How to Found a Startup in 5 Easy Steps
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How to Found a Startup: 5 Steps for Success
Want to learn how to found a startup? If so, odds are that you are a little nervous. Especially if you are serious about making a startup that becomes successful enough to be your primary job and source of income.
To help you out during this process, we have compiled a simple 5-step process proven to create successful startups.
1. It All Starts with a Good Idea
Your startup business idea is so crucial. This is the most important step towards creating a successful startup. You need a product or service which confronts a common problem that people face, solves it, and makes them readily willing to pay for it. A bad idea will usually result in failure.
As an example, consider an airline company. Imagine that you are going on a business trip overseas. You could theoretically make it there with a boat and several days of traveling. Or, you will probably just pay an airline company since they will help you reach your destination in the most time and cost-efficient manner available.
This scenario is a great example of why airline companies can be so successful. They have a service which helps people. A service which people consistently don’t mind paying for since it is a much better deal than other means of transportation.
2. Industry Research and Initial Paperwork
Once you have a good idea which you think fits our description above, it’s now time to do some homework. First, start by determining the number and quality of competitors that you have in your niche.
Don’t be hindered if you see some competition. This is a great sign that your niche is profitable enough for your startup to become successful. Study all the prices, products, and services offered by competitors. Find a way to make your startup unique and stand out.
When you finish all your homework and have a general idea of how you will fit in and succeed in your niche, it’s time to make your startup official. Either on your own or with the help of a professional, submit all the paperwork to register your business with the German government.
3. A Concise Business Model Canvas
First developed by Alexander Osterwalder, the Business Model Canvas is a proven business plan template for launching a successful startup. At the core of every great idea is a clear and concise business plan.
The Business Model Canvas is a wonderful template to follow if you are learning how to found a startup and want to follow in the steps of successful people. Here are the 9 components which you need in your business plan using this template:
- Why is your product or service valuable?
- Who are your partners and what is their interest?
- What activities and costs are necessary for production and delivery?
- How will you effectively handle customer service?
- Who are your target customers?
- What resources do you need to operate?
- How will you handle distribution and communication?
- What business expenses are necessary, and how much do you need?
- How much can you charge, and how will you get paid?
4. Securing Capital, Time, & Resources for Growth
More than likely, you don’t have a big bank account at your disposal with all the funds you need to both launch your startup and keep it running before it starts turning over consistent profits.
One great idea to consider during this period is to join a startup incubator. Startup incubators will help you with things such as capital, business advice, paperwork, and so on.
Of course, this comes at a cost. Typically, startup incubators will take a small chunk of your company shares. At the same time, they will help you increase the turnover and value of your company.
If you do decide to go down this route, make sure to consider all your options carefully. Don’t just jump on the first startup incubator that offers you a deal. Make sure that they share a passion for your startup industry, your business plan, and most importantly, that they believe in your potential for success.
5. Create a Team of Like-Minded People
The people you have working for your startup are important since they will represent both you and your brand. Learning how to found a startup eventually means that you need to bring in a team of employees and become the big boss.
Your team should be like-minded in terms of your startup goals and philosophy. If they only care about the paycheck, the quality of their work will typically be a lot lower.
Depending on your startup niche and the type of business activity you go through, the employees you hire can be from a wide range of backgrounds and skills. A web developer, for example, is a common employee for startups to hire while they are still building an online presence.
Online-based startups, in particular, usually have special needs in terms of finances. For this reason, many startup owners want a paperless and completely digital banking solution. If this describes you, consider getting a Free Penta Business Account.