Starting your own business isn't particularly easy; it forces you to understand and deal with many issues, including legal, financial, and human resources. However, every early stage startup that has turned into a growing multi-billion-dollar company started somewhere, including Uber, Facebook, Tesla, and many others. Even though nothing is guaranteed, how can you ensure that you are at least following the right basic guidelines when it comes to starting your own business?
This article will present you with some of the first steps that an entrepreneur must think of and apply while planning to launch their startup.
Understand the responsibility involved in starting your own business
Starting your own business is a huge commitment and often puts you up against an abundance of challenges. Entrepreneurs who are beginners often fail to realize the significant amount of time, energy and resources needed to start and grow a successful business. First and foremost, it is important to understand that with the huge competition that exists in almost every industry nowadays, coming up with a unique and groundbreaking product or service is vital. As Elon Musk once said “You can’t come up with a product or service that is only slightly better than your competitors’, it must be way better”. Also it is crucial to have a strong plan and vision for your business and understand that you will be working more than you ever expected to. Moreover, you must not get discouraged or demotivated by setbacks, instead you must be disciplined in your work; you must maintain a good stamina to keep going even when it’s tough.
Create a business plan
A business plan is one of the most important and strategic tools for entrepreneurs; it defines - in detail - a company's objectives and how it plans to achieve them. Such a plan lays out a written road map for your startup and it includes marketing, financial, and operational standpoints. Both startups and established companies use business plans; however, startups rely on business plans more often than established businesses because it helps them achieve their goals and allows them to ensure a higher rate of success.
Your business plan should include the following:
- A business overview, which includes the legal structure of your startup and the type of business that you are doing
- A description of your product or service
- Market analysis in order to define your target market/audience
- Detailed marketing and sales strategies
- Detailed financial projections and funding; a financial plan
- Operations plan, which includes the physical setup and task responsibilities
- Analysis of your competitors and your strong points against them
- Detailed background information on all major key players in your startup
Secure appropriate funding
Many startups won’t survive even the first year of their launch because they underestimate the cost of starting a business. It is important to keep in mind that startup costs vary from industry to industry, and from business to business. Nonetheless, all startups require funds to cover basic business costs that all startups have. Now, some of you may be asking; how can I possibly cover all these costs? Where do I get the money from?
Here are the most basic ways of getting funds:
- Friends/family/personal savings
- Business loans, which you pay back over an agreed period of time
- Angel investors, who have considerable wealth and give seed funding to startups to help them
- Venture capitalists, who provide funds to new businesses with a strong development and growth potential, in exchange for a share of their company known as an equity stake
- Crowdfunding, where you raise money from a group of people online
Securing funds gets easier once you participate in entrepreneurship competitions or join startup accelerators/incubators. Networking is also an important aspect, which will also be discussed in this article.
Create an online presence and focus on your marketing
Today, no company can survive without a digital presence. You need to allow your startup to be present and active on popular social media platforms, including:
Your potential customers are using these platforms, so you need to be on them in order to target them. However, your core audience isn't going to be using all these platforms actively at once. For instance, if you’re targeting a younger market, TikTok & Instagram may be ideal. If you're targeting a more middle-aged market, Facebook is a better option.
In addition, it is also beneficial to have a website. In order to launch and promote a successful website for your startup, you need it to be visually appealing, user friendly and the content of the website needs to be fresh and up-to-date. Moreover, it is important to emphasize that your website needs to be fast and efficient and for that, you need to hire the right developers.
But, let's also not forget that traditional advertising still exists and still works well in many communities. Some of the most popular methods of traditional advertising include print advertising, TV & radio advertisements, and billboards.
Your marketing plan is one of the most important, if not the most important, component of launching your startup. For that, it needs to be detailed properly & has a budget allocated solely for it.
Know who to hire
It is important to note that no one makes it on their own. You definitely need a team & some experts that you should consider as an integral part of your startup, including a lawyer & a financial advisor. These people are important because they explain the legal requirements based on how you structure your business. Moreover, you may need to onboard an Operations Manager, a Chief Marketing Officer, an Accountant, and a Business Development Officer.
Nonetheless, you must keep in mind that hiring people who are experts at such jobs isn't enough; whoever you hire must be dedicated and resilient enough to understand the ups and downs of working in a startup. Many people can do the jobs listed above; however, not many of them are up for the challenges of working in a startup environment.
Build your Minimum Viable Product (MVP)
MVPs are vital for getting product validation, but they require lots of time and money. To get the most out of your MVP, building it with the most accurate assumptions is essential. While working on your MVP, it is important to note that an MVP has three main components: the product’s functionality, usability and scalability. Once you have these three things set, your product’s purpose will be made clear, making it easier for potential customers or investors to engage with it and judge the viability of what your startup has to offer.
It is also important to note that one of the main mistakes that new entrepreneurs make is waiting too long to release their MVP. If you let this happen, your competition will beat you to the market and claim a sizable portion of your Total Addressable Market. Your MVP must be perfect and not rushed; however, working on it must be efficient, otherwise your competitors will claim what could be yours.
As this article mentioned before, it is imperative that startups join entrepreneurship competitions in addition to startup accelerators or incubators, not to mention the average dosage of networking that needs to be done from the get go.
Creating a great and special product is important but you also need to secure funding, put together the right team and market your company - all that becomes easier once you engage with key players in the entrepreneurship ecosystem. Networking is essential; it will help build the foundation for your startup. Without marketing and networking, your company may never get off the ground or get into the customers’ hands.
Spend as much time as possible at networking events to inform others about what you are working on, even if they don't seem to be interested. Be confident about your business and allow them to truly see what you have to offer. Even if they let you down, continue conversing with them in a polite manner so that they remember you for when they are ready for the work that you do. This shows them that you believe in yourself and your product/service.
Moreover, once your startup joins a startup competition or program, this will give it the exposure it needs and grant your startup more opportunities to present itself to potential investors.
Perfect your pitch
Speaking of presenting your startup to potential investors, it is important to perfect your pitch. A pitch is meant to be a concise and engaging overview of your startup. You must explain to your audience about your product or service and its significance within its field. Even though your pitch must be solid and tidy, it must also be malleable and capable of being improvised. That is because you should be able to slightly modify your pitch depending on whether you are presenting to potential investors, customers, employees, or partners.
Here are a few tips on how to develop and deliver a great pitch:
- Be enthusiastic and confident in your delivery
- Practice until you perfect your pitch
- Keep it straight to the point
- Allow your viewers to truly see that your business is unique
- Pitch the solution that your product or service is providing
- Invite participation or interruption by the viewers; be engaging because this keeps your audience interested and focused on your presentation
Consider protecting your intellectual property
It's critical to safeguard the intellectual property of your startup (IP). Startups may be tempted to postpone investing in intellectual property protection in an effort to reduce burn rate. For that, more often than not, startups frequently lose their intellectual property rights because they avoid safeguarding their concepts and creations, thinking that they must be focusing on other elements within their new business. However, entrepreneurs must know that protecting their important valuables is crucial.
Some of the most known types of intellectual property protections available include copyrights, which cover original works of authorship, such as art, advertising copywriting, books, articles, music, movies, software, etc. and they are usually a default type of intellectual property protection; trademarks, which protect the symbolic value of a word, name, or symbol that the trademark owner uses to identify or distinguish its products or services from those of others; lastly we have patents, which give the creator of any product or service the right to prevent others from making, using, or selling the patented property described in the patent’s claims. Patents are usually complicated and expensive to get hold of, however, in some cases, certain businesses are required to invest in them. To read more about these intellectual property protections, click here to read our article “Entrepreneurship 101: The keywords that every entrepreneur should know before embarking on their entrepreneurial journey”.
Build a customer base
If you are following your business plan accurately, you are already on the right track but at some point, you will need to open your doors (or website) for business. You need to start getting customers to make a purchase & later on allow your business to retain these customers. For that, you need to focus on customer service with time.
Here are some ways to build and keep a loyal customer base:
- Build an honest relationship with your clients
- Build an approachable and friendly company image
- Offer multiple communication channels, including social media and a call center
- Give your customers a memorable experience, whether on social media, on your website or even in store
- Listen to your customers’ feedback and tend to their needs
- If possible, provide more than one payment plan
- Reward your loyal customers with reward points or gifts with every few purchases
Your team should view dealing with dissatisfied customers as a chance to expand the startup’s customer base rather than as a burden. Responding quickly to client concerns will enhance the likelihood that they will buy your products or services again. That’s because customer retention is significantly influenced by customer service. Naturally, this increases the pressure on your customer support personnel to quickly satisfy a client's request, however, by the end of the day, your startup will be rewarded with a loyal customer base.
Moreover, one of the most crucial things about customer service is to stay true to your original concept and vision, while also keeping an eye out for new market prospects and needs. Building a solid clientele base for your startup is not an impossible goal to achieve, you just need to follow a few steps and stay consistent.
It definitely takes a lot of courage and hard work to choose to be an entrepreneur. However, to reach success, it mostly just comes down to a unique idea and following through with the right steps, some of which are listed above.
It is also important to note that all early stage startups must participate in lots of entrepreneurship competitions, training programs, workshops and networking events, in order to be provided with as many opportunities as possible.