Everyone has some great ideas for the next big thing. What makes successful business founders unique is they are clear on how to start a startup. They are willing to take action so that at least one of their startup ideas becomes a reality.
A significant part of execution is simply getting your startup started. But once you have done this, it is advisable to have a checklist of steps to follow to ensure everything is in order.
How to Start a Startup in 8 Simple Steps
The simplest and practical way to become a successful entrepreneur is to know how to start a startup. And to be successful, you need competent people, a business idea that can solve a particular problem, and an adequate amount of money. Most startups that fail in at least one of these three areas do not eventually see the light of the day.
There are no magical steps required to start successful startups. With these eight steps, you are good to know how to start a startup and succeed.
1. Do In-depth Market Research
Begin by conducting market research to establish if you indeed have an idea worth pursuing. Put down the problem that you consider your business idea would solve and figure out the number of people who are having that problem. Go and talk to them and, if possible, record a survey for these potential clients to understand what they need. Test the idea. Six percent of startups fail within the first three years of business due to failure to test their ideas at this stage.
Use the outcome of your survey and tests to decide on your next step of action. If you find out that most people consider your idea a great solution to their problems, work on ways of solving that problem in the best way possible. Also keep your research material securely as you can use them later to secure funding.
2. Secure Intellectual Property
Securing intellectual property involves owning the rights to create a product. It is important to the success of your company that you protect your differentiating factor and do so by following the right protocol.
If you protect yourself early enough, you will protect your business against copycats. Otherwise, you could be the copycat and face serious legal ramification. Once you are sure you are on the safe side of the law, apply for your copyright or trademark or file your patent. After your company is incorporated and you have command of the intellectual property, transfer it to your company’s ownership.
3. Decide on Branding
Branding is more about deciding on an identity for your idea than simply picking an appealing name. While you need to choose a name that you cherish, the right name should also convey the experience of making use of your product and the specific problems that it solves.
Be well informed of any existing product failures or successes that are associated with the name that you prefer and how these issues may affect adoption. This is the stage at which you should secure your website domain name and related marketing materials. Craft and internalize your elevator pitch as well to help you understand what you may tell those who will ask what you startup offers.
Incorporation will help you to make your business a legal entity and decide how it will be structured. Most startups are incorporated as an LLC, an S corporation, or a C corporation. A C corporation is a taxable entity while an S corporation and LLC have special tax exemptions.
Besides the tax differences, there are many other factors that you need to consider when incorporating. Equity compensation, for example, can be easy or difficult depending on the business structure you choose. Also, you have to choose where you want to incorporate given that different states have different ways of regulating and taxing startups.
5. Choose Business Partners
Your execution can die because you lack the proper support. Some investors consider having a great founding team so critical that they look for them before looking for the best idea whenever considering making an investment. If you do not have a co-founder already, this is still a good time to bring someone into the fold.
6. Write a Comprehensive Business Plan
Some people think you should start by writing a business plan. This is not ideal. It is great to rely on the business research you conducted earlier and the support of you business partners to create a plan of attack, determine your business goals, and the steps that you need to take.
7. Find a Mentor
If you have a good mentor, the chances are that you will be very successful within a short time. But this is a very sensitive subject. So start by establishing if having a mentor is good for you. And if so go ahead and find the right one. A good mentor can provide deep industry insight to assist you to navigate some thorny issues that will come your way from time-to-time.
8. Assess Your Finances
Some small business owners put their own money into their startups. But it is possible that irrespective of how much you understand how to start a startup, you will need financial support. You can take a commercial loan. If you are unable, apply for a small business loan via the Small Business Administration or an alternative lender. If you need a lot more funding up front, consider an investor or launch an equity crowdfunding campaign.
This how-to-start-a-startup list is not exhaustive, but it is a great place to start. The complete list that you will need will most likely depend on your unique situations. Nevertheless, an informed person cannot ignore the principles covered here. You have to do adequate research, ensure your business idea is safe, bring the right team into your fold, and raise adequate capital on time. Many people who know how to start a startup consider different factors fit for guiding others on this issue. If you have inside knowledge of this topic, you can leave your comments below to help others.
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