How many people do you know that have just taken out a loan and want to start a business but have no idea what they want to sell or what kind of service they are going to offer? Or they have good ideas but are having difficulties fairly regularly? The answer is probably too many.
If you’re an entrepreneur on your way to building a successful startup, this is the right article for you. Hopefully, it offers some good info on the obstacles you are likely to encounter, so let’s begin, shall we?
What is a startup?
In the world of business, the word startup is everywhere. It presents a company that is just starting off and has the aim to develop into a large company. In a way, it is a temporary version of a business.
Every large company was a startup before it became huge. Contrary to popular belief, not every huge company has had millions of dollars in the beginning. Most of them start off as small ideas, start growing, overcome huge obstacles via determination and come out as multi-million dollar companies.
What does the startup process look like?
During the startup process, the owner wants to establish what their product or service will be, learn about their customers, how they will finance the company and many more.
Coming up with the idea
Firstly, you need an idea. Ask yourself: What am I good at? What do I want to do for the next few years, and maybe the rest of my life? Everyone has skills, we just sometimes don’t know we do and some take the time or specific situations to show.
Research the market thoroughly and see what people want, and compare those results to your own talents and skills. Write everything down, it’s always good to put it all on paper, that way you can’t forget it. Think, how many great ideas have you had that you forgot seconds later because you couldn’t find your phone or a pen and paper?
When you have your idea, create a prototype of your product. After this, you will be developing a business plan, where you will decide what you want to accomplish. Set your goals and milestones, put them on paper (or note-taking program or app) and what steps you will need to make in order to achieve them.
Branding and funding
Afterward, it is time to brand your idea, which will give it an identity and make you recognizable and unique. Then, you will need to secure funding. Some people borrow money from their friends and family, some crowdfund it (which is becoming more and more popular), loan it from a bank, or get funded by angel investors, who are people who invest in the early stages and help businesses immensely.
How is it different from a small business?
The terms startup and small business are often used interchangeably, but they don’t mean the same thing at all.
As we already said, a startup is temporary and wants to become a large company. A small business, according to U.S. Small Business Administration, is an ‘independently owned and operated, organized for profit, and not dominant in its field’. A startup has the aim to make a huge impact on the market in the future, while small business is more focused on the local market.
Additionally, the funding has differences, as well. If a startup is successful, it receives additional funding called startup funding from different investors.
Startups also come with way more risk, because they want to make a bigger impact on the market. But small businesses are at risk, too – statistics show that 20% of them fail during the first year.
Aside from these risks, there are some obstacles that you are likely to come across if you are an entrepreneur with a desire to create to run a successful business one day:
1. Don’t know what you want to sell?
Some people want to create a startup but have no idea what they want their business to look like or what product they will be selling.
We already mentioned how you can solve this: think about your strengths, skills, and interests. Research the market and what people are buying. Add your own twist to a product and make it unique.
2. Not knowing your target audience
You were sure you knew who will be buying your product, but the sales aren’t doing great? Fret none, this can be solved easily. Today, there are dozens and dozens of websites and tools that can help you learn both about keywords and your target audience. Social media analytics such as Facebook Insights and Instagram Insights, and website analytics such as Google Analytics, can help you immensely.
Using these, you can learn what your target audience’s interests are, what they like to purchase, where do they purchase it, what their age and gender are, locations and many more. If you know which social media they use the most and what websites they visit, you can even run ad campaigns on them and attract their attention.
3. Lack of connections
Feeling like you have few or no connections can be pretty scary, but trust me, getting connections has never been easier.
Nowadays, there are always conventions and meetings happening that you can attend, approach anyone, introduce yourself and your business and strike up a conversation. They are great opportunities to meet other business owners, get advice and make friends.
Additionally, there’s always the internet. Using LinkedIn, you can literally connect to people, read their posts and interact with them. Leaving likes is great, but thoughtful comments are even better and actually greatly encouraged. They will show that you are actually interested in a discussion and well versed in the subject matter.
4. Sometimes you will fail and feel like you are stuck
No business can run smoothly from start to finish. There’s always going to be bad investments, lacks planning, not met deadlines, investors withdrawing their money, poor time management, and a million more difficulties.
The key? Stay determined and think positively. By being miserable and panicking you are only digging yourself further deeper into a hole. According to most big company owners who developed startups into large businesses, a determination is the one thing that got them where they are now.
5. You feel like every business is bigger and more successful than yours
Keep in mind that a startup is only temporary and that it will eventually grow into a full business. No business has grown fully and earned millions overnight. The process is long and often exhausting, but it will pay off in the end.
Being an entrepreneur with a startup is challenging and the difficulties are almost endless, but with the right set of skills and determination, you can succeed in a competitive market.
Hopefully this post has helped you learn something about startups and provided you with useful information!