Do you dream about growing a small business into a billion-dollar unicorn?
I know someone who dropped out of university to start a logging transportation startup. He recently sold the company for $5 billion and is a multimillionaire at age 27.
This could be you. This article will teach you about startup financing, how to start a business, and startup funding.
Read on to find out how to start a startup in seven easy steps.
How to Start a Startup
The first word of advice is: don’t be afraid to fail. If your business fails, treat it as a learning opportunity and fail forward.
1. Market Research
You first need to determine if there’s a demand for whatever service you want to provide.
Is there a service that everyone needs that is currently exorbitantly expensive, but you plan to offer cheaper?
Did you invent or patent a new technology?
Do you have an idea for an app that you don’t think anyone has thought of?
2. Create a Business Plan
A business plan can double your chances of success.
2,877 people participated in the survey linked above. These people had completed a plan.
- 297 of them (36%) secured a loan
- 280 of them (36%) secured investment capital
- 499 of them (64%) had grown their business
1,556 of the 2,877 did not make a plan.
- 222 of them (18%) secured a loan
- 219 of them (18%) secured investment capital
- 501 of them (43%) had grown their business
The business plan should be a guideline for the early years of your startup. It should reflect your business philosophy, the results from your market research, general milestones you hope to achieve, and have a detailed market.
This is also the best way to secure investment capital, as evidenced by the survey results above.
3. Secure Funding
Because the funding you need depends on what industry you are in, you will have to be prudent. Startup funding is a tricky matter.
If you are developing an app, maybe you need next to no funding. If you are starting a food truck chain, you may need funding to cover the basic vehicles and cookware you use.
Ventures can cost anywhere from the thousands to the millions. It all depends on how ambitious you are and how you present your ideas to potential investors.
Another option is to secure a loan. You can look into finding an SBA lender or someone who is accredited to lend to small businesses.
You can consider getting funds from:
- Friends and family
- Angel investors
- Venture capitalists
- Bank loans
4. Your Team Matters
Find yourself a team. Surround yourself with like-minded people, who share your ambitions, can serve as your checks, and who have something to contribute.
It takes a lot of grit to raise a startup.
This might be where you have to rely on your network. Know any lawyers, accountants, or bankers? Look for their advice. Better yet, if you know people who are also entrepreneurs, you can consult with them for advice.
5. Comply With Legality
Find out what legal steps you need to take to make sure your business complies with the law. Successful startups are always compliant with legality.
6. Location, Location, Location
If your startup relies on a physical brick-and-mortar location, you will want to spend quite some time looking at this.
Ideally, you will know the city that you are starting in well. You’ll know which neighborhoods attract the crowds you want. You’ll know if this street is busy or dead at peak business hours.
Of course, the ideal location to rent may not be within your budget, so you need to be judicious.
If your business is primarily a website or an app, you should at least have a dedicated office space to convene with your team members and engineers.
7. Build Your Marketing Plan
You will need a marketing plan. How do you plan to outreach to your customers?
Will you rely on word of mouth, google analytics, or social media?
Ensure you have some way of keeping track of metrics to make sure your marketing strategy is working for you.
This is just the beginning. Go forth with your new ideas! How to start a startup is just the easy part.
Now you have to maintain your business.
You can also check our business or tech sections to read more about startup environments.