You come to the conclusion that you want to become an entrepreneur and the first question you ask yourself is what you will need if you want to build a great startup.
Even it is not a simple task, building a startup from the ground is something that can be achieved. You need several different elements combined in one functional entity called startup.
In my experience, the biggest mistake from entrepreneurs is thinking that it is an easy task. They underestimate the importance of the whole dots that must be connected to build a great venture.
Here, I want to explain different things that can help you in the process of building a successful company.
But, as always in the business or entrepreneurial world there’s nothing common sense, and you can always add your own dots that will require to be connected as an addition to the things explained in the next paragraphs.
#1 Business Idea
As always, startups are based on some type of business idea. But, great startup doesn’t want any type of idea.
Great startups need ideas that will present:
- The solution to the problems of potential customers,
- Solution for the problems that are not solved until today,
- Solution for which there are desires on the marketplace,
- Solutions for which there are enough people on the marketplace that want to solve that type of problems and
- Solution for which there are people ready to pay money to solve the problems
As you can see, the great startup must be based on the ideas that solve problems that were not solved until today. Also, there will need to be a big desire for the solution and focus on the marketplace where are enough people who want to solve those problems, and they are ready to pay for the solutions.
#2 Business Model
Next, because you already have a great business idea for your next venture you must start modeling your future company.
Probably, you will come to the different business models, but what’s more important is that you must combine them in something really great for your company.
Start with a piece of paper where you can draw different elements of your future company. Remember that when you modeling your company you must answer at least the following questions:
- What will be the value that your company will offer? Basically, this is your business idea.
- How you can offer the value? This is the question when you must think about distribution and communication channels.
- Who will be your customers? You must start with the definition of your ideal customers.
- How your company will make money? Think about possible revenue streams that your future company will have.
- Who can be your partners? You will have different partners. They can be suppliers, investors, stakeholders…
- What do you need to do to produce the value? You must take different action steps to produce value.
- What will be your costs? There are not businesses without costs. How much you need to spend if you want to produce the value.
- What type of resources you will need to produce and ship your value?
#3 Business Plan
With your great idea, and your defined business model it will be much easier to make a business plan. You need a business plan if you want to stay focused on the next steps in building your company.
Many entrepreneurs didn’t want to lose their time in preparing a detailed business plan for their startups. But, believe me, without a plan you will reduce chances to build your own great startup.
Simple try with the following things that at least must be contained in your business plan:
- Your next action steps, or what you must to do if you want your great startup to become reality.
- Some predictions about your future sales, costs, profitability, break-even…
- A detailed description of your value proposition.
- Marketing plan, or what you will use to market your great startup.
#4 Great Team If You Want to Build a Great Startup
You can’t go alone to make your great startup. You need a team of professionals who will help you in the process of building your company.
The purpose of your great team in your great startup is to close the gap for the need for different skills when you are building your company from the ground. You will need at least technical skills, marketing skills, sales skills, and finance skills.
Before you continue to the next level you must build your team first. Without them, you can’t succeed.
#5 Great Systems to Build a Great Startup
Now, when you have a great business idea, a business model, and your business plan, all supported with your great team, you can start building your systems.
This is another thing that I found very underestimated by the entrepreneurs when they are trying to build a startup. Simply, they start the company without the systems that can assure the future success of the company.
As a good starting point to build the systems is to start with the fundamental functional areas of your company:
At the startup stage, the marketing function is one of the most important functions for your company.
You need quick cash to continue with the next developing levels of your company.
Yes, you need sales to increase cash flow, but the sales can be made only when people know about your products or services.
Your marketing systems must ensure attracting your potential customers, convert them into buyers, and retain them to sell more from what your business offer.
When people have already known about your products and services, you must sell them. Your sales systems need to ensure that each person is contacted, on each call from customers is answered, each sale is processed… If you want to build a great startup, you will need strong sales processes inside your company.
You also must produce the products or services that your company will offer. Because of that, you need to build a production system in your new great startup.
This system will be responsible for making the products and services, improve them, and delivering them to the customers.
Always, there will be a need for such a boring thing as administration. But, someone must do the job. And remember many future improvements can be based on data that will be collected from the administration system.
As you can see these are the basic dots that you need to connect if you want to build a great startup. But, always there will be something more. This is only the framework.