A startup is a business that has the intention to not only grow but grow quickly and disrupt the market. This is one of the main differences between a startup and a small business. Images that most of us conjure up about startups is that they start small with a few people with a great idea, working from a garage with very limited funding. Some of the most famous businesses actually did start like that. You, too, might have the same intention, but great ideas are never enough. Even if you have a higher education, textbooks and lectures can only prepare you so much for running a startup.
So, let’s get into it right away and give you a brief on 7 very important factors to put into consideration before launching a startup.
1. Know The Industry
Sure it’s important to do what you like, but passion is just a part of the formula. You need to understand the industry of startups and the industry your startup is involved in. Who are your major competitors? Who are the key players? Learn everything you can about the industry.
The first reason why startups fail is that the market was not read well. They’ve delivered a product or service that the market does not need or is not interested in. The second biggest reason, and in many cases, the first, is insufficient capital. Many entrepreneurs use capital from their own pocket to start, which is very difficult to do. The ideal scenario would be to find investors or angel investors, but not many investors are willing to take the risk on a completely new startup. Very few startups are able to gain venture capital. You need advice, and you need to use practical methods by managing and closing capital-raising transactions to help you raise capital. This will get your startup working faster and achieve quicker results. It allows you to start your business feeling more secure.
Due to their very nature, small in size and number, startups are flexible and are supposed to be able to go with the wave and adapt to sudden changes. Unlike a corporate company with hundreds of employees, regulations, rules, and red tape here and there, a startup has to be flexible, which means you have to be ready to move with changes.
4. Assessing Risk
Worldwide, startups are known to come with a whole set of risks and can shut down extremely quickly if you haven’t assessed the risks beforehand. It’s not a myth that 90% of startups fail, 10% fail in their first year, and the failure rate of the bulk of them is between the 2nd and 5th year of their launch. This is not to burst anyone’s bubble, but risks come with the territory, and it’s your responsibility to assess risks by identifying them, knowing their consequences, and finding solutions for them. You will not be able to completely eliminate every risk, but a risk assessment will help you minimize them. At the end of the day, if you want to run a startup, by nature, you are a risk-taker and can do this!
5. Activity V Growth
You might be extremely active in the startup. You might have new employees joining or have moved the business to a bigger place. But are your activities translating into growth and more money? If your clientele isn’t increasing, and neither is the money, then you are just being active but not growing. Any activities you do should be stepping stones to financial growth.
Lots of first-time entrepreneurs think they can do it all by themselves. They are the CEO, the financial, PR, and marketing team all in one. They either think they can or just don’t have the funding to pay others for delegated work. You cannot do everything by yourself. You will fail and burn out very early on. When you’re not good at certain tasks, and things feel chaotic, you need to consider outsourcing to increase your chances of surviving.
Everyone wants to know who they are dealing with. You can’t and shouldn’t hide from your customers and clients. Get yourself out there and learn about your customers and let them learn about you. Respond to their questions promptly, provide solutions, and give them content. Make sure your content is regularly updated on social media platforms.
A startup is not the conventional 9-5 job. While it has lots of allure to it and seems like a happy place to work in, it’s a lot of work, devotion, time, and not all fun and games. Most startup owners work excessive and ungodly hours to keep their businesses moving. Yet, the satisfaction of owning a successful startup outweighs the struggles.