If you’ve never started a business, the first time can be a little scary. Especially because it takes a lot of hard work and planning. On top of this, only about half of all businesses survive five years or longer.
Luckily, there are 9 basic strategies for startups you can follow to help get your company up and running:
1. Start with a Great Idea
Your first step in learning how to start a business is to identify a problem and solution. This is because successful startups begin from business ideas that fill the needs of a group of customers. But your idea doesn’t always have to be a new one. You can update existing products or services in a way that’s better for the consumer. This can be as simple as:
- Changing the product’s appearance
- Adding a new feature
- Finding a new use for a product that customers already love
For instance, Apple started from Steve Jobs’ original idea for a computer and has since created enhanced versions that better fit the market. They’ve also continued to evolve newer products like iPhones and iPads, making them more useful with each update. One example is how they’re adding a keyboard for iPads that’ll make them easier to use like a laptop.2 All these innovations by Apple led to them being worth of over a billion dollars.
2. Make a Business Plan
Once you have an idea, you’ll want to start building a business plan that describes your products and services in detail. It should include information on your industry, operations, finances and a market analysis.
Writing a business plan is also important for getting financing for your startup. Banks are more likely to give loans to companies that can clearly explain how they’re going to use the money and why they need it.
3. Secure Funding for Your Startup
The cost of a startup is different for every business owner. However, no matter what your costs are, you’ll likely need to get startup financing from:
- Friends and family
- Angel investors
- Venture capitalists
- Bank loans
You can also apply for a business credit card. Many companies offer 0% APR promotions, which means you won’t pay interest on your purchases if you pay off the balance before the end of the offer period. We’ve partnered with Fundera, which put together a list of the top credit cards offering 0% interest rates.
If you don’t get the right amount of funding or can’t raise money for your business, you’ll risk not being able to pay your operating costs. This may cause you to close your doors. In fact, it’s estimated that 29% of startups fail because they run out of money.
To make sure you get the right amount, you’ll want to estimate your costs and cash flow, including the interest rates on your loans. Once you do that, you can use QuickBooks or FreshBooks to track your expenses and help you stick to a budget.
4. Surround Yourself With the Right People
There can be a lot of risk in starting a business. That’s why you’ll need essential business advisors to help guide you along the way, like:
- Certified Public Accountants (CPAs)
- Insurance professionals
Building the right startup team is especially important in the early stages of small businesses. This means you’ll want to carefully select your:
- Initial employees, including remote workers
5. Make Sure You’re Following All the Legal Steps
From designing your product to setting up your workplace, opening your dream startup can be a lot of fun. But before you officially enter the market, you’ll want to take the right legal steps to give you the best chance at success, including:
- Applying for a business license
- Registering your business name
- Getting a federal tax ID number
- Filing for a trademark
- Creating a separate bank account
- Familiarizing yourself with industry regulations
- Building contracts for clients and others you plan to work with
6. Establish a Location (Physical and Online)
how to start a startupWhether you need to establish a manufacturing facility, set up an office space or open a storefront, you’ll want to determine if leasing or buying a property is right for you. In many cases, you can get tax deductions for managing a commercial space, which is a benefit to owning your own place. You’ll also be able to rent it out to make extra income.
However, one reason startups lease in the beginning is so they can invest their money into other aspects of the company. Leasing can also be a cheaper way to get your startup in a prime location. Keep in mind that rent prices can spike unexpectedly, which can force you to spend more or move. You also won’t build any equity while you lease.
In today’s digital era, it’s important to set up an online presence and e-commerce platform. In fact, you’ll have trouble being successful without it. This is because customers are increasingly shopping online and using google to find out more information on your products. On top of this, websites offer advantages like:
- Keeping your store open 24 hours a day, on weekends and on holidays, which increases sales.
- Helping you reach customers around the world.
- Allowing customers to read reviews about your products, which can raise your brand’s credibility.
You can enhance your online presence even more by starting a blog. This can help you establish yourself as an expert in your field. You can also use search engine optimization (SEO) to increase your brand’s visibility on Google searches. And it’s always a good idea to post on social media platforms, where your audience visits frequently.
7. Develop a Marketing Plan
Every startup needs to spend different amounts of money and time on marketing. It’s an important expense, because it helps you:
- Establish a brand identity
- Stand out from competition
- Create customer relationships and build loyalty
- Increase visibility, which attracts new customers
- Strengthen your company’s reputation
Some startup marketing activities you should look into include:
- Using social media to engage customers and promote coupons or deals
- Giving rewards out for referrals, which brings in more business
- Offering free samples or demos in your store
- Sponsoring events to get your name out there in local communities
8. Build a Customer Base
In order for your startup business to have long-term success, you’ll want to build a customer base. These loyal customers can help with:
- Boosting your sales, because they’re willing to keep spending at your company
- Sending a message to new customers that your brand is trustworthy
- Gaining referrals, which saves you time and effort with finding new customers
Some ways you can attract and retain customers include:
- Regularly offering a great product or service
- Launching loyalty programs to keep them coming in
- Using affiliate marketing on social media, which involves paying influencers to promote products to your target audience
- Focusing on great customer service
- Using market research to understand your customers’ expectations better
- Asking for feedback directly from the customer
- On top of this, the International Council of Shopping Centers (ICSC) found that 92% of consumers said their loyalty to specific retailers was because they offered prices that were fair and matched the value of their product, while 79% said it was because of product quality.
9. Plan to Change
Startups change drastically within their first few years in operation. A key to success is to evolve and adapt your business model to your market and industry.
Some strategies to make sure you’re prepared to adapt are:
- Hiring forward thinkers so you know your team is adaptable
- Listening to feedback from customers, suppliers and others that you work with
- Staying updated on trends in your industry
Remember, it’s businesses that are willing to evolve with consumer expectations that are able to establish themselves for years to come.
source: the hartford