Thinking of starting your own startup? Did you know that the startup business rate failure of US companies is 50% after five years and over 70% after ten years? Why do some businesses flourish while others fail? What can you do to ensure you don’t end up as one of these statistics? Sometimes, it is not just what you do but also what you do not do that can ensure your s
uccess. Here are a few tips on how to start your own startup:
- Begin with a business plan
Startups that have a professional business plan in place have a higher chance of obtaining a loan, receiving investment capital to start a startup, and growing their business. A business plan is a detailed written explanation of what your business is all about. This includes its goals, objectives, financial status, and present and future plans. A business plan is a foundation on which you will lay your business. However, a business plan is not set in stone. Updates to your business plan must be made as your business grows.
- Invest in professional liability insurance
When businesses fail to take out professional liability insurance, they risk losing everything in costly litigation. Professional liability insurance is insurance that you take out for your business, yourself, and your employees. When you start your startup, you will realize that some customers are hard to please. Sometimes, you could make mistakes, err in your judgment, or fail to deliver what you promise. If you are faced with a lawsuit for any of these reasons, professional liability insurance can ensure your financial obligations related to the lawsuit- settlements, lawyer’s fees, and judgment fees- are taken care of.
- Secure appropriate funding
Did you know that over 80% of startups fail due to cash-flow problems? Your startup will need adequate funds to get off the ground. Usually, the initial costs of a startup are much higher than anticipated. A business plan will help you determine how much funding you will require.
Before trying to raise funds, you must have a realistic idea of how much you will need, how much you will be investing, and how much you hope to raise. You could source funds from crowdfunding, banks, angel investors, friends, and family, as well as use your savings and credit card. There are pros and cons with each of these sources, so ensure you make a wise decision.
- Build a website
As well as ensuring that you have the perfect and most ideal physical location for your business, you will also need a business website address. In other words, build a website. A website is your most important online selling platform.
Don’t wait until your business takes off to start work on the website. Start creating the website as soon as you have a solid business plan in place.
To begin with, you can start with a basic website. Several website builders allow you to build a website for free. At the most, they will charge you only for your domain name and to host your website. Creating a website is much easier today than it was several years ago, and if you are computer-savvy, you can design it yourself. Or, you could hire a professional web designer.
- Surround yourself with the right people
Starting a startup is serious business. Talk to a trusted financial advisor, lawyer, and accountant about relevant laws, finances, and tax obligations. There are different sets of laws and tax obligations for partnership startups, corporation startups, limited liability startups, and sole proprietorship startups.
It would help immensely to have a mentor. The mentor should be someone who has successfully started one or more startups. They could mentor you on how to start your own startup, as well as push you and encourage you when things get rough.
Your startup will also require people to run the business. You will need to hire a manager as well as the staff. Your business plan will give you a rough estimate of how many people you will need to hire. If your startup is a service, you will require a small team who can land on their feet running from day one.
With these five tips taken care of, your business startup will have a better chance of taking off smoothly. The secret, though, is to ensure that you continue working on your startup with dedication and enthusiasm.