How to Set Up a Successful Startup Business
Many new entrepreneurs want to replicate the overnight success that they see in the news. However, that is rarely the case for any new startup launch. Instead of measuring yourself against others’ success, focus on strategizing your own business model for greater benefit.
Consistency is a key element for any successful business as the motivation that you started with might wane away over time due to burdensome logistics. So, building a routine habit that you can follow ensures productivity even at lazy times. Therefore, below here is a list of a few points that you can take note of before kick start your dream project.
1. Establish a Firm Business Idea
Find answers to these three questions: What do you love? Are you good at it? Is it profitable? And you will figure out a viable and workable business idea. Because you need to love the product that you want to market. However, loving alone will not guarantee its success. You’ll need to be good at it and also make profits out of it at the same time. If you’re good at baking cakes and there are three cake shops in your town, the business will not be profitable. On the contrary, if you have no idea about cake or cookery, but want to set up a bakery, the business will not last long. Therefore, you need to both love your business product, be good at it and also have to make out profitable.
2. Research Your Market
Many startups spend more time on the product than on assessing the market competitors. That’s why, despite having a good product, many business launches fail simply because the town already has better retailers. Therefore, it is your job to collect the census data, study the demographics of your customers, survey the consumers whether they would want something or not, and analyze the trends in the market.
If you find your product to have strong competitors in the market, you can try to narrow down your focus. If you want to start a travel agency and there are already three in the market, try to focus on, say, agencies for disabled people.
3. Develop a Sustainable Business Model
You need a complete roadmap of your business plan when you approach banks or investors. A SWOT (Strengths, Weaknesses, Opportunities, Threats) analysis will come in handy even if you self-finance. A business plan can consist of: an executive summary, business description, market analysis, products and missions, financial plan, etc.
You will also need to have a viable exit strategy when it’s time to retire. Without this, the long-term plan may foil if you don’t have backup plans for your business. Aside from this, the model should be designed in such a way that it can be scalable to new places or numbers when required.
4. Select Proper Business Structure
There are many ways you can format your business model. One way to do it is to have sole ownership. That means all the debts and liabilities are on your shoulder should your business fail.
Then there is LLC (Limited Liability Company) where you have limited liability that is distributed among other members. That way you will not be solely responsible for taxations and debts. Similar to that, there is an LLP where you have to share liability with a business professional.
The corporation is another way to structure your business where it can be taxed as either C-corp or S-corp. For small business ventures, taxation can be relaxed if it’s S-corp.
5. Keep a Financial Tab
Before you start your business, you need to make a list of expenses that will kick start the project. The expenses will cover the initial supplies, the cost of professional help, the licenses and permits, the real estate purchases, and all other than can incur during the operation.
You have to design your financial expenditure in such a way that you have enough capital to fund your business for at least the first six months despite not making any profits. The point at which it will start to make a profit is called the Break-even point and that can take as late as even a year.
6. Fund the Business
There are two possible ways to fund your start-up business: internal and external funding. For internal, you can use your own savings, take credit loans, or borrow money from friends and family. However, if your business fails, you risk straining your relationship and losing all of your money.
The better way to do it is to take short bank loans. That way, even if the start-up fails, you can always liquidate the company assets. There are also crowd-funding, external investors, venture capitals, and angel investors to fund your business ideas. This is a more common way to finance your project without taking too much of a risk.
7. Promote Your Business
Many entrepreneurs spend so much time and money on the development of the product that they have little to no money for the promotion of their product. In fact, marketing the product becomes an after-thought for many businesses which is a red flag for future failure.
In this age is social media, try to take advantage of Facebook, and Twitter to promote your business, either by creating a page or by buying sponsored ads. Then there is website creation which is one of the key elements in this age of technology. Also, you have to rely on SEO so that your site pops up at the first click. You can also add your business to as many directories as possible.
In Conclusion
Starting a business is not an easy task in this 21st century, more so when the competition in the market is so high. Therefore, you need to have a proper roadmap as well as capital to launch your start-up ideas and also proper guidance to stay afloat on the market.
Therefore, do your own research about the product or service you want to launch, study the market trends, manage investors to fund your projects, hire skilled and dedicated people, consult experts, etc. so that you can finally make your long harbored dream come to fruition.