Building your own business from scratch can be quite difficult but can also be a very rewarding experience. There is nothing better than running your own life the way you want and be completely responsible for it. When you enter the start-up world, it can be difficult to maneuver your way around the ups and downs of it. Living with and learning from your mistakes is a big part of the start-up world. This includes learning coming from the mistakes of other companies as well.
According to a review published in 2019, more than 33% of start-up businesses have to shut shop in the first year because they are not able to break even. This is a sad truth, which is why any business owner should be aware of certain strategies to help them achieve their goals much faster. The only difference between a start-up founder and the rest of the population is the willingness to take action on an idea. The biggest part of execution is actually just getting started. There are certain things you should have in order to build a solid foundation for your start-up.
Be Thorough with Your Market Research
The first step that will help you in determining whether you should start your business is to conduct market research. Find out if your idea is really worth pursuing. Write down a problem faced by the target audience and then the solution that you are offering to them.
Is it something that people want? Is there a need for this product in the market? Is this need being fulfilled by any other company? Has this product reached its saturation point? Conduct a proper survey for potential “customers”, meaning, your target audience for the product. Go around and check out the competition and their progress. Once you have enough research material to start building your business, it will help you in writing down a good business plan in order to secure funds.
Make Sure You Get the Rights to Your Product
As soon as your business is on the table, make sure to secure intellectual property (IP). IP refers to a process through which a company or an individual can own the rights to a product. You must have heard of terms such as copyright, patents, and trademarks. These are different kinds of IP. It is very vital to the success of your business that you understand and follow the protocol to protect your product. If you end up getting an IP early, you will save yourself from the copycats out there.
Looking at this from a different perspective, make sure that you do not end up violating any existing non-compete agreements or IP rights, otherwise, you might find yourself in for a big lawsuit. Once you find out that you are in the clear, go ahead and apply for an IP right. You can even transfer the ownership to the company as well.
Be Self-aware and Create a Brand
Anyone who says that not everything needs to be a brand to sell is wrong. When we sell a product in the market, we are not only selling it based on its usage but also its image as a brand. More than just choosing a name, this is about the identity of your product. Remember to choose wisely and keep in mind any existing product failures or successes that are associated with the name of your product. This can deeply impact adoption. Secure a website domain for your business early.
Incorporate Your Company
This might just be the deciding factor for how your company will work in the future. Incorporation refers to the process of making your business a legal entity that is registered, deciding how it will be structured. You can either choose an S corporation, a C corporation, or an LLC. LLC and S corporations are given special tax exemptions, while C corporations are not. Your taxes as well as your equity compensation will be decided based on how to choose to incorporate your company. Be sure to check out the rules in your state and the taxes related to these as well.
Be Prepared to Secure Your Data
What most start-ups don’t think about is getting good cybersecurity for their business. As a founder and owner of a new start-up, you want to make sure that your customer’s privacy is well protected. Their private information such as their phone numbers and addresses are in your system, and it is vital that you protect it against malicious cyber attacks. You should secure your data against all threats possible. The reputation of your business seriously depends on the security you provide to your customers.
Find a Mentor
This is quite a controversial subject. It is important to first determine whether you think you would benefit from having a mentor or not. After you make a decision, be sure to find the right one. The right mentor can make all the difference and can help your business shoot up and grow swiftly. Even if you and your co-founder combine your experience together, it won’t be as useful as the right mentor. Do your research well for something like this, they can provide wisdom and deep insight into the industry.
Raise Capital for Your Business
If you are not self-funding, it might be a good idea to focus on arranging capital for your business as quickly as possible. You need an amazing business plan for this. There are usually three options available to start-ups in case of raising funds for their venture. They can either obtain it through a traditional VC firm, crowdfunding, or even money from an angel investor. Founders often give equity to venture capital investors or angel investors in return for advice or money. This can seriously help boost your business, but remember that it has a dark side as well. You can become quite constrained if you have investors watching over your every move. It is vital to understand all aspects of this before moving forward.
The list provided to you is not exhaustive. Your steps towards building your start-up depend on your situation as well. These tips and strategies can definitely help you build a stronger foundation for your business.