Are you an entrepreneur who wants to be successful?
Do you have what it takes to make it in the world of business?
If your answer is yes, here are five factors to make your startup a success.
#1 Ideas
How do you come up with the next big idea like Brian Acton with WhatsApp, Joe Gebbia with AirBNB, or Garrett Camp with Uber?
There could be countless ideas; the best ideas are those which fix an issue.
This is all that matters. A useful tool or a device is something that solves an issue or problem.
When Phanindra Sama, the founder of redBus, was unable to visit his family during the Diwali season of 2005 due to unavailable seats, this triggered Phanindra to find a solution where one can book a ticket seamlessly. That’s when Phanindra, along with his batchmates, gave birth to redBus.
The most beneficial startup concept is one-
a) You are passionate about
b) That fixes an issue or problem that you would love to fix
c) That you can manufacture on a large scale.
#2 Team
Without the people who work behind the scenes, a business would be nothing. Hiring the right team is extremely crucial for any business, particularly for a startup, because it is the team that plays a significant role in understanding and executing the founder’s vision. According to CB Insights, one of the top 20 reasons startups fail is not having the right team. Out of 101 declined startups, 23% failed due to the wrong team.
Every startup is supported by a team—the more versatile the team, the better their chances of success. Versatility is not only about possessing more skill or talent but also a mindset. A mindset to adjust different compensation, take up a new approach, ability to change products, rebrand the business or even knock down a business and start over. It’s all about bouncing back after being hit. Teams that can recover together also have the unique connection of working together harmoniously during difficult times.
All startups, at some point, face unprecedented situations, whether it’s a product development issue, a funding delay, or a cash crunch, and that’s when your core team will come to your rescue. A good team will stick by you through the tough times and help you bounce back. It is the foundation on which a startup is built. So, choose your core team wisely and watch how things begin to fall into place smoothly, making the journey to your vision far more accessible and faster.
#3 Business model
Choosing the suitable business model for your startup is a critical moment in the establishment of your company. It aids in maintaining focus throughout your journey and keeps the company’s short-term and long-term goals in check.
According to a survey conducted by Palo Alto, people who create business plans are twice as likely to succeed as those who do not. To demonstrate why business models are still important, we’ve outlined the benefits of creating a startup business model below:
a) A business model is a blueprint for your startup success: Start with a business model canvas, a one-page template that includes space for creating, planning, and reinventing business models. The nine-building parameters include key partners, key resources, customer segments, value propositions, customer relationships, channels for delivering value, revenue streams, and cost structure.
The concept of having everything mapped out on one page allows forward-thinking leaders to keep things light and flexible to invent or creatively replicate their business models as situations change and evolve.
b) Competitive precedence: A significant perk of a solid business model can give you a competitive edge over other companies in your niche. Consider the first sold item online was a pizza, PizzaNet operated by Pizza Hut, experimented and launched a model to see if the World Wide Web could become a real shot. And to their surprise, it bloomed with huge orders.
This was an alternative to an existing business model and likely experienced a boost in orders and reduction in expenses.
c) Financial stability: The most significant benefit of a solid and proven business model is its contribution to organizational sustainability and the ability to weather economic storms or shifting market conditions. Every year, a staggering number of businesses close their doors due to poor financial management. A business model requires an entrepreneur to keep track of how much profit is made each day.
#4 Funding
As a startup owner, you need funding to enhance, expand and grow your business. So let’s understand the need of the hour:
a) Products, Raw materials, and Market research: Let’s say in the production of medicines, the equipment or machine required to produce it and the transportation vehicle is the fixed cost, while the medication, packaging, and market research is the variable cost.
You may possess working capital expenses from your internal funds; however, it will require a large amount for buying the equipment and other raw materials. For this, you need an external source of funding.
b) Working capital: the difference between an organization’s current assets and current liabilities is called working capital. This asset will be spent on work like hiring a team, buying a stock, purchasing the necessity, etc. not having adequate working capital can lead to bankruptcy and further impact the business; hence, in this case, funding is required. The majority of the organizations, at this stage, acquire funding via a bank loan.
c) Product development via Crowdfunding: Crowdfunding can be the best way to develop your product and launch it in the market. Since product development requires many resources and a team, which is best provided by crowdfunding your product.
#5 Timing
Before considering anything else, ask yourself if it’s the right time for a new product or service. If you hesitated even for a second, then drop it. The most significant factor in startup success is the timing, says Bill Gross, founder of Idealab. He studied over 200 companies and discovered that a startup’s timing accounted for 42% of the difference between success and failure.
Airbnb had timing on its side; it launched during a recession and when people needed extra cash, which wasn’t odd for a person to rent out a room in their home to a stranger. Likewise, Uber also benefited from launching during a recession, and drivers were looking to pick up some extra money to supplement their income.
In a nutshell
From putting the idea on paper to implementing its execution, every stage of the business is interdependent. Now, the ball is in your court. Play it well to win and continue winning.
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