Ideas are never wrong. Some ideas help your startup off the ground, while some make you struggle a lot. Fact… uh.
That means if you have an excellent idea, that does not mean it would lead your startup to 100% success — you might fail. In fact, 70 to 80 percent of startups fail. And the most fundamental reason for the failure is they neglect to “look before they leap.”
Let’s not get intimidated.
If you are a beginner, the statement given above may be intimidating, but the aim is to help you prepare. Learning from your own and others’ mistakes is part of living and working in the startup world.
A successful entrepreneur and startup take failure just as another learning, and it works for them to develop a new and robust business plan that never fails.
In short, you need to understand the difference between having a great idea and creating a successful startup.
What does Idea Require?
A successful startup idea requires planning, hard work, dedication, money, mission, vision, some sleepless nights, and even some initial failure. When you are prepared to accept and tackle these things, then the next step is “SUCCESS.”
Your ideas need a lot many things to be implemented. We, in this article, aim to support your ideas and give wings to get your startup off the ground.
We are pleased to share our knowledge and experience to help new entrepreneurs and startups make their initiative a little easier and less stressful. So, here we go;
#1. Make a business plan
You might be wondering when you have a business idea, then why do you need to have a business plan?
Let’s not get confused between different terms —ideas and business plans. They are entirely different stories. One deals with rational substance while the other deals with facts and practical sense. For example, when you have an idea to start a business, you must have a legitimate business plan to implement and execute them.
The significance of business plan
Let’s take a look at this infographic image below;
The graph shows a survey of 2,877 startups and entrepreneurs published on Small Business Trends.
Of 2,877 participants, 995 had a business plan
- 36% of those with business plan secured a loan
- 36% of those with business plan secured investment capital
- 64% grew their business
Of 2,877 participants, 1,556 had not yet completed their plan
- 18% of them secured a loan
- 18% of them secured investment capital
- And, 43% grew their business
The data given above shows that a business plan can play a significant role in deciding your company’s scope. Indeed, it’s a written description of your company, showing your business’s future and success ratio. The outline (business plan) showing 5W1H (Five “W” refers to What? Who? Where? When? Why? and one “H” refers to How?) will give perspective to your idea, woo investors, including angel investors and customers.
They (business plans) are typically created for 3-5 years of business strategy. You need to keep a business plan at the top of the list as you need this to create further course of actions/steps.
#2. Secure appropriate funding
When you explore online data, “why startups fail,” you will find that “ran out of cash” is the second top reason.
For a new startup or venture, you need capital. You must have gone through some business ideas or suggestions online that claim that investment may require for certain businesses. But, there are no such businesses with “no-investment.” Every business needs money —there is no magic number.
Startup costs vary from industry to industry, but funding (more or less) is always needed to get yourself off the ground.
If your startup is small or part-time with no necessary equipment, staff, or overhead requirement, even then, it would cost no less than $10,000. However, if your startup does not include these parameters, it may cost you millions.
According to Entrepreneur;
- Around 565,000 startups get registered each year in the united states
- $78,406 is the average funding these startup raise
- The majority of this money is raised from owners’ pocket
Let’s take a look at the graphics prepared by Entrepreneur;
Now, let’s scroll back to the first step, “Make a business plan.”
When you prepare your business plan, there will be a financial plan as part of your business plan. The financial part refers to;
- Balance sheet
- Sales forecast
- Profit and loss statement
- Cash-flow statement
These statements are crucial as they will determine how much funding you will need over the period of 5 years to manage your business.
When you outline your business idea, you may discover that the funding you need is much higher than you anticipated. If your startup business includes mobile and web apps, it will incur additional costs. You will get the estimation while creating the mobile and web app ideas. Let us give you a simple assumption. If you create a simple mobile or web app for your venture, it may cost you somewhere between $50,000 to $100,000.
Coming back to the funding part
As we have seen in the graph given above, most of the funding comes from entrepreneurs’ pockets. Now, take another assumption, if your startup requires $100,000 to get a start, and you don’t have that much capital. What next?
We know you won’t give up. Even we don’t suggest so. You have some options to explore.
- Get loans from banks: You must be smiling right away, thinking that the bank never gives such a massive amount as a loan. We do second your opinion, but that is not wholly true. Yes, banks are less likely to offer large amounts to a startup, but if your business plan is reliable, you can secure funding to some extent, if not whole.
- Secure funding from investors: Again, if your business plan is fair enough, you may be able to woo investors and hitch fundings as much as you need.
Besides, the investors can be anyone, your brother, friends, angel investors, or anyone interested in your business idea.
#3. Choose products that solve real problems
It’s OK if you consider coming up with innovative business ideas and products that are creative, exciting, and imaginative. Still, it is equally important to measure whether it solves the real needs of the market. The best company is known for its products and services that serve consumers’ needs and adapt the changes as demanded.
#4. Leadership inspires moral, commitment, motivation
Being a leader, you must be prepared to steer the ship towards the goal confidently. You must start with the foundational direction, but the ultimate success lies on how leadership drives business towards success. Your work ethic, determination, and attitude should set an example for the rest, be it your team or company.
#5. Have the right people around
We understand that the vision for your startup goal is singularly yours, but you need a support system to reach that goal. Apart from investors and partners, you are going to need some people as your staff or team. The point to note here is that you need the people who actually understand your vision and perfectly fits into your work culture.
#6. Register your company
You may have to go through some legal process to authenticate your business. For example, you need to register your business. And, to do so, you need to prepare certain documents. Take the help of consultants like a lawyer, accountant, financial advisor to save you from getting dragged unnecessarily into legal issues. At the same time, they can help you save some money in the long run.
#7. Keep signed contract
Paperwork may seem dull initially, but it helps you save from someone or something breaking your business. Whether it is an agreement for the property, partnership, employee, or anything else, it should be formalized appropriately, with a signed contract. It will help you run uninterrupted business and protect you against future legal fights.
#8. Find the right location and build a website
Your startup need a physical address as well as a website address. You need to buy or lease the property to create an office and production unit. You can decide whether renting a property suits you or owning it. Leasing property is costly in most countries, including the USA.
For a startup, you must secure enough funding to afford to buy or lease property.
Buying property will save you in the long run.
Now, you need to create a website for your business. Do it as soon as possible without waiting until the day of your business. Build a website, start blogging, start promoting your business ideas, and inform consumers about your business how it will help them.
You can also utilize social media platforms like;
You must be having most of your prospective customers across these channels.
#9. Market your startup effectively
Marketing for your business is as essential as water to survive.
You are offering the best product and services, but it brings no benefits to your business if nobody knows about it. That means you need to market your startup to reach the masses out there, waiting for your products.
Simultaneously, being a startup, you may not want to hire a professional (at least, during the initial phase) and do the marketing yourself. In case you are not a marketing expert, you need to become one.
Marketing involves factors like;
- Content marketing
- Social media marketing
- Email marketing
- PPC (if your budget allows)
If your target audience is the local community, you can also take the help of the following advertising;
- Print advertising
These marketing methods are effective. Once you grow your business, you can also consider hiring marketing experts.
#10. Serve customers, not yourself
No doubt, the start-up is yours, and you are its owner, but it is not for you. It’s for your customers. Always keep this in mind that you are there to serve. Your every decision should be made to benefit your customers. That means the decision should be customer-centric.
#11. Build customer-base
When you follow the list of plans given here, you are already on the right track towards customer building. When you have your website and active presence across social media channels, adopting marketing suggestions and more will keep you going.
Have you ever thought about what attracts customers to your business? Today’s customers like speed, comfort, and convenience. If you are offering these three things, you are likely to build the strongest customer base, become more popular among your customers, and earn maximum business profits.
Let us tell you a hard fact if you get customers to buy your product, that’s marketing, but when you make your customers buy the products the second time, that’s marketing success.
43% of revenue to a typical online store collected from repeat customers
You need to ensure that you get repeat customers and the key to getting it is;
Provide unique “Customer Service”
#12. Welcome Unexpected
In any business, “unexpected is expected.” You need to expect it too. You are launching a startup, and you know that achieving startup success will not be a cup of tea. You don’t have to invite any hurdles. It is there. Just get it along besides running away from it. Limitations can be seen as speed bumps in business terms, and if you let them go unsolved, they become roadblocks. Stay motivated if something goes wrong —peak and recession are part of it.
#13. Do not be afraid of competition; prepare to fight it
If you don’t have any company in the market to compete with, you may not solve the problems correctly. But, letting competition put you off can be daunting. If you get competition, that means you are onto something and will impact positively. Stay focused, stay competitive.
#14. Develop a roadmap with expertise
Even though this part belongs to a business plan, creating a roadmap and expertise will crucify your business’s critical path. If you have defined a roadmap, it will let you go beyond a plan into goals, removing all diversions and distractions. Apart from the roadmap, you also need to focus on establishing. Your reputation as an expert can make a significant difference. Customers love buying things from someone who can easily talk about the product and services. You can show them your area of expertise by speaking and writing to them.
Have already suggested your blogging and social marketing. Publish blogs regularly, talk to customers using social media channels.
#15. Validate your plan and start slow
Generally, the excitement you feel while starting something does not last longer —turn that excitement into anxiety about if you have made the right decision. You get a lot of questions to ask and think about. So, why not start your business after validating your ideas properly.
It is better to start to slow rather than considering shutting your business down after two or three years of its opening —take a cautious approach. Get things right before rolling them into your products and services.
Most startups do not succeed. The fact may be unsettling but can’t be denied. In other words, it may be an intimidating task for bright-eyed entrepreneurs, but it is old news to today’s startup veterans.
If you are starting a business, then don’t start with the pros part. Begin exploring why startups fail. If you focus on the lacking part, you may stay in your business for longer.
One of the biggest reasons for startup failure is that the founders and investors neglect business prophecies. Most importantly, they don’t pay any attention to the business plan — maybe the base assumption of the plan could be wrong.
In short, instead of predicting the future, why not create a future with your customers?