We get it. Entrepreneurship is hard. It takes a lot of dedication and planning to get your startup up and running, and it takes even more work to maintain a successful business model. Truthfully, many people get it wrong by failing to prepare properly in the beginning stages of creating their business and repeating mistakes when they decide to try again. Entrepreneurs with successful startups have a working knowledge of industry best practices, a reliable and knowledgeable network of contacts in their industry, and possess a great sense of direction or purpose for their startup ideas.
Sound like a lot to handle? Never fear; we’ve compiled some advice to help you reduce the risk of failure and generate higher returns.
How do I get an idea for a startup?
The first step to creating a winning business idea is to identify a problem worth solving and create a solution. All successful startup concepts come from actively listening to complaints and identifying issues with existing solutions that potential customers are experiencing. The best way to generate ideas is to start asking questions. Start with what you know. Pick an industry and a service or product that you understand and compile a list of people’s complaints about that industry, service, or product. Reach out to family, friends, and even past coworkers or bosses to get their insights and opinions on these issues. All of this research is key to identifying the pain points of your future audience.
After doing your proper research, determine which problems you can solve based on your unique skillset and knowledge base. Ask yourself, “What are my strengths? And how can I help?”
The good news is, your idea doesn’t always have to be brand new. You can always improve upon existing products or services. Here are some examples:
- Finding a gap between 2 existing products where neither is quite right. Remove complexity from an existing process
- Discovering a new application for a product or service that is already widely used
One of the most inspiring successful startup stories comes from the founders of Airbnb – Brian Chesky, Joe Gebbia, and Nathan Blecharczyk. These three guys started by renting air mattresses in their apartment and then turned that idea into a $31 billion company. By identifying issues within the hospitality industry, the founders of Airbnb were able to create an innovative business model that has revolutionized people’s travel experience.
How to start a business plan
Once your idea is better defined, then it’s time to start building a business model. We recommend the use of the Lean Canvas as a tool to model your idea. In its apparent simplicity, it captures a holistic picture of your business model, not just the product you may want to build. You will be able to answer What Problem am I solving? Who cares and will they pay for the solution?
Over time, your business plan will fill out and begin to describe your product or service in great detail. You will have a Minimum Viable Product as well as mock-ups, samples, live demonstrations, and testimonials. Make sure your business plan is filled with clear assumptions and accurate and reliable data that backs up your claims. Your business plan should also include information on your operations, finances, and market analysis.
Creating an in-depth business plan is essential to getting the financial support you need for your startup. Investors are more likely to give funding or loans to businesses that can clearly explain how they will use the money.
How to build a startup team with no money
Funding can make or break a startup. In fact, an estimated 29% of startups fail because they run out of money. So what do you do when you have no money to offer upfront?
First, you need to discover precisely how much money you need to get your business started and keep it running. You will need a concrete financial plan in place before you can even pitch your ideas to potential investors.
Once you have a good idea of your expenses and cash flow, you should implement tools such as QuickBooks to help you manage your financial planning and stick to a budget.
Like most things in business, the key to raising funds is networking. Find mentors who are willing to show you the ins and outs of the industry you want to serve. Reach out to your existing network and enlist their help in spreading the word. Identify influencers in your space and begin making connections. Growing your network and creating partnerships are both crucial to the success of your startup.
Once you’ve successfully nurtured your relationships and generated a solid financial plan, then you can start sourcing funding from resources such as angel investors, venture capitalists, friends, family, and bank loans.
Connect with Next Studios to bring your business ideas to life
We know that all of this can sound completely overwhelming, but the good news is that you don’t have to do this all on your own. Next Studios is a venture studio comprised of experienced entrepreneurs dedicated to helping visionaries shape their ideas into thriving businesses. We are the first Benefits (B) Corporation venture studio in Indiana, and our model is designed to support our community’s entrepreneurial ecosystem. Check out our NEXT Community and NEXT University programs to learn more. Feel free to reach out to us any time. We’re looking forward to creating with you.