Entrepreneurship is a powerful trend around the world, so it isn’t surprising that a record number of businesses – from small LLCs in Texas to giant C-corps in Japan – are launched every year. With entrepreneurship spreading like wildfire, it seems there’s no end in sight.
In 2021, a staggering 4.3 million startups were founded—a 24% increase from the previous record set in 2019. And sure enough, in 2022, many more businesses will be started.
Most successful entrepreneurs like Elon Musk and Bill Gates are wealthy and very influential in society. But these guys only got this far because they were able to start, build, and expand their businesses.
So if you believe in your idea enough to start a business, you should also care enough to give in the little time to find out the tips that can make you start your business on the right path.
- Why starting a business isn’t always as easy as it seems
- Tips for starting a business
- Develop your brand image
- Do your research
- Secure your financing
- Choosing the right market
- Meet the needs of your customers
- Use social media
- Get the right partners
- Take it one day at a time
Why Starting a Business Isn’t Always as Easy as it Seems
Yes, starting a business is many things, but it’s never a rosy path, and only those who’ve started one or maybe failed at one will know for sure. Anyone who’s started a business understands that when a business is still an idea in mind, it’s capable of turning in billions, but in reality, the story is always different.
Business mortality has become more predominant in 2022, and that’s the highest it has ever been. And unsurprisingly, 20% of startups fail in just their first year, and 70% don’t make it to their 10th anniversary.
And while several factors like finance, lack of product-market fit, and the state of the economy can be responsible for these failures, getting the right knowledge about these challenges can provide insights into avoiding the biggest challenge of all; self-sabotage due to ignorance.
Tips For Starting A Business
Understand and Build a Powerful Purpose for Your Business
The journey to starting a business begins with finding a problem to solve. Plumbers fix broken pipes, fashion designers make beautiful dresses, and celebrities entertain their audience.
Anyone can start a business that they’re passionate about, as long as it solves the needs of their customers. But what differentiates truly successful businesses from mediocre ones is the brand they build around their product.
Building a brand for your business is clearly defining your business’s message and purpose in the market. Businesses with clearly defined brand identities like Nike, Amazon, Google, and Apple have it easier on the market as they can secure investors, avoid legal issues, win customers, and build a strong community for their business.
And the journey to securing a strong brand starts with getting the perfect brand name and fixing your branding elements. Your brand name is possibly the first and most important thing your audience will learn about your business, and so it must be perfect.
Brainstorming ideas for brand names with the help of a team or branding experts or even with the aid of a brand name generator is one of the best ways to get the perfect brand name for your business. But before you do this, be sure you’ve fixed your branding elements. And they include:
- Business Mission Statement: Consider what it is you want your brand to set out to do.
- Big ideas: What key concepts drive your brand?
- Business Motto: One catchy line that describes your brand and what you’re trying to achieve. Example: Just do it. Think differently. Finger-lickin’ good.
- Benefits: What special benefits would your customers gain?
- Industry specifics: What principles does your brand stand for in your niche and industry?
- Value proposition: What promise will your brand make to its customers.
- Story: Is there a captivating story behind your business that customers can relate to?
- Values: Does your brand represent any values you or your target audience hold dear?
- Emotions: What feelings should your customers experience?
Using Apple’s core values as an example, the company has successfully defined its mission in the industry as providing the best user experience, building top-quality products, and improving and empowering its audience. They’ve also identified and satisfied the other elements we mentioned. And this is why the company and the branding carry so much substance.
Understanding your brand elements gives your brand substance, character, and purpose. You’re no longer just a plumbing company, fashion house, or celebrity but a unique brand.
Do Your Research
Looking at an industry from the outside will never give you a full picture of what’s happening inside. This is why you need to discover for yourself what happens within the industry.
Now, the internet is a great tool to bridge the need for physical presence, but with the overload of information on the internet, be ready to go through a lot of trial and error before eventually stumbling on credible information that’s right for your business.
To truly know what’s happening in an industry, you need to be a part of that industry. It’s vital that you remember that researching an industry can be challenging for anyone who isn’t in it but a walkover for those with years of experience. So, prioritize any opportunity that exposes you to the industry’s inner workings.
The best research about your industry should be able to give you information on production, sourcing for raw materials, competitor’s advantage and weakness, as well as unfulfilled market demand.
Your research should also give you an idea of the amount of work needed to succeed in the industry and help you decide what areas demand much of your effort. Your research should also give you a clear insight into the approach to take when considering the brand strategy for your business.
Secure Your Financing
“Show me the money.”
Just like in the film ‘Jerry Mcguire,’ money is the one deciding factor for any startup’s success. But, the fact is that almost every startup either has no money or struggles with acquiring it. Overcoming this challenge in your journey is one testament to the viability of your business.
As we’ve mentioned earlier, startups fail at a staggering rate, primarily because of finance. According to some stats:
- The average capital for small businesses is 10,000 USD.
- 40% of these startups become profitable.
- 30% of them never break even.
- 30% are continuously burning cash.
- And ultimately, a staggering 82% of them fail because of cash management.
The startup world is like the ‘wild west,’ and most startups trying to outperform each other ultimately end up pushing others into ruin by oversaturating their sector. Remember the scooter wars? Most times, startups prioritize growth, talents, inventory, and CEO compensation and fail to meet their bank obligations or core services they promised customers.
And though it’s difficult to recommend a solution for financing challenges, we can learn a thing or two from the wisdom of Elon Musk, who has been very successful with several startups.
Musk’s Zip2 startup, which he founded with his brother, Kimbal, also had financial struggles. The pair made several personal sacrifices, including sleeping in the office and using the showers from YMCA in Silicon Valley.
They continued like this until they successfully built their first ‘mini-supercomputer,’ and that led them to earn their first major break, which was a $3 million investment from Mohr Davidow Ventures. This, in turn, led to a $307 million acquisition from Compaq.
What they did to help them secure this investment and gain the acquisition was to show passion, commitment, and resourcefulness. This approach, combined with sound cash management practices, can help your startup do better with securing financing and avoiding ruin.
Choose the Right Market and Don’t Be Afraid to Start Small
After identifying the problem you want to solve with your business, you need to also carefully choose a niche to focus on. The fact is, in almost every startup, capital, manpower, knowledge, expertise, and experience are all limited.
There’s only so much new entrepreneurs can do, so it’s best to pick your battles based on your strengths. When choosing a niche in any industry, you must ensure the niche is based on your strengths.
We often see new founders attempting to take on the whole industry, even though they’re completely incapable of handling it. And sometimes, they turn to fraudulent activities to keep up with the impossible standards they’ve set for themselves. We saw this with Theranos’s founder Elizabeth Holmes and Nikola’s founder Trevor Milton.
The most successful entrepreneurs started with something small and eventually grew to dominate their entire industry and not the other way around. Jeff Bezos started by selling books, Phil Knight started by selling imported shoes from Japan, Richard Branson started with a magazine business, and Elon and Gates started with writing codes.
Starting small doesn’t stop your business from growing into its future potential; you can still do the marvelous things you dreamed for yourself. And even though they started small, all these names we’ve mentioned own and control several businesses, and some of them are redefining technology.
Meet the Needs of Your Customers
‘The customer is always right’ isn’t just correct when you interact with your customers but also when they aren’t in the room. Customers can tell when a company sincerely cares about their needs and when they just say they do but ultimately don’t.
The success you’ll achieve, the profits you’ll make, and all the claims you could earn from your genius product and services all depend on how much you can impress your customers.
Customers are naturally cautious about trusting startups, so convincing them of your brand’s sincerity and authenticity is going to be your main challenge. And this is why it’s important to concentrate on building a wonderful product, branding your products and business, and marketing them well.
The best way to communicate your business to its audience is to give your business a trustworthy brand name. A great brand name will help your customers trust your business and its products, as it creates a great first impression.
Remember, the most successful startups have built their reputation with their brand name.
Use Social Media
One reason why major brands court popular shows or even the Super Bowl is to get access to their target audience. And today, social media provides this level of access to businesses.
Statistics estimate that 3.96 billion people use social media platforms, and a good fraction of this 3.96 billion can become your customers if you get your business active on social media.
Years ago, the chances for a startup to get the attention it needed to launch a product successfully were slim. In the early 2000s, entrepreneurs relied on innovators and early adopters to generate the much-needed attention for their products.
With social media, you can instantly link up with your ideal audience with little stress and less capital than those demanded by the Super Bowl. Social media can also help you build a tight-knit community with your target audience.
Social media can help every aspect of your business, even attracting employees.
Get the Right Partners
Getting reliable partners is an essential part of starting a great business. Let’s face it, when launching a business, most entrepreneurs are neither experts nor do they have all the financial might to back themselves.
Getting the right partners who believe in your vision and are willing to help you see their actualization is vital for success. The greatest businesses today were built on partnership.
Steve Jobs had a strong partnership with co-founder Steve Wozniak, Phil Knight had a strong partnership with his high school coach turned business partner, Bill Bowerman, and Bill Gates had a strong partnership with his mentor and friend, Paul Allen, with whom he founded Microsoft.
But, while trying to work on a partnership with friends and colleagues, tread carefully so you don’t get ousted from your jointly-owned business like how Elon was kicked out of PayPal by his partners during his vacation.
As an entrepreneur, you should build partnerships based on mutual trust, fairness, and achieving worthy goals. This way, you can attract excellent talents who share your vision.
Take it One Day at a Time
We won’t deny that following these tips would not be an easy experience. But consistently investing your time, efforts and resources would help you craft a solid business. Trust us, it will be difficult, but the struggle is always worth the effort.
Grant Polachek is the head of branding for Squadhelp.com, 3X Inc 5000 startup and disruptive naming agency. Squadhelp has reviewed more than 1 million names and curated a collection of the best available names on the web today. We are also the world’s leading crowdsource naming platform, supporting clients from early-stage startups to Fortune 500 companies.
