Every entrepreneurial adventure begins with a good idea, evolves with several incredible ideas, and hopefully ends up becoming a successful company.
But, how can you go from your first idea to success? There is no easy answer to this question. Being an entrepreneur is challenging, requires knowledge, innovation, skills and inspiration.
And even if entrepreneurship and self-employment are a reasonable choice after the Covid-19 crisis, surviving in the market is not easy at all. That’s why we give you 10 simple steps to make you move forward and start your own business with the right foot.
But first off let’s define what a successful startup is. A successful startup is a young business with scalable potential and has chances in the current market conditions after researching the market in depth. Another great feature of startups is that they relate to technology niches and eCommerce because doing business online is the natural setting to grow and seek business opportunities today.
And at PUNCHY, we’d be happy to help you take your first steps as an entrepreneur - Startup from scratch!
1. Define the start up business plan
Without a good idea, it’s very difficult to start any business, particularly, a startup. In fact, defining the business idea is the main step towards success, as well as one of the most difficult tasks to develop.
Turning an idea into a reality requires clear strategies such as the sales channel of the product and who will buy it. And you will have to answers questions like:
- What is the product or service I’m going to sell?
- How is it different from other products from competitors?
- Who will buy the product or service I’m offering to the market?
- Why will they buy the product or service?
- Who are my competitors?
- Who is my ideal buyer and which is my target audience?
- To name a few, the list goes on...
So, you must define and describe the essence of your business to make sure it will add value to your target market.
2. Do a market research
Are you the first with this idea? Did you do your research online, talk to experts, and seek mentors?
You may have a great business idea but without research... it might fail. A relevant market study will give you data, quantitative and qualitative, to make decisions and evaluate the real needs of the market and get into the heads of your potential clients.
You’ll also have to define the size of the market, their buying patterns, their demographics and many other variables that will make the difference for your business. At the end of an in-depth market study, you’ll know what you have and what you are up against. That’s why it’s much better to be clear about your goals and possibilities before trying to scale.
3. Define your value proposition
Another great step to success and building the foundations of your startup is the value proposition. And if you wonder what it is, in plain English the value proposition is the key differentiator that makes you stand out from the other million businesses in the same industry. From the point of view of the customer, it is what makes them choose your product or service over another.
In most cases, the value proposition marks the whole business strategy of your startup and it is basically a matter of putting yourself in the shoes of your customers to create a solution that meets their needs
4. Define your customer segment
You have to offer your product to the right people and get a defined niche.If you don’t choose a particular niche with a specific audience you won’t sell well and you’ll end up spending a lot of money on advertisements with little results.
Your product or service is special and it can change lives... if they are available to the right people. One of the great problems that many companies suffer is not the product itself but the choice of their buyer persona.
The buyer persona is the representation of your ideal client and it helps you humanize your abstract target audience. Ask yourself the following questions:
- What social network do my customers use?
- What do they do for a living?
- Where do they look for information?
- Where do they live?
- How old are they?
These are the kinds of questions you must ask to define your buyer persona and offer really specific products and services for their needs.
Isn’t it clear enough?
No problem. Get more information about defining your buyer persona here.
It’s fundamental that you don’t treat your customers like cold numbers in your financial statements. They are humans, with needs and desires, and now your goal is making their lives easier!
5. Build your brand
Every startup website needs to build its brand. Startups, as small businesses compete with established competitors, big brands (and not so big), but ultimately the fight is between brands.
What makes you different in the mind of your customers is the symbolism that represents your brand… your business identity!
How much should you talk about your own brand? You should deepen into your brand history and explain your broader vision to your prospects. Your future customers will get an idea of what your brand is like, what you offer and they will know why you are special. This may touch their hearts and they may feel empathy with your ideas. So, it’s not an easy task but it's worth it.
6. Build an optimal team
If you’re with the right people, your business will grow. In fact, startups require great dedication and knowledge to be able to provide effective solutions in real-time and anticipate possible problems. So, you’ll need to get the right people for the right areas.
People with confidence, a desire to work and faithful to the business ideas are necessary to create a solid, united group.
Now, it’s your turn to engage them and make them loyal to your startup. Show them your passion and remind them how important they are and how much they can grow professionally with you. Even, you can offer shares of your startup to your team members, so they will feel they also own a bit of the business.
7. Develop your Minimum Viable Product (MVP)
Your MVP is the first sample of your product, but with enough features to satisfy initial customers, and provide feedback for future development. It is viable because it sells, and your target audience already loves it. That is, you have to gain knowledge from the market itself with an empirical test through the launch of your product.
It is usually the first project of a startup, and from this MVP, you’ll determine costs and suitability. Indeed, learning from an MVP is less expensive than developing a product with more features, but it increases costs and risks if the product fails.
Following this, according to Forbes more than 70% of startups fail because they try to scale too soon. That’s the importance of the MVP for getting your first feedback and knowing your customers’ tastes in real life.
8. Validate your start up business model
Now the world is changing, the competition is increasing and the customers are more demanding. In consequence, it’s essential to analyze for whom we are creating value and one of the fundamental steps before launching a business is to validate your business ideas.
If you don’t do this step, you run the risk of building your business on false expectations. The key here is to validate your assumptions and confirm if they really work as expected.
It means optimizing your business, collecting the impressions of your first customers and team members to evaluate what you can improve.
9. Determine your financing needs
Startups by definition are small companies with an idea and passion. But to develop your ideas you need resources… urgently!.
Financing a small business, especially startups, is a difficult task... but not impossible. Just include a realistic and convincing projection in your financial plan, as well as costs and future earnings. Take a look at this article to convince more investors here.
In addition, we show you some tips to get financing:
- Seed Funding: It’s the initial financing of any business project, based on the trust and knowledge of the entrepreneurs. It usually comes from relatives and close surroundings.
- Business Angel: They are private investors and it’s subsequent financing as a result of the business’s start. And based on a study of your startup profitability, you’ll need to show your investor good cover letters and pitch decks.
- Bank loans or credits: Obviously we cannot forget the banks. To get a loan you must have a very viable business plan with positive results. That way, you’ll find financing after an assessment, and if the bank considers your business a profitable prospect, you’ll receive some funding.
- Crowdfunding: Possibly one of the most effective financing tools for startups as it works on donations. Users are the ones who donate capital for your project, and if it offers solutions to their needs, it is definitely a market full of opportunities with more than $17.2 billion invested yearly through crowdfunding in North America (Fundera, 2020).
- Venture Capital: (VC) firms can provide capital; strategic assistance; intros to potential customers, partners, and even employees. VCs typically want to invest in startups that are pursuing big opportunities with high growth potential, which have already shown traction. A must for a startup is a strong “elevator pitch” and investor pitch deck to attract the interest of a VC.
Just remember to negotiate smart and don’t lose all the shares of your startups or you’ll lose the drive to make your business grow in the long-term… And manage expectations and don’t take excessive risks because about 75% of the startups financed by venture capitalists go out of business (Websitebuilder, 2020).
10. Networking with key partners
Networking is a key resource to promote the development of a company and it is critical for startups! Indeed, it is vital for getting new opportunities and meeting other professionals to keep your business fresh with new ideas. Conferences, professional events, training, and LinkedIn are good ways to increase your network. Increase your network and get visibility using the method that best suits you.
TAKE IT EASY!
Knowing the mechanisms for positioning, you will make yourself much more visible on social networks and the Internet. This will allow you to go to the market with all the artillery possible and for your product to become visible in the shortest time possible. You can directly attract more financing so that the initial model grows progressively in a short time.
Creating your startup from scratch is probably the project of your life, with serenity, patience and professionalism you’ll see your dreams come true. The process of creating your business will depend on how you manage to finance it. If you are going to depend on investors, you will have to inform them of every movement you make, and even if the bank gives you a loan or capital, you should keep in mind to return them with an extra percentage of interest.
Finally, remember to be different, have a good value proposition, go through a validation phase without incurring great costs, design a good business model, and estimating an economic and financial viability plan to be really successful.
If you’re not sure about how to implement these 10 steps… or you think it sounds too good to be true. Don’t panic! PUNCHY has your back and we’ll help you make your dreams come true and get your business running successfully!