A survey conducted by the University of Phoenix has highlighted that 63% of the people who are in their 20’s want to start a business or already own a business. This has resulted in a large number of startups burgeoning in today’s world.
According to NASSCOM’s annual startup report, USA with 52,000 startups in one year has topped in the startup ecosystem in the world, followed by UK and India with 4900 and 4700 startups. The number of startups in India has increased from 3,100 in 2014 to 4,750 currently that are employing more than 85,000 employees.
However, the disheartening fact is that out of every 100 startups, 90 of them fail, 3 startups perform lower than average, 4 startups are average performers and only 3 of them succeed. Also, a little more than 50% of small businesses fail in the first four years. A report from 2011 has highlighted that out of all the businesses, only 4% of them make it to the 2nd year and 3% make it to the 3rd year. Various factors contribute to these failure rates including incompetence, lack of managerial experience, or so on and so forth. And for these reasons, after some great deal of research, we have
And for these reasons, after some great deal of research, me and Lokesh Tanwar, CEO of Business Alligators have decoded some effective tactics to ensure the success of a startup business. We have covered each step of starting a business in the right sequence in the simplest way possible. Following these basics steps, just the way they have been enlisted can assist a prospective entrepreneur to reach the zenith of success.
Step 1: Self Belief
While starting a business as an entrepreneur, you might feel that having a unique idea that entices your audience is the first and the most important step for a successful business. However, without a sense of self-belief that you will be able to sail through even in times of adversities or even with a mundane idea, your entire effort might go in drain. Hence, it is, without a doubt, true that Self-Belief is the first most important step to start a business.
Unless you are convinced with your product or your business idea, you will find yourself incapable to perform to the best of your ability. One needs to have a firm belief that there are no such things that others can do but you cannot. In the words of Ben Roulston, founder at BRG-Learning and Development, “You need to be your number one fan”. So the first thing to do when you plan to start a business is to believe in yourself because you cannot ask anyone else to believe in your idea or vision if you are not prepared to back yourself.
Step 2: Idea Development
An idea is crucial to ignite the spark for a successful startup. And for a robust business idea, the best practice is to identify the problems that are existing in the market and create your business that revolves around finding solutions. Hence, ‘Problem Identification’ becomes the first thing to do followed by creating a business plan and customer acquisition strategies while developing an idea for the business. Once that is done, analyze your competitors and deliver a solution to the world that is better than the ones that are already there in the market.
At times, even after creating a viable business solution, entrepreneurs realize that there are certain loopholes that are deterring them from moving ahead. And so, conduct surveys and understand what people actually think of your product or services. Accordingly, you can always bring modifications to your business idea to ensure that it is more sustainable than before.
Step 3: Prototype Building
So, you have a unique business idea to start with, but what is it that you can offer to your customers or investors at a preliminary stage to bring in some more credibility into your business? It has to be a Prototype. Having a physical form of your final product in hand gives you the platform to understand any loopholes at an early stage for you to improve upon. In simple terms, a prototype is a functional replica of your end product that you develop at an early stage of your business.
You can always approach investors with a prototype to seek investment or to customers for advanced sales, although seeking funding is too early at this stage. For service-oriented businesses, credibility comes in with having a robust team and/or business deals that you have been able to crack so far. Building prototype(s) bring in a large number of advantages into your business, the details of which are discussed in subsequent sections.
Step 4- Legal and Location
It is of utmost importance for businesses to comply with all legal formalities for the smooth execution of a business. Considering your business size, structure, location and several other factors, every aspect of legalities need to be adhered to. Right from gaining licensing, to the registration of your company, to signing founders’ agreement and/or agreements with outside parties wherever applicable, every aspect of the law is a must. If you are planning to start a business in India then you can Click Here for legal related details.
Choosing the right location is equally important as it determines the success of a business. You would definitely not want to run the risk of getting bankrupt just by paying the rents for your office or paying bills for amenities at this stage even before your business has taken shape. And for this, several factors need to be taken into account to ensure that your business is set up in a favorable location and attracts a large number of customers.
Step 5- Team Building
The next crucial aspect to be taken into account while starting a business is to have a well-efficient team within your company. A team that can strive to work cohesively and creates strategies to gear up your business in the right direction. Different teams can work on different key areas of your business, whether it is marketing, or sales, or handling financing.
A successful entrepreneur and a guest lecturer at the Kellogg School of Management, Daniel J. Weinfurter has mentioned that it is not your product or service, but team building that is detrimental to scale your business and serve the customers. Lack of discipline and rigor in a team impedes your ability, as an entrepreneur to grow. So always choose your team wisely and also learn how to bring productivity to a startup team.
Step 6- Find a Mentor
Journey as an entrepreneur is never as easy as it looks like. And for those reasons, proper guidance from an industry expert or a well-established entrepreneur is widely recommended. With tonnes of experience from his personal accounts of running a business, a good mentor can add significant value to your business. If you won’t get a mentor at this stage then you will surely be going to face some critical problems like financial crunch, product underperformance, team disputes, etc.
Having said that, there are several approaches to deal with a mentor to lead the way to a successful mentor-mentee relationship. Being smart in approaching a mentor, or seeking his assistance and knowing what exactly to expect or not expect from your mentor is a must to ensure that every bit of useful information is extracted out of them in the most efficient ways.
Step 7- Raise Initial Funding
So, by this stage, all the efforts of setting up a business have taken shape. However, one essential aspect that is needed to turn all these efforts worthwhile and into reality is ‘funding’. Fortunately, today’s startup ecosystem boasts plenty of financing options to entrepreneurs. These may include crowd-funding, bootstrapping, seed funding or a combination of multiple finance options.
In the subsequent sections, we have discussed all these funding options in detail and also highlighted that why bootstrapping is the most preferred option for seeking investment. One also needs to take into consideration the right tactics to approach investors so that maximum utilization of the funds is done for a remarkable success.
Step 8- Capture Market
This is the stage where all the efforts that have gone previously into creating your business come together and expect some kind of returns from the target audiences. Unless your business is not able to capture the right audience, your business cannot reach its initial targets, let alone taking them to new milestones of success. So make proper plans and strategies to capture a greater portion of the market with limited funds.
To begin with, incorporating the right kinds of marketing and branding strategies to make sure your brand is well visible in the market is extremely crucial. And of course, the role of a fully efficient sales team cannot be undermined as well as it is the efforts of a sales team that drives all the sales for your business. At this stage, you need not to worry about a lot of profit. Only focus on capturing more and more client/ customers either with very minimal profits. And at last, you can conduct data analysis for your business to understand where your business lies and what aspects need to be worked upon.
Step 9- Scale Your Business
Startups are always under the closed eye of their competitors so it is extremely important for business owners to scale up their business so that they are ahead of their competitors. At this stage, you can consider expanding your funding sources or scale up your business operations by expanding geographically, taking into account various micro-environmental factors around your business model.
Also, at this stage, you should think of generating profits for your business because any sort of business expansion, be it in terms of location, or size of the team or facilities need the money and that can only come if your business is making profits. Moreover, you must also focus on retaining your customers to be able to bring in credibility into your brand. You must also focus on revising your marketing and branding strategies because a wider audience means more efforts to voice out your brand value.