You have an idea for a startup, but you’re unsure of where to start. There are so many “experts” out there who claim to know the best way to develop your business, but who do you trust? I’ve personally started several companies in various industries. Some have been successful while others were not. I decided it was time for me to share my experience with entrepreneurs who don’t necessarily have the money or prestige to attend expensive conferences and seminars.
The following is based on what I’ve learned through trial and error, mistakes that cost me dearly both financially and emotionally!
Entering the Startup Phase
As mentioned previously, if you’re reading this blog then you likely already have a great product idea that will be enjoyed by many. You are ready to enter the startup phase where you begin developing your product, launching your website, and reaching out to the public in hopes of gaining traction.
The first thing I will mention is not a way of doing business but rather a mindset that one must have in order to be successful at any level in life says William D King. Its called being “investor minded”. The best investors put their clients’ interest ahead of their own with no personal attachment to the outcome. They understand that when they invest in something they’re investing in its future value- with no control over what this might actually be or how long it might take for this value to ever equate to an actual return on investment. This is exactly how you should view starting your company! You should be confident in your product and willing to do whatever it takes, but not getting attached emotionally to the outcome. I have seen so many people give up at the first sign of hardship! Sure you may have a setback now and again, but don’t let this discourage you. Stay focused on your goal- developing a successful business!
What You Need
One question entrepreneurs often ask is how much money they will need to start their startup. There is no set answer for this as every person’s situation is different. Some can get started with just an idea, while others will require thousands of dollars to move forward. In order to determine what you personally need then take a moment to list all your necessary expenses related to starting up your company:
- Office space for employees?
- Hosting fees for website?
- Software/programs for web development?
- Salaries for your employees while you’re bootstrapping it alone?
- Legal fees to create your company entity and fund the initial products being manufactured on a contract basis, etc.?
Once you have this list then calculate how much money you will need based on when each expense must be paid. Some of these may have an immediate impact- office space is needed immediately while software might not be needed until later. Once you’ve calculated your costs then see if you currently have enough money saved up or available via credit cards or loans to get started. This is where investor minded comes in! You are investing in your future, so don’t be afraid to take out a loan or set up payment plans for some of these costs. It will all work itself out, just stay focused and keep your eyes on the prize!
Finding Your Customers
Once you have determined what your startup costs are then it’s time to start developing a marketing plan. Before we get into this I want to discuss how important “word-of-mouth” is in business. This works well for small businesses because the majority of people already trust recommendations from family and friends over advertisements and referrals from large corporations. When talking about startups this word-of-mouth effect multiplies tenfold as those who might purchase your product immediately tell all their friends about it! If they’re satisfied with your product then their friends likely will be too, and once they’ve had enough time to spread the word among their friends and family then you may begin looking for organic growth in your consumer base which is caused by people simply finding out about your company on their own.
This brings us back to our marketing plan- what we want to avoid at all costs is spending money blindly by randomly placing advertisements and hoping someone sees it and makes a purchase! We need to know who will actually buy our product. The most effective way of doing this is through surveys, focus groups, interviews, etc. Some of these methods can get expensive so don’t waste your resources paying for them if you have little budget!
Conclusion by William D King:
So how much money do you need to start a startup? It’s impossible to give an exact number, but what I can say with confidence is that it will take more than $100 million!
Startups fail when their founders lose focus on their ultimate goal. The road to success will not be easy and there may be some speed bumps along the way, but if you’re prepared for anything then you’ll see your business slay giants in no time at all!