Starting a business is an interesting journey as long you know what you’re doing. It is necessary to have identified the need your product is filling in the market and who your target audience is.
These are the basic factors every prospective entrepreneur needs to consider before trying to build a thriving startup from scratch.
1. Identify a problem you want to solve for a particular customer segment
It is true that building a startup begins with finding solutions to a problem in the market. However, one company alone cannot provide all the answers, and neither can a single startup focus on solving the needs of everyone.
Hence, it is imperative that an entrepreneur streamlines the total available customers into market segments and selects the one specific group their company will concentrate on producing for. In addition, there are so many needs in the market so trying to play Superhuman by solving all the needs will only make your business directionless.
Before starting any business you need to sit down and determine answers to the following questions:
Who are my target customers?
Am I targeting the right users for my product or service?
What is the problem being faced by my target audience that I want to solve?
What will my customers gain from using my product or service?
2. Validate your solution with the market
Market study and extensive research are very important to know if the problem you have identified is indeed a problem being faced by actual people.
Also, what percentage of people are ready to pay for the solution. What is their buying pattern? Income bracket? Is the total addressable share large enough to keep your business profitable given the costs? What is the average competition analysis?
These and many more questions will be answered when you conduct a proper survey of the market segment you want to satisfy. Of course, there are unpopular solutions that only a few people need, such businesses do not require a large market size. Your product only needs to fill a tangible need in the market to be successful.
3. Define what makes your startup different from the competition
Your unique value proposition is the competitive edge your startup has over other businesses in the same field. It is what makes you stand out from the crowd. Your UVP could be anything from incorporating new technology to unique product features to customer relations.
Definitely, there will be fierce competition from other companies offering similar products or services as you, most of them are market leaders who control the majority of the market share. So as a prudent startup owner you need to anticipate this reaction and define what makes your startup unique.
What new value are you bringing into people’s lives?
Why should investors bet on your company’s growth?
Why should your customers buy from you instead of your competitors?
4. Develop your business model
A business model is simply how you plan to make money from your startup. This revolves around the pricing structure of your goods and services.
Can your target audience comfortably afford to buy from you? What is the price ceiling and price floor of your products with respect to total costs? Are you going to make profit if you charge a specific amount?
5. Get out there and take massive action
- Work with a viable business plan: Also called a business map, a business plan shows you which steps you should take to realize your business projections for the nearest future.
Starting a business without a business plan is like taking a long road journey without a map and no GPS. You might get lost before you even know it. You need a viable business plan in your journey toward building a successful company because it expresses clearly your goals alongside a clear pathway to achieving them over time.
- Build a solid team: To build a thriving startup, you need to surround yourself with dedicated, committed, and impact-focused people. The right people will build the company because they share your vision and passion.
Take care to hire people of character, integrity, and transparent behavior. You can also embrace remote work and hire global talent to boost talent diversity. Employ people who are great at what you suck at. If you are good at coding but terrible at handling sales or doing marketing follow-up, then when hiring look for skilled salespersons who will complement your weakness and make the team a balanced one.
- Build your MVP: The concept of a minimum viable product is the least set of product features you need to have before you can start operation. It is like sampling your product with the minimum features so it can be used to test the market, showcase a product to investors, calculate costs and usage data, or simply illustrate what the final product looks like.
An example could be a UI design of an app for a mobile food delivery store. An MVP is not the original but made to look like the end-product with only the least operational features.
- Invest in an official website: A website serves as a major branding tool, especially for new startups. This is the era of internet businesses and online companies so yes, you absolutely need an official website amongst other things to build a scalable brand.
Your website should contain valuable information about what you do, why you do it, and for who. Also, share your core values and guiding principles as a company, as well as your contact information and other media platforms you can be contacted on.
- Select marketing strategies that will sell you to your target market: After highlighting your target market as a startup, your next focus should be on how to get them to buy from you. If your market assessment is correct, this will not be difficult at all.
Marketing strategies are all the combined efforts to get your product known, liked, and trusted by potential customers. Sometimes, you might have to conduct a little experiment to know which strategy works best. The best marketing strategy is the system that brings more traffic to your product or service. When you have found the most effective strategy, your job is to put the majority of your available resources into validating the system.
6. Gain tangible traction and reach out to investors for funding
Technology startups need a lot of funding to be able to grow, expand and scale into big-time companies. As a new startup owner, you need all the financing you can get to push your business off the ground.
No matter the stage your company is currently at, you can still reach out to Angel investors and Venture capital firms for capital investment, which is usually in exchange for a small equity stake. Angel investors mostly fund idea-stage startups while VC firms usually fund growth-stage companies (with a few exceptions) but their investment is higher than that of angels because of the lower risk attached.
Apart from funding, these firms also provide other benefits like close mentorship cycles, access to entrepreneur communities, speed networking, industry expertise, and technical support, for startups to leverage on.
There are other growth and funding opportunities new startup owners can also harness such as business accelerator programs, incubator programs, crowdfunding campaigns, business grants, bank loans and business credit, and so many more available options.