by Jeremy Clifford of RouterCtrl
Well, hello there, do you have a business idea that is sure to pick up fast by everyone and will make your filthy rich within a year?
Are you preparing for a startup and looking for ways to make it sure you don’t mess it up? Well, today we are tackling that exact point!
What are those factors that go into making a startup be successful? What even is a startup and how is it different from small businesses?
What should you consider while creating a startup and what are the major pros and cons of starting a startup?
All that and much more, read on…
What is a small business?
Any business which has fewer employees and smaller annual revenue than its larger counterparts is basically a small business. It’s much more technical than that but this definition I just gave you is the lump sum of it.
You can check out the SBA website for more into the technicalities of it.
So, what even is a startup?
No matter where you go on the internet, you will not get a straight definition of what exactly is a startup. Because startup is not a palpable idea, it’s just a stage of operation. A situation.
Startup is the initial stage of a business with a service or a product for which there could be a demand in the market.
A startup could have one or more entrepreneurs as its founder and it usually comes with limited revenue and high costs.
That sounds like any small business in its initial stage, what is the difference?
The main difference between a startup and a small business is (according to Steve Blank) ‘A startup is designed to look for a business model that is repeatable and scalable.’
Whereas, ‘A company/small business already has a repeatable and scalable business model.’
What that means is if you open a shop for clothing or beauty or a food joint you are not exactly innovating a demand for those things, you are providing a service/product which already has a business model and a demand.
But if you were to develop an app about something new or unique for which you yourself are not so sure how to make a demand and supply process for it, then that is a startup.
Startup are businesses that require their own unique business models.
Unique factors that go into the making of a startup
If you are even just starting to think about a startup, let alone how to make it successful, don’t forget about these key factors when creating your big plans –
1. Location.
This is probably the biggest factor apart from timing which we will discuss a little bit later which can make or break your venture.
You should decide where your business is going to take place, online, offline or in a brick-and-mortar shop, in your home office or what!
For example, if you are starting a virtual reality hardware store then you will need a brick-and-mortar storefront to allow people to have a demo for your products.
2. Funding.
If you have no funding then your startup won’t start, it’s that simple. So, if your initial funding is coming from family members or from a crowdfunding platform or even from professional startup investors, cool, there should be some money to use.
Make sure you have funds to move around with your startup.
3. Legal Structure.
Is your business a one man show? Then sole proprietorship should be your startup’s legal structure.
Do you need more people to manage it then partnerships are good. You can reduce your liabilities by registering your startup as a limited liability company (LLC).
Just have a clear idea what your business is going to look like.
Pros and Cons of a Startup
The good part.
- Established companies have to face vesting interests, a pre-defined set of marketing path and rigid business plan, and thus they are resistant to change their methods.
- Startups have agility to instantly make their moves in accordance to the new market interests.
- Startups have a great knit team culture that has passion and values. Most of the employees in large establishment are only doing their job for the money. There’s no other love for them.
- Updates. Startups keep updating their products and services based on the constant reviews they get from their users. While large and established business hardly have that advantage or the will to transform so easily and quickly.
- Working in a startup, believe it or not, is a lot more fun than working in large corporations. Every employee has flexibility in their deadlines and freedom to handle his/her part on their own time while corporations are rather strict with punctual reports and rigid policies.
The bad part.
- Risk. Most of these startups fail within the first year of their operations.
- The stability of a job is always playing hide and seek with you in most startups.
- You won’t get a high paying job in a startup, unless that venture makes it big.
- It is super hard to find great team composition, a small bickering between two founders in the initial stage of startup could hit hard that venture.
- You may not always get the right kind of people you are looking for in your team.
- Most startups have a hard time gathering funds and resources.
Factors that dictate the startup success
There are 5 big factors that go inside the success of any startup
1. The Idea.
What’s that idea that made you leave your old job behind and start on this project? Is it good enough to attract people? Is there going to be a market for it? Figure out your idea well, my friend!
2. The Leader(s).
At the time Google was being tossed around as an idea by its founders, there were other search engines already there.
But its leaders had a great vision and execution movements and Google became what it is now.
And so, a great leader could really do wonder even with a simple business idea.
3. The Team.
It is so hard to gather an efficient team that not only understands your plan the way it should be but also works together in harmony so there is always progress to be made.
Gathering some neat tech people, or marketing folks seems like a simple thing but it is not.
4. The Timing.
When youtube was launched, there were already many video streaming sites, however it was also a time when cheaper and faster internet just came into existence and that sky-rocketed the impact and business of youtube.
So timing is crucial too. Don’t let this factor skip your mind.
5. Market Research.
Know your probable customers. Know your market and the mood that is currently going on. Conduct a market research and hire people who can do it a lot better than you for you. And then decide on a business plan.
Conclusion.
No one can say how any business is going to perform, but these factors that we just discussed are sure to put your success rate at a higher double-digit number.
Anyway, good luck.
Jeremy Clifford is a father of two and a home networking enthusiast. The idea behind his blog RouterCtrl was to create a resource for everyday internet users to help them choose the right networking equipment and fix common network problems without the need to contact customer support whenever they run into an issue. Managing the wireless home network has never been easier.