The 4 Essential Building Blocks For Creating A Startup
There has never been a better time to be an entrepreneur than right now. There are so many tools at your disposal that simply didn’t exist a few decades ago that can help you build and grow a business. This isn’t to say that success is guaranteed because of technology or the help you have available. Nor does it mean that success, if it comes, will have been easy.
There are still many factors that go into creating a successful business that doesn’t really change. It still takes a lot of hard work, dedication, and perseverance to get a business off the ground. In this article, we will go over several of the basics that need to be done to build the right foundation for a startup.
1. Pick the right location
There is a delicate balancing act between finding a location that is affordable, but at the same time will be attractive for workers who want to live there. Often the places where a startup could launch are quite expensive. This can hurt your ability to keep the costs low in the beginning to be able to go through those lean years.
Silicon Valley is one of the most expensive places in the world for real estate. It would be very difficult starting a bootstrapped business there. However, that is where people who want to be part of a startup generally prefer to live.
Luckily, there are other areas of the country that offer many of the same benefits of a place like Silicon Valley that cost a fraction in costs. What a location needs is a highly educated and informed workforce to choose from, a good infrastructure to make sure that the building has all the technology it needs, and a city where a young workforce will want to live.
Utah Silicon Slopes is one such place. The area is affordable for both the company and for the employees to live. It doesn’t have a big city atmosphere like San Francisco, but for those that like great weather year-round and prefer outdoor activities to city living the area is ideal.
Utah has quickly become an area that is a tech hub for those that want a different kind of ecosystem for startups than Silicon Valley. It has a young and highly educated workforce to choose from. And it is an attractive area for recruiting others to come and work for your company.
2. Don’t waste money but don’t be too frugal
At the beginning of the startup’s life, it is important to save money where possible. It is wise to go for a lease for the building that is not too much costly. Going with a lean startup staff to avoid high payroll is very common.
However, there are times when you just have to spend some money because the returns make it worth it. Especially when it involves hiring developers and technical officers.
The key is to make sure you have a firm understanding of the startup costs before you even get started. There are many tools out there that allow you to dive in deep and see where you will be spending your money. It’s important to give yourself a long runway when starting out. Getting the proper financing is going to depend on this number crunching.
Once you get funded then it is time to try to make the numbers work even better once you are dealing with reality and not theory. Unfortunately, some numbers are actually going to be higher than anticipated. This can be offset by looking at areas where you can cut spending.
The important thing is to not cut essentials that need to be spent to operate in the right way so you aren’t hamstringing your business from growing.
3. Know your ideal customer
Business is all about people and solving problems. Knowing exactly who your ideal customer is will give you an insight into what problems they are having. It makes the business personal so you can connect to the right people.
Assuming that your product is good enough to be successful on its own is wishful thinking. Take the time and spend the money it takes to research the market very well so you can gain an insight into how to make it better or market it well.
A great way to do this is to hire a focus group company that will go through many different strategies to find out what your ideal market is and what is important to them. It is one of the best ways to improve your processes and reach the right people.
This will also allow you to fine-tune your marketing strategy. If you are planning to use your own marketing team and not outsource then this is valuable information for them. The right marketing strategy allows you to also find where the right area to focus will be. Social media is one of the best ways to grow a brand and speak directly to your ideal customers. However, it takes understanding them to know where they spend their time online and what type of messaging resonates with them.
Social media is one of the best ways to grow a brand and speak directly to your ideal customers.
4. Have the right partners
Having the right team is essential to the success of a business. This means that you need to have some partners but it has to be a formula that will help you grow and succeed.
Having people you can trust to partner with is very important but it doesn’t stop there. The ideal team is one that has a member with a different strength than the others. For instance, have a formula in which one is the tech person, another is the face of the business, and yet another who has is the numbers guru.
This way there is somebody who holds their particular end of the bargain down and ensures success. If there is no set role for the partners then there is not likely to be a direction that is obvious to follow.