Do you have an idea that will be a smashing success? Well, before you start thinking about turning it into your startup, you should know that 90% of all startups fail. This should not demotivate you by any means, but it does mean that you should put in some serious thought and work before you create your own startup.
Let’s talk about a couple of steps you should take, to increase the chances of your startup becoming a success.
Evaluate your product’s practicality
Many people have different ideas about various types of services or products. The question is how practical the product actually is. A staggering 50% of the startups that fail do so because of the bad market research and business plan. This means that they have not done two things correctly:
- Evaluate the practicality of the product - Creating a startup needs to revolve around a product that people are actually going to find useful. Therefore, despite the fact that you personally believe that people might need a software or hardware product, reexamine your idea with other professionals before you continue.
- Market research - This is another necessary step that you have to take before going for funding. What is your market size? Who is your target audience? Does your product carry international market potential?
All of these questions should be answered in detail before you start searching for funding. It will not only make your idea viable; it will more easily persuade investors to fund your project.
Taking these steps is necessary for increasing the success potential of your startup.
Get legal advice
Legal advice is necessary before starting your startup company. There are plenty of things you should think about, as different types of taxes are applied differently depending on the type of company you are forming. Therefore, explain your plan to a legal expert, who will provide you with the best solution in your starting phase.
Take your time for making this step happen, as it will positively affect your budget in the beginning.
Consider funding options
So many startups are born due to the existence of crowdfunding, venture capital companies, and angel investors. Each of these approaches has its pros and cons. A closer look will make it easier for you to understand what might be your best option.
- Crowdfunding - This approach is picked by a huge number of startups because owners get to keep the entire company equity. However, picking this approach will require you to promise something in return to the donations made. The main benefit is that the company’s direction is determined by its original founder.
- Venture capital funding - Venture capital companies are always looking for ways to increase their capital and are willing to invest in startups, however, their funding is exchanged for a percentage of the company equity. While this will provide you with great funding opportunities, you, as the company owner, are not the only person of power, which might affect the direction of your startup for better or for worse.
- Angel investors - Similarly to venture capital companies, angel investors are individuals who would like to invest in your startup. They take a percentage of equity in your company as well, but as you are dealing with a single person, agreements about where the company is going to go are sometimes easier to reach.
- Loans - This is the least favorite option startups choose, because paying back the sum loaned cannot be postponed to reach maximal growth. It is an option, but you should probably steer away from getting a loan; usually, the guarantee is your whole company.
Once you have reviewed all of your options, you will easily be able to make the right decision for the future of your startup.
Have a marketing plan prepared
If you want to achieve incredible growth from the moment your startup comes to existence, it is best to devise a marketing plan that will allow you to reach your goal. One of the best approaches is to immediately work on your startup becoming a brand. There are many steps to be taken, however, the right marketing approach will reach out to a higher number of people, which is particularly important for a crowdfunding campaign.
Create a great promotional video and a video that explains your product in depth. It is the perfect approach for crowdfunding platforms. Also, establish your social media presence, where people can anticipate the release of your product. It will help you build up the hype around your whole story.
These are only some of the steps you ought to take before starting your own startup. Each of the above mentioned steps is crucial for the future of your startup, therefore, make sure that you can completely devote your time for each of them, as it will greatly improve your chances of being in the 10% of successful startups.