Simply put, Entrepreneurship means that you choose a direction for your life and take responsibility for getting things done. In today’s ever-changing world it’s important to be self-directed to understand what problem is important to solve and to have the capacity to find innovative ways to solve problems and provide value.
Starting a company can be the most profitable, brain tasking and enjoyable venture you could ever imagine. Also, It can be very dreadful, Entrepreneurs who follow the following steps listed below have a higher chance of doing better.
- Identify a Startup Idea
- Validate their idea.
- Find a Co-founder
- Get Funding to start your business.
- Incorporate Your business
- Find Traction
Read on for a detailed explanation of each step
Identify a Startup Idea
One very good way to get startup ideas is to ask people around you including your family and friends what annoys them in their environment the most. Lots of founders solution starts from frustrations around them.
Reading trend and predictions from your preferred industry also help too. Online forums, groups and social media mentions come a lot handy here. Checking out what other people/businesses have come up with can be a great way to kick your thought process into gear. It also presents an opportunity to improve on an existing product/service that others have come up with. Who knows, you can get a big idea on how to improve it and sell at a lower price point (not always safe)
During your brainstorming process ask yourself/team these questions
- What can be done to improve the product/services?
- Can I add a new feature?
- What about different materials?
- Can I personalize it somehow?
Validate your idea.
Great you have come up with an idea. If I were you, I won’t quit my job yet. Start asking people what they think of the idea. Family and friends can be very biased because they do not want to hurt your feelings.
Here are 3 simple rules to help you.
- Talk about their life instead of your idea
- Ask about speciﬁcs in the past instead of generics or opinions about the future
- Talk less and listen more
This phase is the time to build a Minimum Viable Product (MVP). An MVP is the simplest, most basic versions of your tool or service possible. It’s functional enough to satisfy early customers and get a sense of what you should improve. If you want to kick start your idea without spending so much, build a landing page that describes your products or services. Ask people to submit their email address for early access, free subscription, membership, discount or some other compelling offer. Do remember to incorporate what you have learnt from talking to prospective users into your MVP.
Find a Co-founder
There are so many reasons an Entrepreneur should look for a cofounder while starting a business.
Here are a few:
- It’s easier to get funding. There aren’t so many details as to whether double founders perform better than single founders, many investors believe it does. Not having a co-founder is the easiest way to get disqualified while looking for funding. Paul Graham (Y combinator Co-founder) is one of the major advocates of having a Co-founder. There is a very good chance your co-founder will have influence in raising funds or getting external investment.
- You have more emotional support and skills-set. Co-founders can provide skills, knowledge, connections and directions especially when they are very experienced. They can make you see reasons not to make certain decisions that won’t benefit your business. When you are finding a co-founder, look for someone with complementary skills, personality, work habits and business ethics. Someone that believes in your vision, have the right skills and have the desire of being your co-founder beyond sentiment.
One of the major drawbacks of having a Co-founder is conflict. You must resolve conflict quickly else your equity might just be in trouble. A very good way to get started with splitting equity is vesting it.
Get Funding to start your business.
Early startup funding normally comes from family and friends, it’s called Seed round. A family member can contribute money to your business in exchange for a small percentage of equity. You can also apply for personal loans, request for donations and apply for a small business grant. Countries and states have programs that help new founders get started with their idea. Crowdfunding platforms like Kickstarter and Gofundme are very good places to start.
Crowdfunding doesn’t just get you the much-needed money, it helps you with the much needed early publicity, feedback and if you are very lucky press. Angel Investors are always on the look for new companies that can 10x their investment in record time. In picking one, look for one that will be keen to work with you and advise when necessary.
Incorporate Your business
As a sole-proprietorship, your business isn’t different from you. Whatever happens to your business happens to you. When you incorporate your business, everything changes. Your business becomes a legal entity, it can now sue & be sued, buy & sell properties, commit crimes, bid for contracts, incur taxes and do much more.
Advantages of a corporation
One major advantage of a corporation is that it protects you as an individual from business debts and obligations. Creditors can only collect payment from the corporation’s assets and not your personal assets like your cars, house, valuables etc. You are also not liable for the company actions except on rear occasions. Unlike sole-proprietorship, where anyone who is suing your business is suing you and you are responsible for the aftereffect of any business decision your business take.
Registering as a corporation let you transfer shares. You can sell some of your ownership, transfer it or give it away. If you are looking forward to accepting external investment or bringing partnership on board then you need the ability to divest which a corporation offers you.
Lastly, a corporation gives you the ability to deduct company expenses before allocating income. Even though registering your business as a corporation have so many advantages including helping you attract investment & funding, It also has downsides. Paying tax to the state & sometimes the federal government is very compulsory depending on your country laws, this can cut off a huge percentage of your company income.
Note: you do not have to incorporate, there are other flexible business structures, especially if you run a medium small business. Do consult your business adviser or lawyer for a business structure that fits your business.
As an Entrepreneur, Your offline or online digital marketing goals should focus on marketing activities that result in a measurable, significant impact on your sales goals. In the early stage, you should find out what this goal means to your company. Does it mean raising more money or does it mean becoming profitable? Figuring out these goals in hard numbers is the best strategy example: how many paying customers equals profit, what is my break-even point.
Knowing these numbers, you will be able to focus your finance, team and other resources to working towards it. It’s easier to know what to do when you study other businesses in your niche to see how they are getting traction for their business.
If you are looking for funding, the definition of how much traction you need is very relative. It always keeps changing as the environment get competitive, that’s why you should look at companie that gets funded in your niche. Notice what they have done and do something similar. Getting someone experienced to lead the funding round also helps too.