How to Build a Profitable Start-up?7 minute
Turning your Business Idea into a Profitable Start-up
Have you ever read a business success story and wondered how did they get there? Well, we all have, right? It might look all glitz and glam on the outside, but let us tell you, starting a business isn’t a walk in the park. Every business owner irrespective of their company size may have waited several years before they landed that big break. If you want your company to thrive and flourish, and not get lost in oblivion, your idea in the first place has to be pretty darn good.
Since you’re here to understand how to build a start-up from scratch, here’s a little disclaimer that will help you go a long way in this journey:
Building a start-up is something that takes time and requires utmost patience with never-ending commitment. Don’t expect your idea to materialize overnight. Halfway through building your start-up, you may also want to give up. However, if you believe in your idea and vision, and wish to savour success, take one step at a time.
In this blog, we will be discussing the perfect recipe to build a profitable start-up. You can expect a whole lot of realistic tips and tricks that will save you from any kind of disappointment in this journey.
Starting-up a business is exciting. Let’s get started!
Step-by-Step Guide to Launch the Start-up of your Dreams
1. Start with an Idea
It all starts with the development of an idea. It can come to you at any time. Maybe while you’re working, on your daily commute to work, when you’re hanging out with your friends or when you’re laying in bed at night. There’s no specific time when a start-up idea can come to you. Various experiences and encounters in day-to-day life become catalysts of most start-up ideas. However, just having an idea is not enough. Even before you discuss your idea with anyone or weigh the profitability, ask yourself if it will really work.
Everybody has a gazillion ideas. However, very few are worth converting into a start-up. First things first, your idea should solve a problem you are passionate about. Ask yourself if your idea or product is something your target audience will resonate with. A successful start-up idea should be durable (provide value over time) and sustainable (fulfill the idea over a period of time).
When you are passionate about an idea, you’ll be in a better place to commit all your time and energy to it. Passion will also help you explain your concept or idea to investors. When they see you possess a zeal towards your idea, they’re more likely to get onboard.
2. Find Validation & Explore the Market
As mentioned earlier, the purpose of your start-up should be to fill a need, solve a problem or address avoid. There has to be a solid reason why people should care about your business. And, for this, understanding your market is a key to success. Check the market to see if there is already a product or service similar to yours. Perform stress tests, talk to people and check if your idea is really viable or not. Never start anything you’re not familiar with.
Also, before giving wings to your idea, understand your competition. If there is a company similar to yours, check their strategies. This will really help you assess and make you understand if your idea will stand out in the market or not. Another way to understand your target market is by creating a focus group that involves a small group of consumers. Conduct surveys and get product/service feedback from consumers who’ve already tried out your offerings.
3. Share your Initiative with Others
As a potential start-up entrepreneur, you may be reluctant to share your idea with others. You may be apprehensive about someone hijacking or implementing your idea. Well, if you have such kind of fear, it only shows that you’re under-confident in the uniqueness and superiority of your idea. Instead, ditch the fear and realise you are the business. For your start-up to thrive, it is YOU who has to go out there and convince people of your business model. Instead of focusing on someone who will steal your idea, work towards introducing techniques and approaches that will give your business a competitive edge in the overcrowded marketplace.
4. Decide Money Matters
Focusing on your idea and development is crucial but more important than that is sorting out funding. Whether it’s building your business or creating marketing and promotion strategies, you need funds. If it’s you and a friend starting up something new, you can even bootstrap your business. However, if it’s bootstrapped, don’t be under the pressure to have everything at once. For example, a swanky office, the best technology and a phenomenal team. Instead, wear multiple hats and execute small as well as big tasks. When you have enough funds, maybe then you can think about hiring.
If you don’t intend to bootstrap your business, you will have to get investors on board. Although it is not compulsory, it is essential and will help you thrive in the long run. Since money and resources are the fundamental part of any business, you can choose to get an active or inactive investor onboard.
An active investor is one who knows the Ins and outs of your business. They are actively involved in most processes, particularly those that involve revenue and profitability. On the other hand, an inactive investor is one who knows nothing about your business.
Getting an investor on board is a tricky space. You need to impressively be able to pitch your idea to them. The best way to go about this is by speaking to seasoned entrepreneurs who have already raised funds. They’re likely to share crucial tips that will help you get an investment.
As soon as you create your new business or start-up, you should start building relationships with potential investors. Keep them in the loop that you have an exciting start-up idea coming their way. If your concept excites them or if they see potential in it, they’re also likely to follow up with you.
5. Create a Great Team
If you’re building a start-up, creating a great team is imperative. We’re not saying build a big team or build a small one. All we mean is just having a handful of people whom you can rely on to take your business to the next level. Your people will be the backbone of your company and your biggest advocates. They will go out there and tell people about your products and services.
However, one of the biggest difficulties you’re likely to encounter when setting up a team is hiring permanent staff. There are two challenges here: Finding the right talent and allocating funds. Paying employees every month can be stressful especially when you’re new. That doesn’t mean you refrain from hiring.
There are two routes you can take. You can outsource various processes such as digital marketing, product development and web development to an agency. However, in the long run this may not work as they’re not going to be predominantly involved in the growth of your business. It could starve your start-up of the attention you need.
Another route is working with freelancers. These days there are freelancers for every profession. There are various platforms that offer respectable technicians who offer top-notch services. You can check one of them.
6. Work towards your Customer Base
Regardless of your industry, customers are the life and blood of your business. Without them, your start-up will cease to exist. Once you have officially launched your company and promoted it, the next step is to build a successful business. For that, you need real people. The cost of acquiring new customers can be pretty high. Therefore, we suggest initially you follow up with your focus group and create touchpoints. There will be people who have used your product/service initially. Therefore, speak to them by sending out surveys and understand what they think of your idea. Since your company is new, they’re most likely to give honest feedback too. Here are few more tried-and-tested tips to keep them in the loop:
- Send out monthly newsletters and limited-time deals
- Once you have studied your target market, use the right marketing channel to advertise your brand, product or service
- When you’re new in the market, you have to do it all to entice customers. The best way to do this is by offering some kind of irresistible privileges such as loyalty cards, reward programs and so on.
7. Be Flexible
As a new start-up, you cannot expect a bed of roses. There will be a few roadblocks and challenges you will have to deal with. We suggest that you take every criticism that comes your way with a pinch of salt. However, trust your original idea and vision. If your customers have feedback and believe certain things in your product or service should be changed, listen to them. Prioritize and debate which feedback is the most useful. Think about your company’s future and speak to your team members. If there is particular feedback that makes sense and is viable, you might as well test the idea and incorporate it in your soft-launch stage.
8. Patience is Everything
The secret to building a profitable start-up is having loads of patience always available. Remember, success is not something that happens overnight or not even until a couple of years. Studies reveal that most companies achieve profitability in the third year of business. Every company is different and success may take months or years. Apple is the biggest example of this. The company was established in 1976 by Steve Jobs but it was not until 1984 that the company tasted the daylight of success. Even in the 90s, they struggled till they introduced consumer products.
As a new entrepreneur and start-up founder, having patience is vital. Start by creating a welcoming and motivating company culture, achieve tiny accomplishments along the journey, and have endurance and patience till the big moment comes your way. A common reason why start-ups fail is due to the lack of patience by the founder(s). Believe in your idea, be flexible to change and your chances of tasting success will increase.