wealth.
Another significant form of gaining funding is through investments from a venture capital firm. This approach is a great way of securing significant windfalls that can help your startup to scale in line with your business plan but typically comes at the cost of relinquishing some equity in your company – namely anything from around a 5% to 50% share in ownership.
Learning how best to fund your business is a significant step on the path to success and shouldn’t be taken lightly. Be sure to take the time for significant levels of introspection and self-actualisation.
One of the perks of gaining venture capital investment can be found in the level of guidance your startup can receive in return for equity. When going it alone, a little bit of experienced advice can really pay dividends when it comes to decision making.
It’s also possible for startup owners to gain mentorships from external parties. This can be a difficult decision to make, especially for founders that are driven and focussed on achieving their visions. However, gaining an authoritative voice to offer their perspectives can really help in the scaling of your company.
Gaining a rich level of insight could be ideal when it comes to navigating some of the challenges you’ll no doubt face in the early stages of life as an entrepreneur.
Settle on an online and offline location
It’s vital that your business is discoverable both online and offline. The costs of all the physical locations your business needs – whether that’s offices, shop fronts or warehouses – must be considered in your business plan, and when it comes to actually leasing or buying your locations, they must be compatible with your anticipated expenses.
Deciding on a location isn’t easy, and different areas will carry different costs. If you’re looking at leasing office space in a metropolitan area, this could help to attract a larger pool of skilled workers, but will also incur higher costs. The same applies to bricks and mortar stores and the number of customers they draw in.
If you gain funding from a venture capital firm, it could be worth buying property in order to keep operating costs down over a longer period of time.
Your online location will also require plenty of thought. Invest time in finding the right domain to suit your branding. If a dot com URL has been taken and is unable to be bought, this could hinder your visibility online. Take a look at your business name and see how it can be converted into a shorter address, too.
Organic search counts for a lot when it comes to attracting customers to your website, but utilising a name that suits your business and isn’t a forgettable number of characters really helps too.
Market, market, market
On the topic of online marketing, it’s never been more important to market your business effectively. The growth of the internet means that it’s possible for a startup based in Yokohama to successfully draw customers away from your business despite being located half a world away.
With this in mind, you need to identify your target market effectively. Get into the minds of your prospective customers and try to gain insights into their interests and demographics. If your product would have a larger userbase among over 50-year-olds, it may be best to refrain from using heavy amounts of slang when marketing your product.
Platforms like Google Analytics can be great in helping you to better understand your sales funnel and where your best backlinks are coming from. When you’ve learned what helps to make your website tick, create effective content that’s designed to capitalise on these markets.
Organic search is the backbone of many successful marketing campaigns, and it’s vital that you work on building interest in your products or services while building some prominence on the results pages of Google. Target keywords that are relevant to your industry and make sure that your website has a dedicated blog section that’s as discoverable as possible to your targets.
The final step on the road to building a successful startup is to keep yourself braced for just about anything to happen.
The world financial markets are still jittery following the devastating crash of 2008, and recent politics has offered little solace for investors. The best entrepreneurs are typically defined by their adaptability and level-headedness in times for disaster.
Be sure to remember that downturns and setbacks can occur with little warning, and that you should have some form of financial cushion in place if, say, some of your stock is lost in a fire, or a member of staff requires a long break from work.
In the wild world of the entrepreneur, just about anything can happen. So be sure to enjoy all the success you achieve with your startup, but always remember to keep one eye on setting up shelter for a potential rainy day.