It seems like every day, there's a story about a new startup that's going to change the world. In fact, figures show that there are over half a million startups launched every month – just in the United States alone. And there are a lot of stories about the successes—startups that began in a garage with a simple idea and went on to go public for a billion dollars.
With stories like this always in the news cycle, it is easy to start thinking that you can do it too. And the good news is, you can - but you need to plan correctly.
Here are 10 steps to getting your startup running in the right direction, from the beginning.
Have a plan
You might have vague ideas about what you want to accomplish over the next three to five years, like revolutionise banking, but unless you sit down and work out exactly how you’re going to get there – you will most likely wander.
Keep on target. Write a business plan.
Do the paperwork
You’ll need to register your business. There’s registration, tax IDs, permits, licenses, etc. It might be tempting, but you can’t put it off. There isn’t any glamor in the paperwork, but crossing off the details early on can save you a major headache later. Besides, the more tangible you make your business, the easier it is to do the next step:
Find a team
This can often be the hardest part of the process for an entrepreneur. You need to be able to recruit effective, enthusiastic employees and then delegate parts of your dream to them. Both of these are tough to do. You probably don't have a huge budget to attract the key talent you need to develop a world-class team. This is where an equity plan will come into its own. You won't be able to compete with established companies on salary but if you have a strong element of employee ownership, this will be a huge hook to attract the people you need.
Next look at your business plan. Where do you want to be in three years, and what do you need right now to get there? Your business plan can show you exactly what employees you do or don’t need.
Maybe you know you’re going to need some aggressive marketing, and don’t know how. Maybe you know you’re also going to need to attract venture capital investors right away, but you have no idea what a capitalization table is. Now you know what two employees should be at the top of the list. (Or, you need to invest in cap table management software.)
Which brings us to the next point:
Build a cap table
A capitalization table, or cap table, is one of the most important building blocks of a new startup. At its basic level, it shows the total market value of a company and its components. But more importantly, it breaks down the company’s shareholders’ equity.
You can’t do this retroactively. When you’re taking on investors, or hiring new employees, you need to understand what you’re worth and how best to leverage your potential.
Cap table management software can take a lot of the guesswork and manual input out of the process.
Build your presence
Even before you officially open for business, every second counts. Start by getting your name out there. It can be as simple as building and launching your website. Get an idea of what the market looks like – do some research on your competitors’ websites and social media.
If your idea is as good as you think it is, people are going to start looking for it. Let them know you’re on the way.
Prioritise customer service
It’s the old ‘If you teach a man to fish…’ idea. A customer who makes a single purchase is good. Convincing that customer to come back, and keep coming back, is how you grow.
The only way to do that is through excellent customer service. Right from the start, this needs to be a priority. Bad reviews at the beginning are fastest way to strike a startup dead in the water. Get this right, and you’re on your way.
Determine your structure
Are you only going to hire full-time employees? Does your business require the flexibility of contract workers? Have you thought about the potential benefits of remote workers?
Exploring these ideas helps you to clarify exactly what type of company your startup is going to be, from day one.
Just remember, you can pivot your business model, but you can’t pivot your foundation.
Be OK with staying small (for now)
Before you start scaling up, you need to make sure your foundation is strong – all the growth that comes will build on top of it. Look at your business plan – maybe you have a long way to go. Look at your capitalization table – maybe you don’t have the market value you need to make the next step.
Once you’re sure that you have done all your research and planning, and you’ve built a steady infrastructure, then you can focus on growing.
Do market research
Even if you have thirty years’ experience in the business, once you’re launching a startup, you’re approaching your business from a completely different angle. You need to make sure you understand the entire market from that new angle.
Create surveys for potential customers – ask them exactly what they’re looking for from your industry, and why. Reach out to your contacts directly, and engage with them on what they need.
This is probably the first step that most people think of when they imagine launching their own start-up. After all, it’s the step that gets the most press. But really, you need to have everything else in place first.
Once you have your capitalization table in place, you should have an idea of what type of funding to pursue.
There are all different types of funding, and each brings its own positives and negatives. There are venture capitalists, start-up incubators, small business grants – you can even crowdfund. Explore the benefits of each avenue.
Request a free demo
If you’d like to see for yourself how the Global Shares stock plan administration software can help your company, book a one-on-one, no obligation consultation today and we’ll demonstrate our award-winning software.