3 Tips For Forming Your First StartupAlex Sky
Starting your first company can be one of the most fun and exciting ventures you’ll ever embark on.
Not only do you get the flexibility and freedom to do whatever you want, but additionally work in a field that you’ve been passionate about. And if you’ve been looking to start your first company, there are a few helpful things you should know. Check them out below:
Know Right Away How You’ll Make Money
If you’re going to be launching a startup, then you first need to know how your idea is going to make money. No matter how great you believe your idea to be, it has to be one that will genuinely generate income, as very few ideas are going to be so incredible that they deserve the backing of an incredibly long runway.
If you know in your heart that your business isn’t at that place, then you need to address your revenue model, because as noted by Business Insider, 82 percent of businesses fail because of cash flow problems. And if you don’t want your startup to follow suit, then it’d be best to simplify this process as much as possible.
Start out by looking where your revenue stream could possibly lie, as well as where that demand comes from. This could be as simple as taking an existing model and applying it to a new market or a relatively new product or service that’s looking to make an impact on something ongoing. Additionally, this is also a good time to use your elevator pitch as a cursor, because if you can’t describe how it makes money in a sentence or less, then it probably takes too much explaining. Make no mistake; this might take quite a bit of time, however, will be well worth the effort down the road.
Establish A Budget
Once you’ve established how your startup is going to make money, it’s time to look at how you’re going to afford this thing. With most startups, the most conventional way to go is with fundraising, which usually comes in the form of seed/Series-A funding, as well as things like accelerators or incubators. This is a pretty tough process and one that is going to take quite a bit of outreach; because as noted by TechCrunch with the average seed round coming in at around $1.14 million in 2016, that means most startups aren’t seeing the most value. And if your company is looking to raise some money, then it’s good to be prepared regardless of what level of investment.
Map out the different components your startup is going to need, as well as how much they’re going to cost. Furthermore, looking into possible options such as business credit, or even taking out a loan to give yourself runway. While those options are some that should be a last resort, it’s never a bad idea to see what your options are. Also, look at ways you might be able to balance cutting corners, such as having a primarily student-run startup, with you providing guidance and leadership. All-in-all, be patient with your approach, letting the rest fall into place.
Work On Your Branding
Finally, as one of the most important aspects of any business, having a quality brand is a must. Not only will this be how your customers gain a better understanding of what your company is about, but you’ll additionally have something that they can grow. This is a difficult process because as noted by CrowdSpring, with 91 percent of customers saying they prefer an authentic brand over anything else, ti can be hard to come up with something genuine. However, that’s why it’s important to go back to the root of why you started your business in the first place.
As most entrepreneurs start their business because they want to make some sort of impact on the world, start with that as your main driver to your brand. Granted, if you find yourself in less creative spirits, then it’s okay to use something like a business name generator or outsource your branding needs, as the biggest thing that you should try and convey is the passion for your industry.
A big part of your brand is the impact or mission that you’re trying to venture along with your customers, which is an honor you shouldn’t take lightly. Overall, this is perhaps one of the most significant hurdles you’re going to face in the identity of your business, but also an investment you’ll feel proud about for years to come.
What are some things you’re most excited about in forming your first startup? Comment with your answers below!