The topic is a misnomer of sorts. Indeed, every startup begins from a scratch to the best of my limited intelligence. Despite, there are quite a few things you should know before venturing into a startup.
Firstly, statistics from around the world clearly indicate, 60 to 70 percent of startups fail within the first two years of launch. Within the first five years of operation, about 80 to 90 percent startups fail due to various reasons. Some barely manage to scrape it past five years while even fewer actually strike it big, according to various business reports.
Reasons for failure
There are several reasons why startups fail
- Lack of innovative ideas
- Shortage of funding
- Improper knowledge of the market
- Undercutting competitors
- Improper staffing
However, these factors need not discourage you. Instead, you can learn from them and launch your own great startup from a scratch.
Tip-1: Develop unique concept
Nowadays, most startups are copycats. Meaning, they enter the same business where someone who launched earlier is flourishing. Remember, there are hundreds of people doing business with the same idea. However, that is no guarantee that yours will succeed.
In order to ensure a better rate of success, it is vital to develop your own unique concept. To do so, you will need to study the market well. Use your creativity to see what can sell. People love trying new stuff.
Tip-2: Study the market
Once you have decided on a unique service or product, you need to explore the market. Understandably, any product or service sells provided you have a market for it. And this market has to be fairly large. Customers are the only source of income for your company.
Nobody parts with money for something they do not require, regardless of how unique are your offerings. You can do so by talking about your ideas to a few trusted friends and close family. Here, it is vital to remember that your ideas should not be leaked.
Tip-3: Write an excellent project report
As the startup, you will definitely need some capital in some form. Also, you need to be clear about how you will operate your business. The best way to do so is by writing a great project report. Of course, there are professional project report writing services available. However, they cost a lot.
Since you want to launch a startup from a scratch, it is advisable to download some sample project reports for guidance in writing for your venture.
Tip-4: Look for funds
Funding is the most vital part of launching any startup. There’s barely anything you can do without adequate funds to launch a modest startup. Here are some ways to get funding for your venture:
- Venture capital
- Bank loan
- Borrowings from family and friends
- Own capital
Select which is the best suited for you.
A lot of Non-Banking Financial Companies (NBFC’s) also offers business loans on very soft terms. But once again- you need to be careful about how much you will spend before money begins trickling into your business.
Tip-5: Astute budgeting
Once you have the required funds, you will need to engage in some astute budgeting. Here is an overview of imminent expenses:
- Staff costs
- Infrastructure, including premises, computers, office equipment
- Advertising, promotions, and publicity
- Free sampling
- Personal and family expenses
- Paying suppliers
- Utility bills including power, telephone Licensing fees
Tip-6: Legalizing your startup
Remember, every startup needs to be legalized. Meaning, you need to get the necessary licenses and permits from concerned authorities. Admittedly, this costs and consumes time. Despite, licensing is must have.
Without proper licensing, your business can be deemed illegal and anything you do can land you in serious trouble with the law. Getting insurances and bank accounts for your business can also become impossible unless you have the right licensing.
Tip-7: Proper branding
You will definitely require a proper brand for your startup. To get a good brand, use your creativity and also ask suggestions from close friends and family.
The brand name has to be catchy- meaning people have to remember it easily. You will also require a company logo that is something unique. Both have to be designed in a manner that people remember.
Furthermore, it is vital to have your logo and trade name or brand name registered with concerned government departments. Remember, someone else can hijack your brand and logo and copyright it, causing you immense distress.
Additionally, you can also face a lawsuit for misusing a logo and brand name that was rightfully yours, to begin with.
Tip-8: Proper staffing
To run any startup, you will require some minimal staffing. Understandably, hiring a professional will cost you a lot by means of wages. However, recruiting fresher can cause you to lose business because they would lack the experience required to handle the show in your absence.
You can counter this problem by hiring an experienced hand on part-time or consultancy basis. The skills such experienced or skilled staff will bring can help propel your business to great heights. You can enlist the help of some college interns and pay a small stipend. However, these can only be used as helpers or assistants.
Tip-9: Promote before launch
As soon as you finalize the day of your launch, begin promoting your startup to prospective clients. Make special, introductory offers for customers who sign up to try your services or products upon launch.
Best places to promote your startup is community halls, church and religious congregations, parties where you are invited, word of mouth through friends and relatives and a few printed bills distributed in your area.
Of course, expensive options including newspaper and TV or radio commercials are available. However, since you wish to startup from scratch, these would not be advisable.
Tip-10: The Social media blitz
Get on the Facebook, Twitter, Instagram and every other available social media platform. Post interesting pictures, updates about your services and innovations, latest trends in the market and how you meet or exceed customer expectations.
Nowadays, every major and well-established company utilizes social media to stay in touch with customers. Moreover, social media allows your customers to interact with your startup.
Allow your clients- both satisfied ones as well as those unhappy, to vent their views on your Facebook Business page. However, you should also be ready to respond to these comments.
Other tips for startups from scratch
The Internet indeed opens several new vistas for start-ups. For example, you can offer your products and services on major e-retailers such as Amazon. Sign up with companies that offer discount shopping cards, provided your seed capital permits the expense. Build loyalty through your own rewards program. Attend to any complains immediately.
To begin a startup from scratch, you can avail of some resources that are available at a nominal fee or free. These include
- Startup incubators
- Crowdfunding platforms
- Venture capital advisers
- Free startup forums
- Online support groups
Why utilize free resources
Utilizing these resources has inherent benefits. Firstly, you come in contact with professionals who are well versed in the startup process. Here, you can get free financial, legal and other advice that will help you launch your startup from scratch. Crowdfunding platforms are one of the ideal ways to raise money if you are entering a small venture.
Crowdfunders do not charge you anything. They take a small percentage of whatever funds are collected for your venture, as management costs. Online and other forums are definitely useful when it comes to learning experiences of other entrepreneurs like you.
Shared experiences help ease the road for you while getting permits and in almost every aspect of setting up your venture.
Never leave your job
A common mistake most startup entrepreneurs make is to leave a steady job to enter the business. This is fine provided you have adequate funds to sustain yourself and family till the startup begins paying the dividend.
Generally, people will launch a startup in the sector they know best or have worked for a company in the similar field. Leaving it deprives you of opportunities to learn latest trends and developments in your field and meet new people who can help your venture.
Beware of foreign funding
Getting funds from a foreign angel investor or venture capitalist sounds great. You may be offered hundreds of thousands of dollars as venture capital by some unknown angel investor. Sadly, there are cases where terror networks, drug cartels, and other illegitimate businesses have tried to launder money by financing startups.
Unless you are sure the funds come from some legitimate source and are not from any nefarious activities, decline any funding. Regardless of how attractive their offer may sound.
Some states and countries offer tax holidays for startup ventures. Meaning, they are exempt from paying annual taxes for a couple of years or so.
You can visit the local tax department and find out about rules for your business. If you are indeed liable to pay taxes, it is worthwhile to do so, since it gives your business better legitimacy.