Managing your own business without prior experience or capital may seem like a fantasy, but recent studies suggest that successful leadership requires more than experience and money!
As good as running your own business sounds, it could also be quite difficult, as statistics from the Bureau of Labor Statistics in the United States shows that 50% of the country’s small businesses fail in their first four years, and entrepreneurs are also more concerned than others and suffer more daily stress.
But here’s the good news; Starting a company can be one of the most rewarding, exhilarating and interesting opportunities you’ll ever get. It’s certainly worth the risk.
1. Identification of profitable ideas
A successful start-up is but an idea, and surely you can’t start a business without a good idea.
Ask your friends what frustrates them. What makes a product or service profitable? You need to provide a solution to a problem for people. Chris Ricobono produced his own collection of T-shirts after getting frustrated with how wrinkly and ill-fitting his regular button-down shirts were when he didn’t tuck them in.
Get inspired by other emerging startups. Checking out what other people have come up with can be a great way to kick your own thought process into gear.
Identify trends to future-proof your idea. As the world changes, people need different products. As an example, the rise of Uber, Lyft, and other ride-sharing apps created a demand for a third-party app that will tell you the cheapest fares at that exact moment.
2. Identify and focus on a growing category.
Licensing expert and intellectual property strategist Stephen Key recommends picking a category that fascinates you but isn’t overly competitive.
“I avoid industries that are notoriously challenging, like the toy industry. There are so many people creating in that space,” he explains. “You will have an easier time licensing your ideas if you focus on categories of products that are growing as well as receptive to open innovation.”
After you’ve picked a category, Key says you should study all the products in that category, in terms of the benefits of each product, packing strategy, marketing, audit opinion, potential improvements, etc.
3. Take advantage of the gap
You don’t need to reinvent the wheel if there aren’t enough wheels. Many people start successful businesses after noticing a gap in the market. For example, perhaps you learn there’s a shortage of high-quality sales outsourcing. Since you have experience in sales development and account management at early-stage sales companies, you might decide to offer this service to tech startups.
4. Make something better (or cheaper) than what’s out there.
You don’t always need to develop something brand-new. If you can offer an existing product at a lower price point, better quality, or ideally, both, you’ll have plenty of customers.
5. Validate your startup idea with buyer persona research.
You’ve got an idea. Don’t quit your job yet. Before you go all in, you need to know other people will actually want your product.
In order to safely gauge the viability of your product in the market, start by understanding your buyer persona, i.e. the real people you plan to sell to. If your product doesn’t serve a need, they won’t be interested, no matter how innovative or cool it is.
Once you’ve identified your ideal client, interviewing people who fit the bill should be an important component of your research. Show them a working demo of your product, ask what they like and what they don’t, how much they’d pay for it, how often they’d use it, and so on.
6. Start with a minimum viable product (MVP).
Let’s say you want to build an app that will connect college students with virtual tutors. You might create a bare-bones version, manually invite 150 tutors you found online to join, and then post the link to the app on the local university’s Facebook page. If you get a decent number of sign-ups, that’s a sign you should move forward. If you get barely any, you should either rethink the idea or start fresh.
7. Create a business plan.
A business plan is a formalized document that details your business goals and the steps you’ll take to achieve them. This may include marketing strategy, budget, and financial projections and milestones.
As an entrepreneur, your job is to set your company’s mission, vision, and long-term and short-term goals. As you do this kind of strategic planning for your venture, the business plan is an output of your work and helps to guide the growth of your startup.
8. Continue to iterate based on feedback.
Keep in mind that your MVP will not likely be enough to stay competitive in the market categories you choose, especially if you have big dreams for your startup.
Now comes the cycle: Generating interest and demand (marketing the product), securing customers (selling the product), gauging satisfaction, improving the product based on feedback… and repeat.
9. Find a co-founder.
Conventional wisdom says you should look for a co-founder when starting a new business. There are three main advantages to having a co-founder.
1. It’s easier to get funding, whether or not multiple founders actually contribute to a company’s success.
2. You have emotional support. Running a company is a stressful, exciting, and unique experience. If you’re riding the emotional roller coaster by yourself, you won’t have anyone to celebrate with during the ups — or survive the downs. A co-founder understands exactly what you’re going through and makes you feel less alone.
3. They can provide different skills, knowledge, and connections. Maybe you’re great at selling, while your co-founder is more technical. You’ve got lots of connections, and they’ve actually started a business before. Picking a co-founder with a complimentary resume is an excellent way to boost your odds of success.