When opening a startup, there are few steps that you need to take to help ensure your success. Starting a business of any kind is never easy, but you’ll be faced with problems that small businesses don’t have. Here are steps that you can take when building a startup.
Determine What Customers Need
Your business needs to address an issue that your customers have. The goal is to write down what problem your startup could solve. Focus on the problem first. Next, determine which customer segment your problem relates to.
For example, if you’re building an online course on social media marketing, your target customer might be small business owners to people new to marketing. These individuals might face problems such as not knowing which platforms are right for which businesses, how to create effective posts, and how to advertise on social media.
Do Market Research
Make sure that you conduct market research to determine if your idea for a startup is worth pursuing in the first place. Now that you’ve determined a specific problem that you’re solving, write a survey and ask as many people to answer it as possible. You can check your results to determine if your product or service really does solve a problem for any specific customer segments.
Intellectual property (IP) is the process of obtaining the rights to the product that you created. IP includes copyrights, patents, and trademarks to ensure that no one can steal your idea and begin making money off of it. Because copies can be detrimental for you, especially if they are available at a cheaper price point, you must follow the proper legal protocol to protect your business.
You’ll need to make sure that you aren’t copying someone else as well. You may have developed a product that already exists without knowing it. By going through this process, you can confirm that you’re not violating any IP rights or non-compete agreements in place. Once you know that you’re in the clear, you can begin filing for a patent or apply for a trademark or copyright.
Branding is your business’ identity and goes far beyond just choosing a name. Part of your branding is the imagery you use, and part of it is how your business portrays itself. Once you’ve chosen a name, you’ll want to choose a logo and company colors so that you can begin increasing brand awareness and visibility as soon as you launch.
If you choose a name that another company used to do business as, make sure that you won’t be taking on any of its potentially bad reputation. Once you choose a name, you should immediately secure your domain name. Domains sell every single day, and if you want the best rates, you’ll need to find a domain name that best suits your business.
Once you have your name, domain, company colors, and any other visual branding aspects, you can begin crafting your elevator pitch so that you can respond when someone asks what your company does.
Incorporate Your Business
Incorporation is necessary for a startup because every aspect of the business life cycle can affect it and be affected by it. Incorporating turns your business into a legal entity and structures it. As a startup, you can be incorporated as an LLC, a C corporation, or an S corporation. LLCs and S corporations provide tax exemptions, and a C corporation is a taxable entity.
When incorporating, each legal entity comes with pros, cons, and other considerations that you’ll have to make. These considerations can be anything from where you want to incorporate your business and equity compensation for raising capital.
Write a Business Plan
Write a good business plan to help you get started. You can use this plan so that you know exactly what you need to do and when. Using the research you did earlier, create your business plan and choose the goals that you want to accomplish, and include how you’ll grow your business, whether through digital marketing or paid advertisements. Set milestones for these goals so that you know what it takes to get there.
You can’t do it all on your own. You’ll need to eventually hire employees with high-demand skills to help you grow your business. These employees can be people in charge of marketing or an assistant to help you stay on top of all of the things you have to accomplish as the owner of a startup.
Hiring employees means that you won’t have to take care of every aspect of running the business. Unfortunately, business owners who have been a one-person show for a long time have difficulties delegating tasks and will often put off hiring qualified employees.
If you’re worried that you don’t know how to find the right employees for your business, you can conduct pre-employment screenings to ensure you’re making good hiring decisions.
It’s important to note that you don’t have to hire employees after writing your business plan but instead choose to hire them when it makes the most sense for your business and you have enough money to pay them.
As a startup, you’ll most likely need a financial investment to get the company off the ground. To raise capital, you’ll give equity in the company to either angel investors or venture capital investors in return for their money and advice.
Taking capital investments can have a positive impact on your startup, but you must be cautious because it can be disastrous as well. If you plan on getting investors, begin by deciding how much money you need to raise and how investors will affect your business. Once you know that information, decide how you’ll be raising the capital.
Next, practice your pitch so that you can perform well in front of investors.
Final Thoughts on New Startups
Starting a business can provide you with freedom from the traditional 9-to-5, but it does come with a list of new challenges, from finding investors to actually launching your company. It’s going to take a lot of work, but with the right product and dedication, you can make your startup a success.
Authors Bio: Matt Casadona
Matt Casadona has a Bachelor of Science in Business Administration, with a concentration in Marketing and a minor in Psychology. He is currently a contributing editor for 365 Business Tips. Matt is passionate about marketing and business strategy and enjoys the San Diego life, traveling, and music.