Starting up a startup
This post was written by The Startup Magazine. The UK business blog with an editorial focus on developing a business resource for young startups and entrepreneurs. If you are a student with a killer idea that you want to bring to market The Startup Magazine is a business blog dedicated to helping you make the most informed decisions in your venture.
Starting up a startup is not an easy task, it involves many stages, and the journey of starting a business is unique to every company. When starting a business, before you set off to raising finance, or start to build a team, you need to define what your business is and what it does.
Every business starts with an idea, often that business idea solves a problem, or fulfils a demand. To do a quick test on whether you business idea is a valid idea, ask your self the following questions:
· Is there a need for the product or service?
If you are not sure about this, you should go out and research!
Make a survey, ask people a questionnaire. When you are doing this initial research, you don’t need to give your entire game away, you can be discrete in your questions about what your business idea actually is, you want to find out if people want the end result of your business idea.
When doing this initial research, try to cover a wide demographic, they may not all be your target audience initially. However it will be really useful to know what other people outside your target demographic are interested in.
· Can your target audience afford your product or service?
This can come out from your questionnaires; you can find out how much are people prepared to pay for what your business offers. You can also look at similar products in the market and compare your prices to them.
· How will the business make an income?
You will need to find out, how will your business make money, and how will you make your business profitable.
Once you have the answers to these questions, and you have validated that your business idea, could work, you can use the following questions to define your startup idea:
· What is the problem your product or service is solving?
You need to work out what does your company do that is useful to your customers. You also need to identify why your customers want your product or service,
· Who is your target market?
To best define your target market, you need to segment your market place in to niches, and identify the niche you wish to sell to.
·How will the team deliver a winning business?
What will set your company apart from the competition, and how will you stand out in your market.
· Who are your competitors?
Your competitors can range from small start-ups like yourself to large corporations who have been in the market for years. You need to identify them, their strengths and weaknesses. This will help you identify ways to set your business apart. One tool I highly recommend when researching your competitors is deudil.com.
· What are your Unique Selling Points?
What makes your business unique, and what will make your idea the best company in the market.
· How difficult will it be for competitors to copy your business and USPs?
Protecting a USP is not just about legal documents, please realise they are very important, but there should be something more. IT could be the USP involves a skill that you have that is makes it difficult to copy your product. Another way to protect your USP could be, to be the first out in the market, this is because being first will put off your competitors from copying you.
· What are your ambitions for the business?
This means where do you want to take the business over the next five years. Give your self an end goal, for example in five years time I ant ‘X’. Then you need to give your self smaller milestones, one every six months, showing the journey you will need to take to get to ‘X’.
These questions are important, they make the start of a business plan. The business plan is the document that will be read by investors and early stage employees. This document will also be a guide to how you will run your business and what it aims to achieve. The business plan living document, it should be reviewed regularly throughout the lifetime of a business, and used as a guide to remind you of how you wanted to achieve your goals. You’re allowed to change your mind about the direction you’re taking your business and how you’re going to get to your new goal, as well as your existing goals.
Starting up a startup is not an easy task, it involves many stages, and the journey of starting a business is unique to every company. When starting a business, before you set off to raising finance, or start to build a team, you need to define what your business is and what it does.
Every business starts with an idea, often that business idea solves a problem, or fulfils a demand. To do a quick test on whether you business idea is a valid idea, ask your self the following questions:
· Is there a need for the product or service?
If you are not sure about this, you should go out and research!
Make a survey, ask people a questionnaire. When you are doing this initial research, you don’t need to give your entire game away, you can be discrete in your questions about what your business idea actually is, you want to find out if people want the end result of your business idea.
When doing this initial research, try to cover a wide demographic, they may not all be your target audience initially. However it will be really useful to know what other people outside your target demographic are interested in.
· Can your target audience afford your product or service?
This can come out from your questionnaires; you can find out how much are people prepared to pay for what your business offers. You can also look at similar products in the market and compare your prices to them.
· How will the business make an income?
You will need to find out, how will your business make money, and how will you make your business profitable.
Once you have the answers to these questions, and you have validated that your business idea, could work, you can use the following questions to define your startup idea:
· What is the problem your product or service is solving?
You need to work out what does your company do that is useful to your customers. You also need to identify why your customers want your product or service,
· Who is your target market?
To best define your target market, you need to segment your market place in to niches, and identify the niche you wish to sell to.
·How will the team deliver a winning business?
What will set your company apart from the competition, and how will you stand out in your market.
· Who are your competitors?
Your competitors can range from small start-ups like yourself to large corporations who have been in the market for years. You need to identify them, their strengths and weaknesses. This will help you identify ways to set your business apart. One tool I highly recommend when researching your competitors is deudil.com.
· What are your Unique Selling Points?
What makes your business unique, and what will make your idea the best company in the market.
· How difficult will it be for competitors to copy your business and USPs?
Protecting a USP is not just about legal documents, please realise they are very important, but there should be something more. IT could be the USP involves a skill that you have that is makes it difficult to copy your product. Another way to protect your USP could be, to be the first out in the market, this is because being first will put off your competitors from copying you.
· What are your ambitions for the business?
This means where do you want to take the business over the next five years. Give your self an end goal, for example in five years time I ant ‘X’. Then you need to give your self smaller milestones, one every six months, showing the journey you will need to take to get to ‘X’.
These questions are important, they make the start of a business plan. The business plan is the document that will be read by investors and early stage employees. This document will also be a guide to how you will run your business and what it aims to achieve. The business plan living document, it should be reviewed regularly throughout the lifetime of a business, and used as a guide to remind you of how you wanted to achieve your goals. You’re allowed to change your mind about the direction you’re taking your business and how you’re going to get to your new goal, as well as your existing goals.
