It seems that over the last couple of years the business world became much more open to the idea of startups. The reasons behind this development are different, but the cold facts remain the same – according to research from StartUp Britain, entrepreneurs in this country open approximately 80 startups each hour. We can assume that the rest of the developed countries with similar economic circumstances follow the same pattern. However, this shiny medal has its other side. Starting up involves a lot of risk and startups belonging to different industries experience failure rates that range anywhere between 37% and 58%.
It is obvious that, if you want to start a long-lasting and viable foundation, you’ll have to take all the precautionary measures into account. Here is a short checklist that should help you along the way.
Determine the Viability of Your Idea
Since you have decided to start your business, let us assume that you have some sort of an idea of what you are going to sell. Now, be brutally honest: Would you buy your product/service? If you want your startup to make a profit, you will have to find a problem it can solve. Don’t stop there. The “solution” your business offers should be something people actually need and something that will stay relevant as the time passes.
Research the Market
Researching the market is closely tied to viability of the startup. In order to know whether your idea is viable, you need to define your market. This will allow you to get a clearer picture of who your customers will be, which will – in turn – make it possible to attract new ones. Also, market size and geographical location will be your guides when choosing a place to set up a shop. When doing the market research, make sure you analyze the competitors as well.
Make a Business Plan
Business plan basically means putting everything that is already in your head on a piece of paper and figuring out will it actually work the way you planned. A solid business plan includes the information needed for effective operations and management of the company, which will help you think long-term. It should delineate all three pillars of a business venture: finance, operation and marketing.
Figure out the Financing
Launching a startup is never free. The majority of small businesses operating today got their money through bank loans and lines of credit, which created a financial climate in which it is more difficult to get money through those avenues. Still, you should try with bank loans and credit cards. Also, try to get your initial capital through assistance programs and crowdfunding (Kickstarter, Indiegogo). Finding a partner or a financier will ease some of your problems.
Choose a Name
The name of your business plays a monumental role in the perception of your brand and its growth, and it can actually make or break your company. Since the first thing your (future) customers will come in contact with is the name of your company, make sure it sums up the core of your business. Coming up with a business name can be difficult. Ideally, it should appeal to the audience you’re trying to attract, and it should also be clear, understandable, unique and creative.
Set Up a Website
So, you have a name? Now you need to get the word out. When it comes to that, the power of the internet is unrivaled. A well-designed website will give your business a professional edge, ease all your future marketing efforts and act as your online portfolio. Unless you want to look like you are running a fraudulent business, you should register a domain name that matches your business name.
Establish Yourself on Social Media
A website is only the first step of a successful internet strategy. Social media will enable you to introduce your brand to your target audience. A well thought out strategy will engage your audience, and make them excited about your business. Promoting your business on major social media networks (Facebook, Twitter, LinkedIn, Instagram…) will surely make marketing easier, but you have to adapt your strategy to every individual network, and play by their unique rules.
Address the Legal Matters
Figuring out the legal structure of your startup (corporation, LLC, sole partnership) will help you protect your personal assets. After that, you will need to apply for an Employer Identification Number (EIN) to separate yourself from your business. Depending on your industry and location, you may need a business license as well.
Open a Bank Account
Using your personal bank account to pay for your company’s expenses is not only unprofessional, but also complicated. You can avoid and prevent any financial complications by opening a bank account you will use for your business only. After you address that problem, you should set up your accounting system.
Depending on a type and size of the business you run, you may need to hire one or more employees. Before you start interviewing the candidates, you should define your staffing needs (qualifications, full-time/part-time/freelance, job descriptions…). At first, it may be easier to outsource some aspects of your business, such as IT and accounting.
Brand and Market Your Product/Service
In the end you have to spread the word about what you are offering. A strong brand will do most of the job for you, but it needs much more than just a name. You will need to decide about brand message, tagline and logo. The last step is creating a clever strategy that combines online and offline efforts.
Rent a Retail/Office Space
Brick-and-mortar businesses are far from being obsolete. If you decide to go down this path, you will have to think about this step early on. When choosing a space, factor in everything that can impact your decision: accessibility, price, size, foot traffic, etc. Give your business a clean slate, by hiring junk removal service and a cleaning company before you move into the space. Also, make sure that the future decorating efforts reflect your brand.
Organizing what needs to be done before launching the startup can make this pretty daunting task much easier. Make sure you follow these guidelines and insert some of your own to prevent being a part of the “failure rate”.