Creating a startup: 5 steps to get your business off the ground

Many would-be entrepreneurs dream of creating their own startup. But no matter how attractive it sounds, success is far from guaranteed: 33% of businesses shut up shop within five years of launching, according to France’s INSEE (The National Institute of Statistics and Economic Studies). And it’s even tougher for startups, with the failure rate falling somewhere between 60% and 90%.

However, many savvy entrepreneurs defy the odds to make their dreams a reality. And you can, too, if you equip yourself with the right tools and know-how. In this article, we’ll go through the five key steps to getting your business off the ground.

As the name suggests, a startup is a newly established company. What differentiates startups from other small businesses, however, is the innovative products and services they tend to offer, an optimized business model, strong potential for growth, and a drive towards scalability.

For these companies, therefore, startup status is temporary - an initial stage in their growth trajectory.

So you’ve got that all-important first idea, and you’re convinced of its business potential. You see yourself diving head-first into the startup world and becoming a certified entrepreneur.

Before investing all your time and energy into launching your startup, however, you need to thoroughly evaluate your idea and its market fit.

• Refine your product or service by getting your target customers to try it. Is there a market for it? What exactly are customers expecting? What do they think of your value proposition?
• Carry out market research. This step is essential for all business creators - it not only validates your idea, but also gives you a better understanding of the market. Discover how to carry out effective market research in this article before launching your business.

The preliminary phase is all about laying the groundwork for your project. After considerable market research, you can assess whether your idea translates into a real business opportunity that meets a gap in the market.

Creating a business plan is the next stage of your journey. While this step is often dreaded by entrepreneurs wanting to move forward at speed, it’s key to the overall viability of your project.

A business plan dives into the nuts and bolts of your project. This may include a detailed analysis of the service your startup will provide, how many employees you'll need, what the competition looks like, your target audience and their expectations, your objectives and strategy, your financial forecasts, your distribution channels, and so on.

Not only does an in-depth business plan confirm the feasibility of your project, it can also help you secure a bank loan or an equity investment from financial partners.

From putting together your initial presentation pitch to establishing the legal framework of your business, learn how to produce a convincing business plan in our dedicated article.

Preparing a financial plan is the third step to creating your startup. Whether or not you’re looking for external funding, you’ll need a complete overview of your finances to map out your business strategy.

Equipped with a financial forecast, you can outline the resources at your disposal and identify the projected costs going forward (essential investments, expense payments, etc.). This will give you a deep understanding of your future business, and help you convince external stakeholders to back your venture.

You can, of course, finance your new business out of your own pocket or with a little help from friends and family. But most entrepreneurs won’t have this luxury and will have to get funding from an external provider, in the form of:

• a loan, through a bank or a crowdfunding platform for small businesses,
• an investment, whether via business angels, investment funds, or equity crowdfunding platforms.

Once you’ve completed this exploratory phase and confirmed the feasibility of your project, you can start tackling the administrative and legal formalities involved in setting up your company. This includes choosing the legal structure of your startup.

Deciding on a legal structure has a major impact on your business. Not only for tax and accounting purposes, but also in terms of how you organize and grow your company.

Most French startups pick the SAS (société par actions simplifiée, joint-stock limited liability company) status. This is a legally flexible structure with considerable freedom when it comes to deciding how the company will be organized. But it's also possible to choose one of the following statuses:

• SA (société par actions),
• SARL (société par actions à responsabilité limitée, private limited company).

However, these options offer less flexibility when establishing the structure of your business.

On top of picking your company’s legal structure, you’ll have various administrative and legal formalities to keep in mind, such as opening a business bank account or registering your trademark with INPI (optional, but recommended).

Congratulations! You've officially created your company. Now, the exciting part can begin. Among other things, you'll need to devote your time and energy to creating your website, honing your product or service, hiring your first recruits, and making those all-important first sales.

The good news is that the European startup ecosystem is booming. With an EU support network offering access to loans, grants, and investments, and local business incubators and startup campuses, you've got plenty of help at hand. You’ll be able to get expert advice from those who’ve already made the leap: learn how to grow your company, develop your network, and start innovating alongside the best of Europe’s up-and-coming business leaders.

Ready to create your own startup? Remember: follow these five essential steps and you'll be all set for a smooth and successful launch. With Qonto, you can get your admin done in a flash and 100% online to get your company up and running fast.