Starting a new company is always exciting as you envision all of the possibilities for the future. However, before you can get off the ground, it’s important to make sure you have everything properly prepared. Otherwise you risk encountering problems early on because you didn’t focus enough on fundamentals. Here are five crucial pillars that every startup must have in place in order to be successful.
A Hungry Market
The most obvious thing that a new business needs is customers. Before you open your doors for business, you should be sure that you’re serving a market that truly needs or wants what you have to offer. This is why you must do painstaking market research before you seek investors, raise capital or invest your own money into a startup. Many entrepreneurs are full of enthusiasm about their brilliant new concept but don’t adequately consider the needs of the marketplace. You must be clear about your target market and what they’re willing to pay for your product. Are you offering a new solution or presenting a better option than people can find elsewhere? If not, you have to go back to the drawing board.
Familiarity with the Competition
No matter how great your product is, it doesn’t exist in a vacuum. You must thoroughly analyze the competition before you can open your doors to the public. Are you offering something completely new or an improved version of an existing product? Even a unique product has competition, and it’s your job to convince people to switch from the old to the new. For example, if you’re introducing a revolutionary new type of exercise machine, you’re competing with makers of traditional fitness equipment. The same is true for software, pet products, edibles, and anything else. Find out who your competition is, how much of the market they control, what they’re charging, and what weaknesses they may have.
Infrastructure and Technology
You want to be sure that your startup is going to be ready to handle all of the business you’re expecting. This means having a solid infrastructure in place. Depending on what type of business you’re starting, you may need warehouse space, reliable employees and the right technology to run the daily operations of the business. It’s worthwhile to invest in reliable software programs that will help everything run smoothly. For example, reliable HR software for small businesses allow them to manage personnel and payroll. You may also need things like a phone or video conferencing system to make communication between employees and customers more efficient.
Marketing Plan
You need a solid marketing plan to let the world know about your new product. Your marketing plan may include elements such as print advertising, online advertising, SEO, radio or TV ads, social media marketing and more. You have to determine your budget and how to allocate it to get the best possible ROI. If you have a limited budget, you may want to focus more on low cost online strategies such as content and social media marketing and SEO rather than paid advertising. You need to determine factors such as your customer acquisition cost so you can estimate what it will cost you to reach your financial goals.
Financing
Every startup must meet certain financing goals. Unless you’re able to use your own capital, you’re going to have to raise money one way or another. This may involve business loans, personal loans from friends or family, capital supplied by investors or money raised from crowd funding. Although financing is one of the most essential elements a startup needs, it’s listed last because you really need the other fundamentals in place before you can hope to raise capital. You may have to be flexible with your financing goals. Many startups try many different strategies before they obtain the financing they need.
Starting your own company is a challenging experience. You need a great deal of self-confidence as well as persistence. The above list is not exhaustive, but it covers the five pillars that any startup needs in order to move forward. You also need to consult with a good business attorney and create a well-organized business plan. Once you’ve done all that, all you need is a great product or service and the ability to deliver it to an eager market.
