Launching an entrepreneurial dream is a kind of revolutionary. Overnight, you transform from a follower to a leader, and everything you do has a direct effect on your bottom line. The freedom of the startup life is dizzying, but an estimated 90% of startups fail. Less than half last beyond their fifth year. It's within your power to improve those odds, though. If you make sure your startup toolbox contains all the requisite tools, your success will be easier to grasp. Let's look at how to start a startup.
Define Your Business Identity
Before Dropbox became a hot dot.com dream, it was a withering failure with no revenue to speak of. Steve Jobs waved away founder, Drew Houston, with a dismissive flourish, and Dropbox's profits were equally embarrassing. Then Houston took one important step. He asked himself what the purpose of his startup was. The instant he created a clear image of his business identity and purpose, millions of users began to stream in.
Business identity is one of the most important things you'll ever define so hone your concept carefully. What is your corporate culture? Who are your users? What's the true value of your product? What pain points are you addressing? Any corporate rockstar worth will ask you to set big goals, but a polished business concept will carry you much further. Remember that not all businesses are Amazons and Dropboxes. "Many small businesses try to follow the exponential-growth-VC-funded approach," says Caya, Slidebean’s CEO. Not all startups are global legends, and not all startups should be.
How to Start a Startup through Research
Even the hottest startup can fail in a saturated market. Even the most polished marketing campaign can be ignored if it targets the wrong demographic. Even the most careful logistics strategy can nosedive if it carries your product to the wrong people and places.
Almost every form of startup failure can be prevented with due diligence, so do your research before you even consider launching. Demographic and market research will carve out your niche and answer every question you'll ever ask about your business. Competitor analysis will ensure that that niche is available to you.
Build a Minimum Viable Product
There are two broad approaches to how to start a startup: launching out of a garage or going big with loans or angel investors instead. Eric Ries' lean startup methodology throws both options to the curb by balancing risk. It recommends short product development cycles followed by careful analyses of your success. This way, you can find out if your business model is viable without making excess losses. Lean startups build minimum viable products, then validate them by testing them in the marketplace. If your first run is successful, it's time to tweak your product or pivot your strategy before you run another test cycle.
Write a Business Plan
Few things terrify new entrepreneurs more than the creation of a business plan, but it's easier than you might think. In fact, you're halfway there already. Your plan should include:
Your business description.
Demographic analysis to define your market and direct competitors.
A definition of your product, including test results, pricing, and diagrams.
Your initial marketing goals, including your pitch deck.
An operational plan to cover the facilities, technology, and equipment your business needs. Quality control checks and supply chain strategies should also be included.
A two, five, and 10-year financial plan.
A list of team members, founders, and shareholders.
An executive summary covering the key points in your business plan.
This document might be required by some entities but, if you have a choice, create a pitch deck instead.
Create a Pitch Deck
When the time comes to raise funds, you'll be carrying a pitch deck with you for quite some time. This is a short slide presentation that covers your business concept, plan, and vision for potential stakeholders and investors. Your pitch deck should define your pain points and their solutions, including your market size and business model. Unlike your business plan, it needs a sales-y, image-rich approach that convinces through feelings as much as it does facts. Think of your business plan as Warren Buffet to your pitch deck's Bill Gates. It relies on storytelling more than it does evidence. If you're out of your depth, take a color-by-numbers approach with Slidebean's pitch deck templates. It couldn't be easier.
Your team is your most profitable asset, and the way you lead it will leak all the way down to your bottom line. Your users are a part of your team, too, so don't forget to incorporate them into your goals. When it's time to test your product and gather feedback from your first users, you can add to your market research to inform future improvements to your targeting.
Having a solid founding team will increase your chances to raise funds from VCs or angel investors when you are done bootstrapping.
Fund Your Business
Once you have a clear picture of the assets you need to collect and once that you’ve gained some traction, you can slap a price on them and begin thinking about funding. Your choice of business loan, venture capitalists, family, friends, or angel investors will depend on many variables, for instance, your credit rating and willingness to share your dream with partners.
With your first transactions out of the way, you'll have the information you need to scale your business model. You might need to look for new markets or nip and tuck your marketing campaign, and that might require another cycle of funding. Your approach will be partly determined by whether you've chosen a startup or small business model.
The startup life is tough, but it's also thrilling. It insists on your full and lasting passion, but it rewards every tiny sliver of work you put in. Welcome to your future. It's going to be an exciting ride, so please put your chair in the upright position! If you still need guidance, there are free resources available, like this Udemy course: Starting a Business 101.