What are the forces that trigger the birth of a startup?
Money is a good answer, but far too easy to guess. And the realities of startups have witnessed it flowing in either direction.Inspiration is a stronger force making up for many of the yet to be figured out details. An inspired mind is richer than an idle millionaire. That felt like a wisdom dropping. Feel free to quote please!And finally, the desire for innovation. To create something unique, reinventing something old or adding a new dimension to an existing product, or service.
These are some of the compelling reasons that lead individuals to exhibit their enterprising self. India is turning out to be the place to be around with a startup story to tell. It is now ranked third in the world, after the UK and US, with the number of startups predicted to rise to 10,500 by the year 2020, according to a Nasscom-ZINNOV report. And with funding available from venture capitalists, angel investors, the startup drive initiated by the Indian government, and crowd funding opportunities, life has been quite favorable for entrepreneurs. With well over a hundred incubators, starter uppers have enough resources to lead their projects towards the light at the end of the set up tunnel.
But what are the essential steps towards a successful business? Is it the idea alone? Is it capital? Is it about who is in your team or is it a mix and match of some, all of the above or more? Read Myths about starting your own business.
Let’s find out.
The biggest, most important piece in the inception of a new business is its idea. If you are convinced that you have a brilliant, and not necessarily unique, idea then the next step is to find out what of it?
Idea is simply the first step.
Take the example of the 90s disaster startup, the long forgotten BOO.com in the UK. It was a novel idea for its time. The website was designed as an online fashion store. The only hiccup was that baby internet was just learning to walk. It was a course designed to show how to burn through $135 mils in two years.
Idea is important, of course. But so is timing and identifying your target.
So right after you wake up with that Eureka yell, get to doing your ground work – your Market Research. Ask the right questions.
These are the right track questions that offer a deeper insight into your serendipitous moment of This sounds great. Let me make a business of it.
The better move is to ask the questions and get expert help to seek the answers. You may turn out to be the unluckiest dude unable to realize that your product/service already has someone else’s copyright, or is illegal in 13 states, before investing all your capital in setting it up. Talk to engineers, legal consultants, accountants and other experienced business owners on what you might be stepping on.
Yes, this is that infamous business plan. But in its defense, it doesn’t have to be a 1000 page long manifesto. However, it should be like a roadmap to make your business easier to handle. Your market research, your strategies, market potential and all the other seemingly annoying, and yet important, details. The devil is truly in those details as you will most certainly realize once you begin to translate your dream idea to reality. Identify some of the key players in your business fruition.
These plans are not just a thick folder to present to investors, but rather also a complete guide for you to move forward. Keep it dynamic and record the updates as you and your business evolve. Read How to create a business plan.
Where will you locate your business? Location plays an important role in your marketing/advertizing strategy from its visibility aspect, your transportation and warehousing budget, availability of resources in the area, utility costs, and the general commercial perception of its surroundings. Your business budget needs to factor in not just the cost of renting a place to run your business, but also the costs to keep your business operational while operating from that address.
If direct walk-in type clients or customers are not essential to your business, or you don’t need immense amount of inventory, you might as well start in your garage. Many tech giants have been born that way.
The next step would be to register your startup as a legal entity. There are a few known types of business.
The vakaalat speak of all the different forms of registrations needs an article, or ten, more. If you are especially interested in availing the StartUp India Action Plan, you will need to register your startup as either of a Private Limited, LLP or an LP.
How to get the money to get things done? If you are a Tata ka Pota, you can skip ahead to the end. For the rest, find out the ways you can raise capital to run your startup.
And of course there is that aforementioned government StartUp initiative that needs your business to be less than 5 years old, with an innovative idea, tons of recommendations and other requirements that you can get. Read What investors look for in a startup.
Alright, that was a quick abridged version of how to go about setting up a startup company. The risks are phenomenal but, if successful, so are the rewards. So if you are a thrill seeker, can handle a fair amount of stress until your company makes way, and have an incredibly smart idea to commercialize, keep doing your research to father, or mother, a new business of your own.
Until then, dream big and take the small careful steps to make it happen.
Here’re some entrepreneurship blogs for gyaan.
–How this blind student built a 50 Crore business in India
–Advice, to Startups, from IITian Entrepreneur turned Venture Capitalist
–Life lessons from an Entrepreneur
–NYU dropout to owner of an Educational Startup
–Skills any Entrepreneur should have