This guide is intended to give startups an idea of the overall goals and pitfalls when considering starting a new venture. We’ve provided some resources and ideas that can help you understand what to do and more importantly, what not to do.
Starting your own business is always a difficult prospect. You want to make it the best place to work in the world but that’s easier said than done. You have to build an online reputation and protect yourself from defamation. On top of that, you have to constantly increase the value of your sales to ensure that you can fund expansions and take your company to the next level.
It all seems overwhelming at times but here are some top tips and guidelines to help you build a successful startup:
A solid plan enables you to focus on what drives value
It is always important to have a solid plan before starting anything. In case of a startup, we need to have a clear idea about the company and other details. There are several factors like the future of the firm and huge financials at stake here. If we proceed without a plan we are risking everything.
Set your startup up for success
Once you have a solid plan, start working on building your startup. Think about how to develop your idea into a business. This is a crucial point as how to plan to add the business element will affect the startup
You should always consider conducting market research for your product, service or platform!
Every startup should ask themselves the following questions when considering whether the idea is worth pursuing:
Who is my target market? These questions should first start with demographic questions and then lead to behavioural questions
Is my product idea in demand? Initially ask customers about competing or similar products and customers opinions about them. Next step would be to present your product concept and ask for their first impressions.
How much are people willing to pay for my product? How much does the customer think is reasonable for your product? At what price would you consider the product to be priced so low that you’d question its quality? At what price would you consider the product starting to get expensive, but you’d still consider buying it? At what price would you consider the product to be a bargain — a great buy for the money?
Take the shortcut and take a look at this Google ressource about market research, which will learn you all that you need to know about your market.
Market research can be done through many ways. There’s an array of online tools to research to get insights into specific markets, but our all-time favourite is to gather a small group of friends and family and ask all the questions you have for your potential market group. They will provide many of the same results and give you insights to whether your plan has potential for real market impact.
Begin networking as soon as possible
Building a strong network with other experts in your field can help you gain exposure to a broader audience and offer you more power with investors. Investors will always find your brand more attractive and desirable as your business’s brand recognition develops, which may be quite advantageous to your startup.
Keep in mind that one of the most prevalent causes for a startup’s failure is a lack of funds. If you can get investors early on in the life of your firm, you’ll have a higher chance of making it successful. A higher level of brand recognition means more prospective consumers and market validation for your company. The high-quality relationships you create while networking may be enough to persuade a potential investor to invest in your company. It may be more difficult to persuade investors that you will earn a profit if you lack these relationships.
Find the right team
A startup brings together all of the members’ talents, creativity, and passion under one roof, all of which leads to the production of a single product. There’s just so much going on within that tiny group of people from various backgrounds; there’s so much going on. People develop new abilities and learn to take control as a result of the abundance of fresh ideas.
This close-knit group puts in long hours to achieve common goals, and everyone learns to trust one another. But — and there is a big but — all of this can only happen if one crucial need is satisfied, and that prerequisite is cooperation, or more precisely, good teamwork. A team can only grow with strong collaboration, which is even more crucial in a startup.
VCs look into the core team before funding a startup because they are aware that business plans may change according to the market.The following are the advantages of finding the right team: Organized workflow, builds trust, more learning opportunities, dealing with high risk and pressure, can manage other’s tasks and improved performance.
Create a term sheet
A term sheet is a written document that includes the important terms and conditions of a deal. The document summarizes the key points of the agreement set by both parties, before actually executing the legal agreements and starting off with time-consuming due diligence. The term sheet is tied in with splitting the potential gain and hazard between parties. To do as such, there are various standard statements that can be incorporated. Any circumstance may vary, yet understanding these provisos is as of now a decent initial move towards making the right decision. Never fail to remember that this archive is additionally a vital second to see who your financial backer truly is. Contingent upon what they push for or don’t, you can get a decent vibe for where they stand.
Understand the term sheet and get inspiration from Orrick on what the term sheet is and how it is made.
A startup pitch is the core principle for an evaluation event. The pitch should be short, precise and on-point and include market size, problem, solution and evaluation of future opportunities. The pitch is typically a slide deck of around 10-15 slides depending on the complexity of the project. Always remember that simplicity wins – always. In addition to that, always keep the phrase “If it looks like shit, it probably is shit” in mind when making your deck.
Grow your customer base and achieve (some) revenue
Creating a product is not just enough. Even an amazing product can not help a company if it doesn’t have enough customers. It is important to grow your customer base and make sure that it doesn’t decline. Make sure that your family friends and their friends are aware of your firm. Create a blog with interesting and relevant information. Find platforms where people discuss similar topics and integrate or blend in.
Another idea will be sending mails to potential clients or customers. Give away free goodies with your logos and name of the company on it. Influencer marketing can also be a great idea. Paid campaigns in social media will also benefit the firm.
Funds are important to start any business. There are several ways to find the funds required to start the firm. Without adequate funds any business idea you might have is in vain. Having a solid business plan is a key element to receive funding. There are several ways in which you can obtain the necessary funds. One option is to get a loan from a bank.
Another would be to seek help from acquaintances. Another option would be VCs or angel investors. Crowdfunding or taking money from your savings can also be considered. You can also find a strategic partner. It is quite important to minimize costs in the beginning.
For example, we at Black Capital Ventures provide a startup programme that all startups can apply for. Submit your deck here.