5 Vital Steps to Take When Starting a Business

At the moment, there are more startups in the world than there have ever been before. However, the majority of them fail either within the first year or within the first three years. Validating your idea, making a business plan, raising funds and some other steps are no-brainers, however, there’s more to be done if you want to ensure the survival of your company. For instance, when planning to start a business, what you might want to do is take a look at some of the most common reasons why startups fail and then take the necessary steps of precaution to avoid them. With that in mind, here are the top five tips for you to follow.

1.      Make sure that there’s a market need

The most common reason why startups fail in such numbers is the fact that there’s no real market need for their product. Sure, they may be selling something that their audience would love to possess but are these potential customers going to pay for the product in question? This is something that needs to be answered before making your first steps in the business world. Other than this, try to check out your target demographics, while you’re at it.

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2.      Ensure that you don’t run out of cash

Another thing you need to understand is the fact that it’s incredibly easy for a new business to run out of money for operational expenses. Fortunately, there are two things you can do in order to make up for this. First, you need to ensure that you have enough money in reserve until your business becomes self-sustainable and you become able to create an emergency fund from the profit that your business reaps. Second, you need to have several contingency plans mechanics like applying for a business loan, payday loan, selling invoices, borrowing money from friends and family members, etc.

3.      Protect your Intellectual property

In order to ensure that your business and product offer is unique, you need to protect your intellectual property (IP). First of all, you need to register a business and get a trademark on your logo, slogans, and brand design. Before you do so, try doing some research in order to ensure that you’re not infringing on someone else’s intellectual property. Other than this, you might also want to get a copyright and even a patent for some of your products or inventions. Either way, the sooner you do this the better.

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4.      Gather an adequate team

The next step on your way to starting a company with a future is to select the right team. First of all, you need to determine the number of employees that you need/can afford. In general, 97 percent of Australian enterprises employ between 3 and 19 employees and, chances are, that you’ll be working with these numbers as well. Also, keep in mind that all the specialized tasks like IT, HR, customer support, accounting and legal services can and should be outsourced.

5.      Check if your product has a good price-quality ratio

Finally, before you start marketing your product, you need to make a prototype in order to see just how much it would cost you to deliver on the required quality. Keep in mind that once the full-scale manufacturing starts, the cost will go down, due to the fact that you’ll order raw materials and supplies in bulk and your team will become more skilled (as they gain experience). The difference in the cost of manufacturing/providing services won’t be that big that you can’t tell if you will be able to make this system work.

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By taking these five simple steps, you’ll ensure that your business is in a much better position and increase your survival rate within the first several years. The last question that you need to ask yourself is what kind of competition you’ll be facing. You see, sometimes, it’s not about being able to do something good, it’s about being able to do it better than others. Nevertheless, by tending to the above-listed five issues, you’ll stand a much better chance of making it so.