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Launching a startup isn’t easy, but it’s the path of least resistance. In 2019, Forbes stated that all major tech companies began as startups? Take Facebook, for example. It launched with zero capital and became the largest social media platform on the planet. And Google started as a small university project between two Stanford students.
These ventures prove that launching a startup is possible even if you don’t have loads of money. The idea is that hard work and organized determination are all you need. Meanwhile, about 70% of businesses start in small spaces with enthusiastic people on a mission.
Launching a startup sounds appealing because you instantly think about the future and start planning your income as the boss. And you get to work on projects that mean something to you. But that doesn’t mean becoming an entrepreneur is easy. There are many things to consider before going into business for yourself.
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Startups are not for the faint of heart. Your goals do not come with simple instructions, and every path is different. Growing any new business takes dedication. But launching a startup takes even more time and energy.
It involves finding the right people and expanding your network. You also need to look for funding sources and register your business. Then, you should hire passionate employees to manage production and distribution. And even more critical is being prepared to make the necessary sacrifices to get the job done.
Startup launching is all about learning through the whole path. So, do you have a great business idea? If so, here is what you need to know.
Some may have the idea of starting a business without even thinking of its purpose. But you have to evaluate whether the concept and process are worth your time. Determine your passions and define your objectives to create a successful business model.
Here are some common motivators to get you going:
- You want to fulfill a neglected market need.
- You’re into building something from nothing.
- You want to escape the 9-5 lifestyle and control your income.
- You’ll provide positive change for the world.
Everyone has a different reason for launching a startup. And that means yours don’t have to match anyone else’s. There are countless triggers to act. But the most powerful ones inspire us on a personal level. So, don’t start anything because you think “it will be fun.” Put some thought into it first.
What kind of income can a successful startup generate in the future? That depends on several factors, including how hard you work. And ventures that cost more to launch than they earn are worthless.
Money shouldn’t be your only determining factor, however. You should try to focus on the bigger picture and predict plausible outcomes. After all, it’s your responsibility as an entrepreneur to ensure financial viability for your new business.
Begin by studying your target demographic. That’s the group of people who need your goods or services the most. Your business should focus on their wants and needs, providing solutions for shared problems. A well-thought-out target audience will become your company’s core and ambassadors of your brand.
Informing the right people about your new business is critical. But advertising your products to people who don’t care is an exercise in futility. You waste time, money, and energy trying to capture the attention of the wrong groups. And the consumers most likely to spend money don’t even know you exist.
Demographics research puts your business on the same page as consumers. It helps you speak their language and understand their requirements, complaints, and trends. No product or service is for everyone. So, try to hone in on the people who could use your business model the most.
DID YOU KNOW: Target audience studies create more effective marketing strategies to ensure a higher income and ROI.
After you have a clear view of your target audience, start dividing it into smaller groups. Here are five crucial questions to ask when specifying your demographic:
- Who – Who are the people that will spend money to get your products/services?
- What – What are the products/services that you offer? What can the customers buy from you?
- When – When will people buy from you? Are your products/services seasonal?
- Why – Why should people purchase your product/services. What can motivate them to take action?
- Where – Where is the best place to sell your goods and services to make the most impact?
These questions can help reveal the true purpose and trajectory of your business. But you must also consider the competition. Chances are, established companies have a head start on delivering market needs. So, find a way to be different.
No business operates alone in n industry. When launching a startup, you perfect an already existing idea or create alternatives. Meanwhile, there can always be multiple variations of the same business in the market. So, conduct research to get to know the target audience of companies with similar offerings.
Analyze competitors to discover how they interact with their demographic. Find out their marketing methods and determine how they sell the brand. Using this method, you can predict how your customers react to your product. It also reveals your competitor’s weaknesses to future exploitation.
No matter how exciting your idea is, you need to obtain sufficient funding when launching a startup. And there comes another vital question to address. What are the ways to finance budding startups and pay for the operational expenses?
Some may invest from personal savings or borrow money from loved ones. For the others, alternative funding options are more practical. Either way, your launch takes time, dedication, patience, and one of these options for generating investment capital:
Investors ready to finance a startup from the very early stages are called “angel investors.” Their interests are equity ownership and stock options. Thus, many high-profit companies owe their humble beginnings to generous angels. We’re looking at you, Facebook and Uber.
Crowdfunding is another common way of finding financial resources for a startup. This method involves raising money through various sources such as websites, groups, and organizations. It also promotes budding businesses across multiple platforms.
It’s relatively easy to host a Crowdfunding campaign. First, research websites that are potentially attractive to your target audience. Then, communicate the required information and reveal the amount you need. After that, interested parties will begin making small deposits to the cause. And eventually, you’ll have the capital you need for a successful launch.
Some websites might charge a small fee to run an ad campaign. So, here is a list of low-cost alternatives for your consideration:
- Crowd Supply
Remember these two facts if you spend personal or business capital when launching a startup. One, every dollar you invest can help solidify your future. Two, you must be smart about where you put your money.
Venture Capitalists provide strategic assistance, money, consumer insights, networks, employees, potential partners, and more. However, most VC firms only consider investing in a startup if it shows growth potential. So, you must provide data to support your vision. And you have to prove that your business model is worth their time, money, and connections. Here is what they want:
- Specific Industrial Sectors – digital media, medical laboratory, SaaS, Ios Android development, etc.
- New ideas of already successful companies with high revenues
- Startups located in high-income locations such as Silicon Valley, New York, Seatle, Tulsa, etc.
For more information, reach out to a venture capitalist nearby.
This is one of the most common ways of funding a startup. Many traditional and non-traditional lenders provide small loans to new and established businesses. The loans may not be substantial, but they can help the startup grow and generate higher sales. So, use loans to invest in marketing and employment because both will become core elements of your business.
NOTE: Consult a financial advisor for more details on the best funding options when launching a startup.
Out of every 100,000 people, 320 of them launch a new business each month. And that’s just in the United States. Many of those companies started with a single idea that blossomed over time. Plus, not all of them succeed. You need an intuitive strategy to make the launch profitable.
Begin with the end in mind. Ask yourself what you want to gain from launching a startup. Remember, entrepreneurship can be costly and time-consuming. But strategizing every step is a wise way to analyze the pros and cons of your ideas. So, ask yourself these questions as well:
- Do you see yourself as a CEO of a high-income company in the next 5, 15, 25 years?
- Do you imagine your business being on the list of the most successful companies and going global?
- Is it possible for you to sell your business in the future to generate a quick income?
- Is your startup just a way to earn a sufficient amount of money to pay for your daily activities?
Now, let the market influence your next steps. And don’t forget that you can’t plan every detail. That means you should work a financial cushion into your goals for fiscal emergencies. Then, do the following things before collecting your first dollar:
Launching a startup takes more than a great idea and generous investors. You must also get ready to fail because many small businesses do. According to Entrepreneurship Essentials, only about 25% of startups survive the first 15 years. About 70% make it through the first two years. But preparation for inevitable and unexpected expenses is always crucial to future operations.
There’s an old saying about the commitment that goes, “In a bacon and egg breakfast, the chicken is involved, but the pig is committed.” Consider what that means when launching a startup and managing operations. If you treat your business like it’s a part-time hobby, you’ll get part-time income and brand recognition in return.
Don’t give up when things get complicated or challenging. View those instances are opportunities to learn. A budding business requires lots of attention and years of dedicated hard work. So, get ready for the long haul as a new company founder.
Your idea could fall through the cracks without a solid marketing strategy. That’s why the following steps are necessary:
- Think of an attention-getting name for the business
- Create a brand
- Mission Statement
- Brand Statement
- Launch a website and manage social media accounts
- Develop or improve your products and services
- Work on promotional channels
- Find options to fund the business
- Come up with a proper sales strategy
- Balance the budget
- Hire accurate accountants
- Use risk assessments to make decisions
Always talk to your co-founders and core staff to determine the best techniques. And try to track your progress along the way. Then, have regular meetings to discuss potential changes.
Launching a startup is tricky, and it involves multiple steps. However, there’s always an enthusiastic entrepreneur waiting to tell you about their success. So, achieving great things from a new company is possible with the best strategies.
You are the sole proprietor of your business. And that means the responsibilities and challenges fall on you. However, you can outsource, network, and hire better to achieve loft ambitions. And then build a support system to help you through difficult times.
About the Author
Jonathan Hung is one of the most active angel investors in Southern California, his mission is to drive value creation within each portfolio company. In support of this mission, he serves as Co-Managing Partner at – Unicorn Venture Partners.
He and his team target investments in US companies that have global market potential with a focus on long-term growth expansion to East Asian markets.
Jonathan developed his investing prowess as a Managing Member for his family office fund, J Heart Ventures, which made investments in start-up companies such as Gyft, ChowNow, Miso Robotics, Clover Health, Bitmain, to name a few startups he funded.
Jonathan has various degrees from the University of Southern California, London School of Economics, Massachusetts Institute of Technology, and The Wharton School at the University of Pennsylvania.