Are you thinking of starting a business? If so, I must tell you that there is no better time other than now. When you are reading this blog, around 300 million start-ups are getting prepared for launch.
Unbelievable isn’t it? The world of business is changing around us very fast. Never before has such a vast opportunity existed for individuals to be in business- be it small or big. The trend in many countries like India and China is shifting from a service-based market to an entrepreneur-based market. What is the reason for this change? The business world is getting close thereby increasing market access without effort.
Today there is an opportunity for a person sitting in a village in India to set up his business and sell his products in any other part of the world by himself. The world is now open from a single manned unstructured business to a multimillion unicorn business. In today’s world, there may not be any qualified youngster who might not have thought about a start-up at least once in their lifetime- no matter whether they executed it or not.
How can one prepare for a start-up? For that, one needs to study the experiences start-ups encounter in their journey. Startups have an evolution trend, a trend that is dependent upon environmental conditions. The methods and processes followed by a startup a decade ago are much different from that of today. There are specific verticals and sub-verticals in start-ups today.
Let’s find out how you can initialize a successful start-up. What should you do once you identify a solution for a problem which can be converted into a business model? How will you get it into a proper business?
#Five preparatory steps before launching a start-up:
- Conduct pre-launch surveys
- Speak to business owners – take feedback
- Prepare a prototype or do a proof of concept
- Do competitor study
- Identify your core team members
My experience in mentoring start-ups for two decades reminds me of companies that did proper market validation before initiating their product. A proper market validation increases the success ratio of your idea by 50%. Market validation of your product is so critical, it defines where your business idea stands in the market. There are various methods of doing market validation.
The easiest way is a business survey. While you survey your business idea, you have to involve your expected customer base. A successful survey should result in collecting the following pieces of information:
- What should be your final product?
- How do you expect your deliverables to change an ecosystem?
- Can your target audience relate your business model to any other identical business in the market?
- How much they will spend on your deliverables?
- Do they think your deliverables are unique?
- How does your target audience address your deliverables otherwise?
- Do they think, your deliverables are a must-buy for them?
Surveys are not a one-time activity. It needs to be executed regularly, specifically in your target market in periodic intervals to identify the credibility of your idea. Group your surveys based on the results. You have to make sure that the survey set is substantially large so that you get the correct validation.
There may be people known to you who are in business, who can share their thoughts and views on your business ideas. Select a few of them who have initiated start-ups before- no matter whether they are big or small. They can share their experience with you regarding what worked for them and what did not work- you will be able to relate this to your business. Your approach should be to get evidence for your business.
Find out whether they can validate specific concerns. Don’t get into conformity mode based on their feedback- you know your business better than anybody. Listen to them and find out what improvisation can be made on your idea
Some ideas can be prototyped- A miniature version of your deliverables that can be explained better to your customers or referrals. The miniature version doesn’t need to be the replica of what you want to build. Prototyping is done to have a feel of your deliverables to your customers. In the field of information technology where there is no physical deliverable, it’s also called proof of concept (POC)- A demo modeling created in the software or a short-term service given to the customer to check the efficiency.
This approach will make a larger significance in validating your deliverables. Your advanced surveys can also be based on this prototyping of POC modeling.
If your solution is not in a niche space and has competitors, you must thoroughly study the competitor market. What is the success of the competitor and what market they are targeting? This also helps you in adding unique characteristics or features to your product line when you hit the market.
If you have a customer who is willing to develop the product using your solution expertise gives you a real advantage in validating your product. This is one of the most proven methods which I have experienced while coaching startups. There are cases where investments have been done by such customers in scaling the business model to a larger market.
The above-mentioned are a few proven validating methods that I have successfully established. Many other validation methods are mostly depending on your business ideas which can be executed successfully. Your ultimate goal should be a successful validation of your business idea.
The next step after validation is to search for like-minded people who what’s to join hands with you. Your primary team plays a very important role in taking your business to the next level. Hence your core primary team must be experts in their respective areas and you need to get committed work from them for a longer period. Keep in mind that they are people who will be building your organization and driving your business.
Once your primary team is set, complete the compliance and regulatory criteria involved in the business. Legal compliance is very important for your investor. Starting a business without proper legal compliance leads to unnecessary hassles which can even lead to its failure.