Startup Basics: What do you need to know
Everybody is talking about startups. So what are they?
A startup is a young company that is beginning to develop. Startups are mostly small and initially financed and operated by the founders or the startup’s innovators, external investors.
Basic Facts on startups
The startup is a world of unknown.
Startups expenses are usually more than revenues as it involves developing, testing and marketing the ideas. Therefore don’t expect to be rich as soon as you begin.
Any startup will have days of doubt and want to quit but with focus and positive attitude, it’s manageable to keep at it.
Startups always spend more and have to seek funding from banks, grants from non-profit organizations and state governments.
A startup does not have a customer base, there are possible days with zero sales.
A startup must be ready to know more than it can offer through research especially on management and efficiency.
A guide on how to bring the startup off the ground will involve several steps as below:
Steps to take to begin a startup
· Evaluate yourself
There should be reasons to begin a startup based on whether it’s about extra income or about getting freedom from employment. Then for the reasons consider what is your motivation, and requirements that are the skills, passion, capital, and area of expertise.
· Think of Business ideas
Focus on what the start-up will entail and visualize how the business idea can get you ahead of the curve over other competitors. Do research and seek advice if the idea is appropriate how to make it a reality.
· Do market research
This will give you a clear vision for your startup knowing what to expect while setting up the
· Getting Feedback
Let people interact with your product and service and with this, you will obtain both positive and negative feedback, and act upon it for the improvement of the startup.
· Obtain legalization
To avoid the worry about someone taking your ideas or messing your partnership or suing you for missing out on following laws. It’s important to have your legal documents in place e.g. licenses, business structure, permits, patents, copyrights, etc.
· Make a business plan
It has benefits in the long run especially in securing funding and major contracts. Since it clears on how the startup will evolve.
· Funding the startup
You can seek funds from the banks or even trade equity or shares of the startup. This would apply if you don’t have enough capital.
· Develop your product or service
It takes a village to create a product. When crafting a product or even service there is a need for simplicity and quality, hence there is constant need to keep learning to improve the process and production for quality purpose and saving costs.
· Build a team
This step will entail bringing on board a team of skilled manpower to assist in running the startup whether employees or partners.
· Setup the location
The team brought in will need the venue where the operations of the startup will be done from, in consideration of accessibility to the target customers.
· Make Sales
Consider having sales strategies in mind. The main reason for the startup is to have revenues and grow your customer base. Over time the sales will help you penetrate to new markets making the startup expand to a big company.
Advantages of beginning a startup
Startups are highly recommended especially to individuals who want to exploit a new market niche.
Startups are very innovative and continuously improve their business models, processes and portfolios, making easy to adapt to technologies and market changes.
Startups deliver products and services with a personal touch, making it easy to understand customer needs, hence building lasting relationships.
Startups also are good since they form a close-knit community of employees that share passion and values that work together for the success of the company and the customers.
Disadvantages of beginning a startup
On the downside, startups have their share of challenges just like any business.
In this case, startups face the risk of failure within the first year of operations.
The market penetration is hard since most customers prefer established business over a startup.
These are just a few of the challenges of beginning a startup which can discourage innovators.
It’s imperative to note that startups are good despite the challenges. All the big companies we see today began as a startup and finally ended up being successful.