Launching a startup is no small feat, from developing your first product prototype to building a brand around it. But despite all the rejections and frustrations, you face as an entrepreneur, launching a startup is also one of the most rewarding things you can do with your limited time and energy. Here are three tips on how to launch a business.
Draft Your Business Plan
Taking an idea into a full-blown business requires an extensive business plan that covers all possible risk scenarios, allocates resources effectively for maximum growth, and visualizes the business’ trajectory and direction for potential investors. Based on numerous studies, entrepreneurs who launch a startup with a comprehensive business plan behind them are 36 percent more likely to obtain a loan than the 18 percent that went in without one. Moreover, 64 percent were able to grow their business compared to the 43 percent who didn’t have a plan.
Validate Your Market
Is there a need for the product or service you offer? It’s common for aspiring entrepreneurs or “wantrepreneurs” to idealize the need for their product or service idea. Once you have a minimum viable product, whether it’s a physical trinket or a software solution, go out and test your target market. Are there people signing up for your startup’s newsletter? Are there companies giving you purchase orders at trade shows? Do your social media posts get people excited and participating?
Capital is what determines whether you can order inventory from your manufacturer or not, how low your price point per product can be for every order, what perks you can offer employees, and, essentially, if your business can continue to operate over the next few days. Running out of capital and constantly running out and securing funding from venture capitalists and investors can be a stressful ordeal. It can result in heavy dilution of your company ownership. Before going for high-interest and equity-type deals from banks and angel investors, it’s best to secure capital from personal savings, credit lines, and contributions from family and friends.
Launching a startup is one thing; keeping it alive and setting it up for success is a completely different battle. Start to bring in people who can help, such as former company founders and industry experts, to help you build the business correctly.