90% of startups fail because they haven’t done any market research.
The truth is, creating a startup is incredibly difficult—but also rewarding. If you understand how to do market research and how to create a business plan, you’ll have a much higher chance of succeeding.
Even so, those are only two of the components of a successful entrepreneurial endeavor. Read on to find out about the five most important things to do when creating a startup.
1. Create a Written Plan
Creating a startup means you should have a business plan ready.
Before you jump in, remember that there’s a huge difference between a business idea and a business plan. A business plan should include a 12-month budget projection, a marketing plan, and an understanding of customer acquisition costs.
The most successful business plans are written 6-12 months after the initial business idea.
Every business plan should have target measurements or incremental goals. You’ll be able to measure the success of your business if you are reaching these goals every quarter.
A business plan should also look at the competition and your ideal customer. You have to figure out how your business is either different or better than the competition. Then you have to figure out how you will reach your audience.
The overall goal is to create a business plan that generates revenue to turn a profit.
2. Build a Strong Team
Depending on the size of your business, you’re going to need a team to help you establish and grow your business.
You want to hire a team you can trust. A team that offers feedback can be more trustworthy and they can help you identify weak areas of your business.
Also, having a strong team can help you resolve customer issues and understand your ideal customer. Find people who believe in your mission and product and are willing to be your biggest advocates. Having passionate people representing your company makes the sales process much more effective.
For more information on how to use your sales team effectively, check out my article on 6 things you could be doing wrong in your sales pipeline.
3. Market Research
After you have a plan and a team assembled, you should do your market research. Make sure to figure out everything you can about your core audience. Understand why customers shop for your product and what need you’re addressing.
Beyond your core audience, you should know everything about your industry. Identify what separates your startup from your competition.
Your market research also includes figuring out your brand. Your brand is the story you tell your customers. It’s the story they experience when they buy something from your store.
Conducting surveys, researching SEO in your specific industry, and looking at demographic information is all part of market research. The results will be a guide for when you create a startup page, web content, and a marketing plan.
4. Figure out Your Finances
Any startup requires some funding to at least get started. That’s why you need to figure out if you’ll be approved for a business loan before your official launch.
You also need to figure out if you will have the funds to last you until your business makes a profit. You may need to financially plan for 6-12 months of operating costs before you earn back your investment. This is why you should overestimate how much funding you need before you earn anything.
Financial planning should include the cost of labor, marketing, and the cost to either create or order the product.
You will need to pay employees to help you build a business. You will need a marketing plan to drive customers to your business. You will also need to know the cost of designing the product.
You should also be aware of what your profit margin is after you start making money. Profit margins are how much you make after you put money back into improving the business.
5. Understand Your Role
The final part of what you should know about creating a startup is understanding your role in the process.
As the founder of a startup, you’ll want to ensure everything is done smoothly. You may want to be a part of every team in your business.
However, it’s important to identify whether you are more entrepreneurial or creative. When you identify your weak spots, it can help you hire other team members to close the gap on what your business needs. Finding people that are better at specific areas of your business than you are will help you build a well-rounded team.
The goal is to hire people who can both work for you and work better than you, so you can spend time on management, growth, and networking.
Creating a Startup Is Incredibly Rewarding If You Know What to Do
Creating a startup is difficult for anyone. It can be less difficult if you have a business plan, a team, and other critical parts. While there are roadblocks to any startup, you can overcome these roadblocks by being more prepared.
A startup can be very rewarding if you understanding the risks. If you understand them and take action to prevent them or bounce back from them, you’ll be ahead of a lot more businesses that have no plan in place.
Altogether, these five critical parts to creating a startup will give your business a better chance at succeeding.
For more information on startups, connect with me on my website.