What Is A Startup Business?
A startup business is a newly emerged, fast-growing entrepreneurial venture that is designed to meet a specific marketplace need by developing a practical business model based on services, innovative products, a process, or a platform.
In recent years, the terminology, “startup” has become very popular among millennial and young individuals with a strong business mindset. Startup businesses have evolved to be more of a cultural movement with an outlook that is a complete deviation from standard or traditional companies.
The modern day startup business offices are not like the typical offices where a certain dress code is mandatory and a formal setting is to be maintained. Startup founders are often seen wearing casual clothes to meetings; office spaces can look very casual with a very youthful and vibrant atmosphere.
What Is The Difference Between a Startup Business and a Small Business?
Sometimes when you hear the word “startup” being thrown around, many begin to imagine coders, software and app developers, and the likes.
There are so many misconceptions about how this term is being used to describe businesses, that it’s often assumed it can only be applied to tech companies. However, the reality is that a “startup business” does not necessarily mean that it is strictly technology-focused. Startup businesses and small businesses share a number of similarities, but there are a few differences that distinguish both ventures.
Growth
One major difference between startup businesses and traditional small businesses is the way growth is being conceptualized. Startup businesses are designed to grow really fast, that is, they typically tend to rely on technology in order to reach a larger market.
A specific instance of startups is how apps can go from having just a few users upon launch, to millions of users in a matter of a couple months; this is the typical format of many startups.
On the other hand, traditional small businesses are designed to scale up at a slower pace. They usually do not have access to financial support to grow fast and generate revenue like startup businesses, so the growth is more incremental.
Funding
The ways that startup businesses and small businesses seek funding can be quite different. While startup businesses often rely on direct funding from venture capitalists or angel investors, small businesses often have to rely on loans and grants. Generally, startup businesses tend to get more help from their investors as they are actively involved in the operations. However, small businesses will usually report to their banks with respect to their loans or grants.
How to Start a Business
There are a number of obvious reasons why more people are quitting their jobs and starting businesses. Firstly, many people do not get the satisfaction they expect from their jobs. Secondly, there is a shortage of jobs in the labour market – which drives many people to seek out opportunities by establishing their own businesses. Another reason is the fact that many individuals have ideas that provide solution to a specific market need.
While many have great business aspirations, they often do not have a clear picture of what starting and growing a business entails. Many will fail as a result of a lack of preparation or market research. Becoming an entrepreneur is not as easy as many want it to be. It requires hard work, time, and a lot of effort.
Here are a few tips for startups and guidelines that will help you to start your business and make it successful.
Brainstorming
This is one of the most important phases of starting a business. Every business opportunity starts with an idea. These ideas often come in the form of solutions to a problem or they must be able to fill a gap. Whatever your ideas may be, there are many ways by which you can turn them into a viable business.
The brainstorming phase should include extensive research into the field or industry you plan to set up your business. You must identify companies that are already providing a similar solution and think up ways you can offer your services differently at a better rate.
Develop a Business Plan
This stage requires you to go into more details about your business idea. This is the stage where your ideas begin to materialize. A business plan will show in clear terms whether your business will be profitable or not. Also, you need to answer questions like:
- Who are your customers?
- Target market and size?
- How will your business be financed? Will you need to apply for a loan or invest your own money?
A well-written business plan will help you answer these questions.
Business Structure
It is important to identify what type of business structure you want to run. The type of entity that your business is will determine a lot of things like how it is being taxed and its liabilities. If you want to run your business alone, then you must consider a sole proprietorship. Alternatively, a partnership is where there are two or more people involved. There are also other options like a corporation and Limited Liability Corporation.
Register Your Business
Before your business can run as a legal structure, you need to register it at the appropriate government agency. This process will involve registering your business name as well as providing other information about your business.
Determine the Type of Technology to Be Deployed
Every business today is being run with a set of tech tools to improve their efficiency. It is important for you to determine what type of technology will be suitable for your kind of business. Technology such as mobile apps, social media, and enterprise software are tools that can help your business become successful.
Insurance
Many businesses overlook insurance as something that they can get away with until they need it. There are various types of insurance coverage. But it is important to choose the type that best suits your business.
Build a Team
Unless you plan to run a ‘one man’ business, you are going to be faced with the task of hiring the best team to get your business running. The process of hiring a team must be tailored to the gaps that need to be filled in operations. Proper division of tasks and assigning roles to your team can play a major role in whether your business survives or not.
Branding and Advertising
A marketing plan should be put together in order to maximize your advertising and marketing efforts. A proper media campaign should be carried out to spread word about your business along with the products or services that it are being offered.
Four Key Points that a Startup Needs to Succeed:
- Customers – You need to identify a need that has not been met by the market. Determine whether you can provide solutions and if the market is right for you.
- Product – Your products or services must directly help your customer solve a problem or meet a need or desire. If it’s a product, make it very simple and adaptable to use.
- Timing – Every business opportunity has a limited window or period during which it will be viable. Entering a market too early or too late usually comes with great risks due to market uncertainties. The best timing is often when there is already a customer base that has not had their needs satisfied.
- Competition – Excess competition against an influx of new customers can make the market quite tough for new entrants. However, this offers many opportunities to disruptions that can take on the competition by creating new opportunities.
- Finance – Maximizing profit with minimum risks and costs.
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