Startups are all the rage these days; there is no shortage of exciting ideas and talented entrepreneurs from tech companies to recycling solutions. However, creating a successful startup involves far more than merely coming up with an idea. The execution, people you surround yourself with, and your marketing ability will all have a say in whether it will have a positive outcome or not. In this post, we cover 7 things that can contribute to a startup's success.
Although in the introduction, it was mentioned that it takes more than an idea, the fact remains that you still need a great idea to act as the seed or nucleus for everything else to form around to help ensure a startup's success. Your concept doesn't need to be 100% unique, but it must provide a service that people need or improve on something that already exists. A fantastic example of this is Uber. Taxi's already existed when the idea was conceived, but Uber improved upon it by personalizing it to be easier and less expensive to get to where you need to go. There are numerous examples of startups improving on traditional methods of doing things, but your idea must be better and benefit the user to succeed.
Setting up a new business is not as simple as buying a product and then selling it. Many complex procedures are required by law to make your company legal. Before starting, you must consider the legal structure you want to set up. The most common for small businesses is a Limited Liability Company or LLC. LLC formation can involve many steps, but fortunately, specialized companies can aid you through the process. This is advisable to don't make a mistake that might come back to haunt your growing business later. LLC essentially means that your business is liable for any debt repayment rather than you as an individual. It also allows you to pay tax via the income you earn from the company. This is essential groundwork for a startup's success.
Throughout your lifetime, there are only two things that are certain: death and taxes. You can't cheat the taxman, and any attempt to do so will result in a spectacular fail. Therefore, it is crucial to understand the tax system, what you owe, and how you will pay for it. If in doubt, you can hire chartered accountants to guide you through the process, and if they are beneficial, you might want to consider adding them as a permanent business expense. Filing your taxes can be complicated, so having an accountant on hand could be money well spent. Furthermore, the outstanding ones will advise on areas to save money from the creative use of deductibles. This might come in charitable donations to understand what you can classify as a business expense.
People are often influenced by those who surround them. Therefore, unless you plan on remaining a one-person operation, you should consider hiring skilled employees to help you to move the company forwards. Your main job is to be visionary, lead the company to new highs, and get the most out of your team. If you look at Microsoft, Amazon, Facebook, and Apple, if you were to name the prominent people, most would know who to say. This is because they had the ideas and led their various companies to success. Moreover, you must develop adequate delegation skills. This means that you should know when you need to do a job yourself or delegate the task to a team member who is better suited to it.
Cash flow is the lifeblood of any startup. If you don't have enough initial funding, your business may never get off the ground. You will have already noted your expected cost forecasts in your business plan and should look for funding accordingly. While you shouldn't give up too much equity at this point, you should be prepared to give enough away that it makes investing in your business worthwhile. Furthermore, don't be afraid to give away large chunks of equity to investors that you believe have the ability to lift the startup off the ground and can introduce you to the right people.
The best idea in the world and the best setup will not sell if no one knows about it. Therefore, a large portion of your seed funding should go into marketing. You can delegate this task to marketing experts in your team, but this area will require your close attention. In today's world, digital marketing is going to be key to your startup's success.
Finally, you should have a plan to grow your business as it begins to expand. You don't want to be in a situation where you are rapidly gaining customers but can't scale up to match their needs. This should all have been outlined in your business plan, and if everything has gone well up to this point, you can revisit your strategy and see what you must do to keep pace.
Most startups fail within the first year due to poor planning and lack of funding. Unfortunately, failures are more common than success stories. Nevertheless, with strict planning and a well-laid-out strategy of financing and marketing, there is no reason why you cannot succeed.