Starting your own business someday is a dream many working professionals carry in their lives. With so much focus on the wealth creation and storied lives of successful start-up founders, one is bound to get carried away. Despite being a very lucrative option to pursue, starting something of your own from scratch is a risky proposition, nonetheless. Some studies even point out to a glaring fact that out of every 10 businesses which start, 9 are bound to shut down in 3-5 years. This essentially means that the success ratio of a start-up is very minimal.
You may now ask, what to do in order to maximize the possibilities of success?
Although there are sure shot mantras or ‘golden rules to success’, you definitely would need to keep the following 7 things in mind before planning your new start-up.
If not you, then no one else will. It is very important to back your own ideas and be passionate about bringing those ideas to life.
2. Bring Trusted Partners On Board
You can only do so much alone. You will need to find friends, family, and colleagues who are convinced in your start-up idea. A trustworthy person will not just listen and appreciate your points but will also act as a critique in areas that need to be refined and fleshed out further. You may also want to bring some of these trusted partners as a part of your start-up in the role of co-founders or early employees.
3. Understand the market thoroughly
Once you have the idea and initial people on board, it is important to validate your hypothesis with a thorough understanding of the market – who is the customer, how big is the market, how are their needs being met currently, how will your idea solve the customer problem better, what could be the possible disruptions, etc. In-depth market research will further build confidence in your idea.
4. Prepare a concrete business plan
Having an idea is great but success will always depend on the right execution. Prepare a business plan which will help you with the actual nitty-gritty even before you start running a business. Aspects such as mission & vision, market analysis, core competencies, financial analysis, expense projections, marketing plans, customer acquisition costs, etc. will need to fleshed out in detail upfront to give you a sense of whether pursuing this idea even makes sense or not. It is advisable to spend a lot of time to detail out the business plan.
5. Arrange for funding
Based on the estimations and projections of your business plan, you will require seed capital for your business. This capital will be required for setting up an office, supporting infrastructure, hiring people, legal & government compliance, etc.
You can either fund this expenditure in the following ways– own savings, funding from friends & family or external agencies such as banks, angel investors or venture capitalists.
6. Decide between ‘Starting small’ or ‘scaling hypergrowth’
With many popular instances of start-ups pursuing hyper-growth strategies for acquiring customers and generating revenues, one may contemplate on which strategies to pursue. Keep in mind that hyper-growth comes at the cost of rapid cash burns and negative bottom lines (net income or profits). If you have not secured enough funding to sail through this hyper-growth period, it may be wise to follow a ‘start small’ strategy where the goals and ambitions are realistic and aligned to your capabilities.
7. Sort out the legal processes and registration formalities
Before starting your business, you will need to get the company name registered, protect your intellectual properties (IP) through trademarks and copyrights among other legal processes. Once the registration and legal processes are completed, you can run your business legally.
You may find these steps to be cumbersome but believe us, each step is meant to create a strong platform for your business to start and flourish. The more you invest time in following these steps, the better would be the chance of you succeeding.