Do you know exactly what a startup is and what are the things that every startup should consider?
Let us start this article by clarifying what a startup means.
A young company that is just beginning to develop is a startup. Usually, startups are small. They are initially financed and operated by a handful of founders or one individual. The mentioned companies offer a product or service that is not currently being offered elsewhere in the market. Or it can be something that the founders believe is being offered in an inferior manner.
As on early stages, startup companies work on developing, testing and marketing their idea their expenses tend to exceed their revenues. So they often require financing. They may be funded by small traditional business loans from banks or credit unions, loans from local banks, or by grants from nonprofit organizations and state governments.
Investing in a startup is risky as startups do not have much history. Despite the above-mentioned let us agree that the startup phase of your new business is likely the most exciting and exasperating time you will experience in the life of your new enterprise.
Startup business includes the pleasure of creating something new from scratch, overcoming the naysayers and obstacles in your way, feeling that your dream is about to come true, etc. But there is the other side of this again. It can be as frustrating as running headfirst into a wall (which, some days, it feels like you are doing repeatedly when all you want to do is move ahead) for example.
So let us move on and find out what should every startup consider.
People will not be keen to give you money
There are some particular types of startups that are considered to be less risky than others. Normally banks and other traditional financial institutions are notoriously reluctant to loan money to retail or service startups. As you may already know there are not a lot of business grants out there, to begin with. And very few of those available are for startups. So if your startup belongs to that particular type you have bigger chances to find sponsors.
Keep your current job, if you have one
Keep in mind that you will not make any money right away. It can take a long time until you will be able to pay your personal monthly bills. Most possibly, you will not make enough from your new business in the beginning. You just have to keep your current job to be able to pay all the bills and just wait for the money to start coming in.
In some cases, you will not make enough from your new business to pay your personal monthly bills for an entire year (it can even take longer).
Always plan first then act
When you haphazardly decide to do this or that you are likely to fail. That is the great recipe for disaster in the startup business. Acting without a plan is a terrible way to start. There are definitely a lot of things that need to be done for you to successfully launch a new business. It is highly recommended to write a detailed business plan and to follow your plan when acting. They say grunt work now equals success later.
Hire specialists to help you
If you want to know running a small business can be equal to having twelve jobs or even more at the same time. Normally there are not many people over there who can multitask easily and succeed. Most people have a hard time doing two things well, let alone three or more. Our advice is to bring a bookkeeper, an accountant, a receptionist, an answering service, a social media manager or whatever other specialists you need right from the start. This is in order to save you in many aspects. Just go ahead outsource and hire as necessary.
A good idea is not enough
Some people think you only need to have a great idea and that is it. You will make big money and die rich. This is not correct. A good idea is not enough. You need to have a well-developed idea which is the key to your success.
Being a good salesperson matters
You really have to pay great attention to the marketing, especially in the startup stage. This does not mean that you have to be out there in cold calling and making sales presentations, constantly checking and posting on social media, personally serving customers, etc. You just have to pay more attention to marketing. It is better to prepare a marketing plan and implement it.
A great thing is to be personally able and ready to talk about your business to whomever at any time. Even more, you have to be able to describe your business in two or three sentences. When the one you are telling about your business shows interest or that it matters to him/her this is when you understand you did it right. This is why every small business owner has to be a salesperson or marketer at some stage.
Make it legal from the start
First, of firsts, you have to make it legal. Here we mean making sure you registered your business properly with your municipality and your province. Also, it is crucial to be complying with all government taxes and regulations. Make sure that you think ahead and choose the right business structure for your business activities (get all the coverage you need).
Forget about skimming which will definitely cost you in the end. Let us say you are going around cleaning people’s gutters and do not have the workers’ compensation insurance. Unfortunately, one of your workers gets injured. So what? Be ready that the resulting financial fallout could ruin not just your business, but you personally.
Keep in mind that you do not want to have any problems with the government and do your best to avoid that.
Hopefully, now you know what you should consider as a startup. Nobody wants to go through the whole process of creating a startup and then fail as starting a business takes so much time and investment of a person’s financial, mental and physical resources. Remember that your aim is to startup to succeed and not to fail. We wish you good luck.