To get into the success mindset when establishing a startup – or any business for that matter – there are a few key steps that can be taken to start on the right path. Before beginning the process, it is important to fully understand the definition of a startup. “Startup” is a word often tossed around to describe a variety of businesses, however, it can be best defined as a company that aims to utilize innovation as a problem solver, without the guarantee of success or stability. To put it simply, startups are a huge risk that can lead to massive benefits if established efficiently.
When establishing a startup business, risk factors may be high and unavoidable; however, there are essential steps to follow when starting out to lessen the inevitable risks.
Start with a business plan
The business plan will serve as the core of any startup company. As an essential component of the business, a business plan should include aspects like the value proposition, target market, industry analysis, company structure, and financial plans and projections. Before anything else, establishing a business plan should be the number one priority in order to keep the startup organized while moving forward.
Defining the value proposition and determining a target market go hand in hand; a value proposition should aim to service a specific audience or consumer base as opposed to the general public. Not only will this help in building a startup’s brand, but will also provide insight on how to stand out from the competition by providing innovative and fresh solutions to a specific market. Conducting an analysis of the industry’s consumer base will also provide intel as to what the target customers want and need, so all products or services can offer premium value.
Find the funds to get started
Now that the business plan has been strategized, there is a better understanding of what the projected financial needs look like. Finding an investor may prove difficult, but looking within a specific industry and having a set financial starting point will narrow the search. Resources like AngelList or Crunchbase make the process of matching with the right investor easier and can, at the very least, lead to a meeting or the opportunity to present a business idea. Utilizing a network of professionals within the industry can also lead to connections with potential investors.
Before even thinking about setting up a meeting with a potential investor, having a thorough understanding of the startup’s mission and value is essential. If an entrepreneur cannot fully conceptualize what to expect for a startup, how can an investor anticipate its success?
Know what needs to be done (legally)
There’s more to starting a business than writing a business plan and securing financial resources. In the United States, there are numerous business structures that a company must select that will directly influence day-to-day business operation, tax information, licenses and permits, and the ability to raise money from investors or venture capitalists. With plenty of resources from government organizations like the U.S. Small Business Administration or the Internal Revenue Service, determining the business structure is one of the simpler steps of the process. Once the business structure is determined, the company can be registered to the IRS as a distinct legal entity.
Build a brand
Building a brand as one of the initial steps when establishing a startup is key, not only for marketing purposes but for a business’ mission and internal culture as well. The target audience was defined while building the business plan; understanding exactly what the consumers want and need and how to advertise that to them is the next step. Researching the competition to find what customers love, hate, and wish for allows a business to then offer all of the above to build trust while simultaneously marketing goods and services to potential clients.
In the well-known Seth’s Blog, marketing and entrepreneurial author Seth Godin defined a company’s brand as “the set of expectations, memories, stories and relationships that, taken together, account for a consumer’s decision to choose one product or service over another.” A brand is not limited only to marketing, but in the whole of a business. The website, advertisements, voice, and company culture should reflect a business’s brand as its identity. For industries like security or finance, it’s important for a brand to reflect the seriousness and professionalism many would expect in this industry. For industries like child education or fitness, the brand should be light, casual, and fun to portray a personal touch to its audience.
Trust in your team
The individuals that make up a team should embody the brand that a business aims to represent. Hire people that can be trusted not only with the important documents and confidential information that come with a business but with the attitude and determination to make a business succeed. The growth of a successful startup is reliant on those working in the trenches, acting as the face of the company; as a business owner, one should be prepared to work the longest and the hardest for long-term success in any industry.
As a startup in today’s market, there are more opportunities – and more challenges – than ever before. Understanding the difficulties an entrepreneur will face in the establishment of a startup company is crucial, but with the right business plan, it will become apparent that the gains are worth the trouble in the long run.