While every great business starts with a great idea, successful businesses are built on more than just a concept. Turning your idea into a business takes hard work, an ability to effectively communicate what your business has to offer, and a whole lot of paperwork.
In this month’s post, we’ll go over how to turn that great idea of yours into a startup.
While the backbone of a great startup is a great idea, you need to turn that idea into something actionable if you want it to be a successful business.
Once you have an idea you think is worth exploring, start developing that idea in tangible ways.
Get a sense of what the current market for your idea looks like. Answer these questions when conducting your research:
The larger question you’re answering with these questions is where can you differentiate yourself in the market. Where is there an opportunity for success?
Remember, not every market is necessarily going to have opportunities you can take advantage of. One of the key attributes of a good startup founder is the ability to look at a market and know if their idea fits within the current landscape.
Where many startups (and small businesses in general) falter is in the creation of their business plan.
Almost any funding you receive will depend on the strength of this plan, so make sure it’s good. Your business plan should include:
Once your idea is developed and you know the direction you want to head, it’s time to pitch your startup.
You will need two things over all else:
Even if you have a great idea, if you don’t know how to sell why it’s important for your audience to pay attention, then it won’t matter.
While it’s not the most fun part of starting a business, making sure you are operating legally will save you headaches (and fines) down the road. Remember, it’s always a good idea to hire legal counsel to help you legitimize and legalize your business.
Depending on the goals of your business, there will be different options available. A couple popular ones:
Registering with the IRS and receiving an EIN is a necessary step all businesses must take. Depending on your business’s structure, the process for this will vary.
EINS are necessary for…
Registering with your state and local municipalities is a separate process, but also necessary. Contact your local revenue authorities to find out how to register.
A big mistake many new businesses make is using their personal bank accounts for their business. Not only does this make things more complicated come tax seasons, but it will make your financial outlook hard to decipher.
When going to the bank to get your account, make sure to bring your:
A separate account will allow you to easily decipher business and personal expenses, while allowing your business to operate professionally from the beginning.
If your startup is dependant on any intellectual property you or your team has created, make sure to apply for a patent. Not only will this keep you safe from any accusations that you’re infringing on someone else’s IP, but it will help you when trying to secure financing. When filing for patents, make sure to file…
Talk with a patent lawyer before filing anything with the United States Patent and Trademark Office.
Starting a business costs money. When growing your business, you don’t want to skimp on costs where it’s important. Funding is crucial for the fragile health of your startup.
There are a couple primary options to consider when determining how you’ll fund your business:
While it would be great to start off with investor money, this is not achievable or realistic for everyone. Due to this reality, going at it with your own funds is often necessary.
Bootstrapping entails using methods such as:
While not ideal, bootstrapping is a great way to get a startup off the ground. Almost no startups are given loads of money to start, so as a founder you should expect to have to sacrifice some of your own cash and labor.
If you keep it simple to start, you can work your way to more advanced forms of financing that will let you utilize better marketing and product development.
A common way to finance your startup is a small business loan.
These loans are a great option for business that can turn a profit immediately (or as close to immediately as possible). Since you’ll have to start paying this money back quickly, it is not ideal if you don’t think your business will be profitable in the short-term.
Equity fundraising involves the selling of stock to raise capital for your startup.
Given that you don’t have to risk your own money or make debt payments immediately, equity fundraising is a great option if available. It’s particularly great for startups needing a lot of runway to become profitable.
They do have some downsides, however, as you will be losing control over your company, and potentially some decision making, as you sell more stock.
A recent trend among startups is the concept of crowdsourcing your startup capital.
The concept involves raising money through an online platform such as Kickstarter or GoFundMe. You generally set a fundraising goal, offering different products, services, or prizes depending on how much a supporter gives. A good way to look at this method is as a pre-sale for your product.
Crowdsourcing is great, as it gives you money to start your business (without giving up equity) and confirms there is interest in your product or service.
Make sure your startup is ready to hit the ground running.
Once you have developed your idea, become a legal entity, and have secured funding, it is time to get ready to get your business out there and establish a presence. The best way to do this? Using digital strategies.
Make sure you can be found online.
The bedrock to any good marketing effort is a well built website. Services like Squarespaceand WordPress offer templated solutions that can help you develop a basic presence in just a few hours. Additionally, set up profiles on Facebook and Twitter so you reserve your brand on these sites and set the groundwork for advertising opportunities.
If you are planning on selling products online (or even just want to bill for your service-based business using the web), make sure that you are able to accept payments online.
Services like Stripe and WePay offer customizable solutions to accept payments that can be integrated with all types of websites.
When looking for an online payment solution, the most important things to consider are:
When dealing with a limited advertising budget, make sure your advertising dollars are spent efficiently. Facebook advertising allows for advanced targeting of users so that you can get your product in front of the exact right people.
Targeting options include:
This lets you get your startup in front of people who are actually interested in what you have to offer.
Good talent will make or break a business. Unfortunately, when first starting out you won’t have money to build a massive team. This increases the importance of every team member that you bring on. Make sure anyone who you bring to work with you…
It’s also important to remember to not overextend your startup capital and hire too many people at first. Employees cost a lot of money and require salaries, benefits, and office space. If you can get away with production from services or contractors instead, make sure to explore those options.
A good accounting partner will allow your business to hit the ground running from a financial position of strength.
Intelli Bookkeeping is a cloud accountant you can trust. As a cloud-based financial partner, we cost less than hiring an in-house accountant, while providing the range and expertise of a full-services firm. We…
Best of all? We can scale with you and know how to help you grow your business.
Contact us today to learn more about what we can do for you.