The Newstartups | 10:53 am |two-minute-read
What are start-ups?
Start-up is an infant company almost like a ‘foetus,’ but full of vagaries which are more than that of human life. They are usually small and financed and operated by a handful of people or even may be an individual.
Most of these companies offer a product or service which are not being offered elsewhere in the market.
Funding a Startup:
In the early stages, expenses of start-up companies mostly exceed their revenues for at least a year or two or maybe more.
Startups may be funded by traditional small business loans from banks or credit unions, by government-sponsored small business administration loans from local banks, or by grants from non-profit organizations and state governments.
Incubators can provide startups with both capital and advice, while friends and family may also pitch in with loans. A start-up that can prove its potential may be able to attract venture capital financing in exchange for giving up some control and a percentage of company ownership.
If you are generating revenues of about Rs 10 crore, have less than 20 employees, and remain in control of the company, you’re running a startup. Likewise, if you’ve just set up a tiny for-profit enterprise and are intent on it becoming big enough to take on the world – even if you’re still working from your bedroom – you’re probably a startup founder.
The task of launching a start-up boils down to four simple things. If your business idea has been fleshed out, you may be ready to launch.
The four things Start-ups should aim at
Have you identified a solution to a problem of your customers?
Will your solution improve the lives of consumers?
Whether you’re manufacturing a product or providing a physical service, your company must add massive value to customers. Consider, for instance, that many companies began because their founders had a problem in their lives. But there was no existing solution in the product they were delivering makes a startup good for nothing. Or if the solution existed, it was unsatisfactory, expensive, etc.
Find a problem and fix it.
Can you deliver the product or service you have developed?
Could someone else produce and deliver it for you?
Gain clarity about the system you’ll use to produce and deliver your product or service.
Sometimes an idea is so new or innovative that the capability to produce it is too expensive, limited or doesn’t exist because you are a start-up.
But an existing company, may be a Reliance or an Airtel or Flipkart in Indian context might be able to make a product for you and bring it to market faster and more efficiently.
How will you get your first customer?
Do you know how to get your zillionth one?
How will you expand your business?
Have you considered how you will exit the company and gain profit?
So many entrepreneurs start with a Eureka type of an idea, launch a company and then it just fizzles after a short time when they run out of money.
Having a plan and considering a short- and long-term strategy will help ensure that you are leading your company in a sustainable direction. Developing a business plan is great place to start, but these days flexibility is crucial for success.
Consider coming up with a strategy as being like preparing for a long sailing trip across the sea. Clearly, you need a map and a destination as also awareness you might have to deviate from the course in an emergency.
Do you have the guts to start?
The last element for planning a new venture is finding the courage to start. From experience, I know that if you have the first three elements of a startup in place, there’s no reason to wait to launch. Understand, though, that a significant number of new start-ups fail.
It’s possible that you won’t be successful in your first business. I believe the best entrepreneurs are those who brandish humble confidence and remember the valuable lessons learned from a few early failed attempts.
Launching a startup is like preparing for a half or a full marathon. You should know the path, the possibilities and your stamina to the finish line.