By Selena Richard
Entrepreneurship has grown a lot in recent years, being an entrepreneur has become an option for self-employment or unleashing a business idea with possibilities for the future.
The entrepreneurship model via startup is one of the best known and most demanded . Many of them manage to survive and even be sold, it is also true that around 50% fail and disappear.
The success of a startup relies, above all, on strategy and prior planning. Let’s look at some tips to create a startup from scratch and minimize the main failures that can cause complex consequences for its continuity.
What is a startup?
A startup is a young company that is just beginning to develop. They are scalable businesses with great growth potential.
These new companies are usually small and initially, financed and developed by a founder or small group of them.
Another great characteristic of startups is that they are usually closely related to the technology sector , with new technologies, trending products to sell online, and the internet being the natural setting to grow and seek business opportunities and even financing.
Next, we will see what are the steps to create a startup from scratch as well as some tips to minimize the appearance of the most common errors that can lead to its extinction.
- Define the business idea
Without a good idea, it is very difficult to start a startup or any type of business. 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 business concept requires thinking about issues such as the sales channel of the product or service and who will buy it, the benefits of the product or service, etc
The entrepreneur will have to have an answer to several questions , including the following:
- What is the product or service?
- How is it different from other products?
- Who will buy the product or service?
- Why will they buy the product or service?
- Who are the competitors?
- What promotion/discount codes does it offer?
The entrepreneur must be able to accurately and clearly describe the essence of the business in order to have maximum security to continue with the next steps of creating the startup and not die trying.
- Conduct a market study
We have the idea but alone it will not develop or grow. Once the business model with its characteristics and qualities has been identified and defined, there is no other choice but to carry out a market study.
One of the main keys to a good business plan is the relevant market study. A market analysis is a quantitative and qualitative evaluation of the market, where the size of the market is analyzed both in volume and value, the different customer segments and purchasing patterns , the competition and other influential players in it.
At the end of an in-depth market study, we will know what we have and what we are up against, recognizing our values, strengths and being clear about our objective.
- Define the value proposition
Another of the great concepts that arise in the process of creating a startup is the so-called value proposition.
What is a value proposition? In simple words we can say that it is that key differentiating element that will make you better than the competition in the same sector.
From the point of view of the consumer or customer, it is what makes them decide to choose one product or service over another.
Within the business idea definition phase, the value proposition should be well underlined. To reliably identify this factor, the conditions of the market, the competition and the business idea must be taken into account.
In most cases, the value proposition marks the business strategy of a startup .
- Delineate your customer segment
The audience or the target audience, in short, to whom we are going to offer our product must be the correct one, otherwise no business strategy will be able to work.
One of the great problems that many companies suffer is not related to their product or service, but to the choice of their Buyer Persona.
The Buyers People are representations of your ideal clients. They help you define who this audience is that we want to attract and convert; and above all it helps us to humanize and understand this target audience in greater detail.
Create your own Buyer Persona. With the help of this template you will be able to develop your ideal client.
It is important not to get carried away only by a business plan or strategy and to take into account the type of audience we want to reach. Each product has its own customer segment or segments, and recognizing them requires careful market research.
With new technologies, consumer analysis has become much more exhaustive, facilitating interaction with them and obtaining more information about it.
- Build your brand
In other articles we have already commented on an issue as important as the brand . Every startup, like companies and professionals, need to build their business in parallel with a brand.
Startups, as small companies that they are, must compete in a difficult and highly fickle market. They compete with big brands and not so big ones, but ultimately the fight is between the brands.
The brand shows the identity of the company in its maximum expression, the more complete and transparent it is, the more notoriety it will have. Let’s not forget that a brand is defined by the general perception of a consumer or customer of your business.
The process of creating a brand requires study and reflection, in addition to a work policy and continuous visibility over time.
- Build an optimal team
As in any aspect of life, being lucky enough to be surrounded by the right people helps you grow and improve. In the context of startups, the same thing happens.
The management of a company, especially in its beginnings, requires great dedication and knowledge to be able to provide effective solutions in real time and anticipate possible problems.
People with confidence, desire to work and faithful to the business idea are necessary to create a solid, united group with a future.
- Develop your Minimum Viable Product
Minimum Viable Product? It is nothing more than the first sample, final service products to offer to future customers.
It is a concept closely related to new companies and to achieve it it is necessary to follow protocols to achieve said Minimum Viable Product with the best guarantees and in the shortest time.
It is usually classified as the first work project of a startup and from this Minimum Viable Product it will be possible to estimate its costs, time and suitability for the target audience.
- Validate the business model
One of the fundamental steps before launching a business model on the market is to correctly validate the different hypotheses on which it is based, since if we do not do so we run the risk of building our business on false ideas and perceptions.
The hypotheses on which the business model is based are those ideas or assumptions that we have not been able to confirm or that we are not sure that will really work as we expect … that is, practically everything, which implies that we must make an effort to validate these assumptions as soon as possible.
The objective is to design different experiments and tests to validate the best recruitment channels and the viability of the business model, which will possibly lead us to have to propose new changes or options in the model.
It is useful in this phase to use different Inbound marketing strategies to test the response of users to your product or service without being invasive.
- Determine your financing needs
As we have said previously in the definition of startups, they are small companies with an idea to develop and in urgent need of financing from their founders and partners.
Financing a small business, especially a new business, is difficult but not impossible.
The idea is clear: get money to start the business project. For this we can list a series of formulas:
- Seed Round: It is the so-called initial financing of any business project, based on the confidence and knowledge of the entrepreneurs. It usually comes from relatives and close surroundings.
- Business Angel: They are the so-called private investors, it is a subsequent financing as a result of the departure of the startup. It is based on a study of the first numbers of the business, these will be the best cover letter to achieve this type of investment.
- Bank loans or credits: Obviously we cannot forget about banks, to get a loan of this type you must have a very viable business plan with positive results.
- Crowdfunding: Possibly one of the most effective financing tools for startups. A form of collective financing via the internet, crowdfunding platforms offer space to add projects and their needs. Users are the ones who donate capital for the achievement of said projects.
- Network with key partners
Networking has long been considered a key resource to enhance the development of a company. For startups, networking becomes vital due to the great opportunities that can be obtained.
Networking defines the idea of having a space to meet other professionals and generate new contacts and business opportunities. There is no event worth its salt that does not have a place to facilitate networking.
Conferences, events, training any time is good for networking.
Ideal to make yourself known, attract investors or give visibility to your product, service or brand.
Creating your startup from scratch can be the project of your life, with serenity, patience and professionalism you will be able to see your wishes come true.
The author is a blogger and a guest contributor for a well-known brand that includes Mesheble, Saveucoupon & InTheMarket. In her leisure time, she loves to plays tennis.