Compiled by Anish
Starting a startup is not easy. It requires a lot of planning, research, hard work, and perseverance.
A startup is a newly established business that offers a new or improved product or service that is not being given elsewhere in the same way. But how to start a startup? What are the steps you need to take to turn your idea into a reality? In this blog post, we will guide you through the steps for starting a startup:
Let’s explore a step-by-step approach on how to start a startup:
1. The Idea
The first thing before thinking about starting a venture is to start shortlisting ideas. Idea generation can be done by identifying existing problems in the market faced by the consumers. This could be done by researching the market this will let you know the services and products that are needed in the market and will also highlight the problems faced by the consumers. Then after identifying the problems, we can then make a list of the problems and select a problem according to our expertise, liking, and available resources and work on solving them.
An example of this is when a person in Bengaluru was not able to find a bus to go home during the festive season, he then identified that the reason behind this was the inefficient management and operations by bus service providers which led to the creation of Redbus which is an app created as a solution to find bus services and to ease traveling by bus.
After coming up with a product idea the next step should be towards developing a prototype. A prototype is a functional basic model of your product. It is not the actual product but will resemble the features and quality of the final product
The main motives for building a prototype are
- To see how your product will work in the market.
- It also helps in raising funds for your project by pitching your products by showcasing your prototype to potential investors.
- It helps you identify potential bugs and problems that exist in your products this gives you an opportunity to address those concerns before the launch of the final product.
3. Business Plan
Coming up with an idea and creating a product that addresses a problem does not guarantee a successful business. For a successful business, one needs a precise and well-planned business model. It starts with basic things like whether the product is to be sold online or offline to more complex things such as the logistics and operations of the business.
Finalizing the revenue model and how the business will earn money is quite essential and is an important part of the business model of the company. For a product-based business like a clothing brand, the revenue model is simple higher the number of products you sell higher the revenue but for a service provider such as Zomato (online food delivery app) where there is no direct business with the customers the revenue model is uncertain and complex revenue, here the revenue might be through commissions, advertisements, and other paid premium services. For the efficient working of these things, there needs to be a proper business plan and this is vital to the success of the venture.
The main reason that startups fail in today’s day and age is a lack of funds or not optimally using the funds received. So along with raising funds for the company, it is equally extremely important to manage those funds optimally. So first we will first focus on raising funds for the venture. The first thing to focus on while raising funds is creating an appealing pitch to convince and attract potential investors to invest in your idea.
In most cases at the start no VCs would be willing to invest so we have to approach our friends, families, or angel investors that would be interested. The best way to finance your startup is no doubt bootstrapping your venture, Bootstrapping means investing your own savings, in this case, you are answerable to no one where the money went and there are no complications regarding repayment of debt. Another way of securing funds is to approach a bank for a loan. Nowadays many people opt for this way so banks have created a whole division to help SMEs thrive. At the start when money is scarce it is advisable to use the money wisely and spend it on high-priority things.
5. Building a team
No one can run a business alone. A business to properly function needs a team with a variety of skills. Some people that are required in every startup team are
- The cofounders of the company should be clearly defined so that the division of work can be done properly. They should also know how to manage things because the whole working of the company depends upon them.
- There also should be a proper CEO, CTO, CFO so that vital departments in the startup can work efficiently.
- The team should consist of an accountant for keeping track of all the expenses and revenue of the company.
- The team should also consist of a lawyer to deal with legal matters and litigations against the company.
- Loyal skilled people that will enable the startup to thrive.
Making a startup work requires many things like commitment, perseverance, an adequate amount of funds, and a great team. It isn’t easy to convert an idea into a money-making venture, but it is quite worth it.