The world of mom-and-pop shops and self-owned businesses continues to be on the rise. Ever since the coronavirus pandemic, people have opted to leave their current jobs and embark on a new adventure: starting their own business.
Some people dream of a lawyer, doctor, or astronaut. Other more entrepreneur-minded individuals may opt to open their own business and be their own boss. This is where start-up businesses continue to rank high in popularity. People want to do their own thing and make money doing it.
Here are the proven tips on how to create a successful start-up business:
What is a Start-up Business?
The term ‘start-up’ refers to a business that is in its first stages of being created and operating. Start-up companies are founded by one—and maybe more—entrepreneurs who have a business idea in mind. Whether it be a product or service, this is the beginning stage of the business coming to life.
Many start-ups are created to meet a high demand for a product or service. These businesses typically begin with high costs and limited profit. This may lead business owners to seek capital from investors, capitalists, and loan officers. Several years in business may pass before a true profit is made.
8 Types of Start-up Businesses
Many people are opting to open their own businesses. 8 types of start-ups exist in today’s market. They include the following businesses:
- Social
- Technology
- eCommerce
- Healthtech
- SaaS
- Fintech
- Education
How to Create a Successful Start-up Company
When you are ready to open a new start-up company, several steps are imperative to take. When you are ready to open your new company, start here:
Decide your business concept
Many experts suggest starting a business in a field you love; however, it must be profitable! You may love drawing, but is the drawing genre you are interested in profitable? Now is the time to determine if your passion is profitable!
If you do not have a concrete idea of where to start, you can ask yourself the questions below:
- What do I love to do?
- What do I not enjoy?
- What would make these things I love to do easier?
- What am I good at?
- Could I give a ten-minute speech on the topic?
- What do others come to me for advice on?
- What is something I always wanted to do?
These are great jump-off questions to get you started on your next business venture. If you already have an idea of what you want to do, now is the time to fully choose that business concept and prepare to move forward!
What kind of business should you begin?
Before you choose the exact start-up business you want to start, consider the following:
- What type of money/funding do you have?
- Do you prefer to work remotely or at a workshop or office?
- How much time do you have to invest in your business?
- What passions interest you?
- Are you partnering with someone or going solo?
- What kind of support do you have in starting your business?
- Have you considered a franchise model? Would it make more sense for your business idea?
Research market and competitors
Now it is time to know your competition. If you need outside funding or want to blast onto the start-up scene, you need to know not only your market but your competitors. What is your competition doing? What is working? And more importantly, what isn’t working? That is the key to separate your business from theirs!
Conduct market analysis to see if your product or service is saturated in your area. If so, you can consider taking a different approach to make yourself stand out against the competition.
Here is how to start your research:
- Conduct primary research – Obtain information directly from potential customers i.e. surveys and questionnaires about what they want
- Second research – Use existing informational sources—such as census data—to obtain information about current data in your industry.
- Conduct SWOT analysis—SWOT stands for Strengths, Weaknesses, Opportunities, and Threats. This analysis permits you to observe the facts about how your product or service will perform in the market. This can also help you improve on your competitor’s products or services.
Create business plan
This wonderful roadmap helps you pave the path for your new business. You can provide it to potential financial institutions, investors, and companies.
A business plan helps cement your ideas, predict future issues, and solutions. A well-rounded business plan should include the following:
- Executive summary
- Company description
- Market analysis
- Structure and organization
- Goals and mission
- Products or services
- Background summary
- Marketing plan
- Financial plan
Design exit strategy
Should you need to exit your business, it is wise to create an exit strategy. Whether it be for financial or personal reasons, this step is just as important as your business plan.
You may want to sell your company or transfer it to someone else should you no longer want to participate—or if you are ready to retire. The exit strategy permits you to obtain the most value from your business at the time of selling.
The most common exit strategies include the following:
- Selling the business to another person
- Passing the business along to a family member
- Liquidating business assets
- Shutting down shop
Create scalable business model
It is best to plan on scaling your business as it grows. This scalable business model helps accommodate additional consumers without adding to your expenses.
The most common scalable businesses include the following:
- Digital products
- Subscription-based
- Network marketing
- Franchises
Plan for taxes
It is crucial to properly plan for taxes—or they can sneak up on you! Taxes can be complicated. Consider income tax, self-employment tax, sales tax, and property tax.
Depending on your industry and type of business, you may be mandated to pay additional taxes. These taxes can include unemployment tax or payroll tax.
Bottom Line
If you are ready to embark on your next business adventure, consider creating a start-up! Many start-ups find success and turn into large corporations. You have the freedom to run your own ship and live the life you want.
A successful start-up is comprised of deciding your business plan, researching the market and competition, creating a business plan, and preparing for taxes. You will not only be a business owner but also self-made—a win-win!
