In this article, we will answer questions such as:
2. What is The Difference Between a Startup and a Small Business?
3. What are the 6 stages of a startup?
There is no limitation to being an entrepreneur. You do not need to go to the university or a bunch of money to be a great entrepreneur. Many successful entrepreneurs do not graduate from college. Let’s say Jack Ma, the owner of Alibaba has an estimated worth of $38 billion. Mark Zuckerberg with his an estimated net worth to be nearly $54 billion. All you need to be the next Jack Ma and Mark Zuckerberg is a strong plan. There is also a chance for you to have your own startup company. In this article, you will get to know four basic things to build your startup company.
Refine your idea
If you are thinking about your business, you likely already have an idea of what you want to sell. After you deliberate your idea, the next step is to do a quick research on existing companies in your chosen industry. Learn what their strategy is and do. Some industries may have different treatments.
Besides, you can identify your target audience. In order to test whether your ideas are suitable for your target audience, you can do polling and survey to gain insight into your business ideas. This is done to get to know your customers’ behavior and needs.
Discuss with your suppliers. If you are going to have wholesalers and retailers startup companies, convening with your suppliers is a must. It can help you to get what product that has a high demand from the market. In addition, to refine your idea, you can attend trade shows or conventions. There will be a good educational session from vendors that will give you insight into what products are good to sell and not.
Write a business plan
When you finish brainstorming what business you want to build, it is time to write down your business plan. Make sure to have long and short terms for your business plan. Short-term planning consists of finding out the characteristics of the company in the present and exploring the strategy to improve in the future. You can put the issue of production tools and quality in the short-term concerns.
“Dream big dreams, but never forget that really short terms goals are the keys to your success” Mac Anderson
In the long term, you need to identify and solve the problem permanently and spread out your target market. There are several things to plan in the long term such as the competitive situation of the company in its social, political, and economic aspects. It also examines the production and quality concerns.
Define a business model
A business model is a conceptual structure to support the capability of a product company, company operations, and company funding. Guru Peter Ducker said that a business model is supposed to answer who your customer is, what value you can create or add for the customer and how you can do that at reasonable costs.
Basically, there are three business model parts:
- Relation to the designing and manufacturing of the product
- Relation to the selling the product, from getting a suitable customer to distributing the product
- Relation to the way of customer payment and the way of the company’s funds
If you still figuring out what a business model type for your business, here are some references business models for you:
1. Aggregator
Aggregator business model allows the company to develop various service providers of a niche and sell their services under its own brand. It uses a commission to earn the money. There are big startup companies that use the aggregator model; Uber, Airbnb, and Oyo.
2. Online marketplace
An online marketplace is happening recently. Many startup companies in South East Asia, especially in Indonesia, focus on online marketplace business models. This model builds a platform as a place for many online sellers to sell their products on the same website. Examples of big online marketplaces as Amazon, Alibaba, and Lazada.
3. Blockchain
The blockchain business model allows peer-to-peer transactions and assists a reliable network. This business model uses a token to make a profit. People who have the blockchain reach consensus are rewarded with the token which holds value. There are also lists of blockchain business models that you can adapt; token economy, development platform, network free change, p2p blockchain business model, and others.
Build a website
Having a website is such an obligation. When you already decided on your business model, business idea, and business plan, you can promote your business on a website. Website is the first gate of communication between you and your customers. A website style can be adjusted with your business model. You can do a consultation with a website builder agency to build your business website.
Most people think that a startup is a former small business. In fact, a startup is quite different from a small business. Building a small business may take more effort and money, and so does the startup. Both startups and small businesses have their own obstacles. Therefore, you need to understand the advantages and disadvantages of having a startup or a small business. Basically, the differences between a startup and a small business can be seen based on raised funding, growth expectation, and initial focus business.
What is The Difference Between a Startup and a Small Business?
Most people think that a startup is a former small business. In fact, a startup is quite different from a small business. Building a small business may take more effort and money, and so does the startup. Both startups and small businesses have their own obstacles. Therefore, you need to understand the advantages and disadvantages of having a startup or a small business. Basically, the differences between a startup and a small business can be seen based on raised funding, growth expectation, and initial focus business. Let’s look at this article for further details.
Funding
Funding is an essential part of the business. Startups and small businesses have different ways to earn the amount of money for their business continuity. Startups are often backed by venture capital groups. But it is not simple to have venture capital. The startups need to present their unique business to the market. Each startup may have different funding sources, it depends on the venture capital and its capabilities. Looking at small businesses, they don’t need venture capital to fund. Small business founders usually have a bank loans, alternative lenders, and joint ventures.
Growth expectation
Startups have an essential need for rapid growth because it influences the next investment they will have. Startups always capture the percentage of their target market that has been achieved. It can be a parameter for startups to have rounds of funding. Successful startup companies don’t have a net profit at the beginning of their business, but they have many rounds of funding after they become established. small businesses also seek growth. Unlike startups, small businesses need to ensure costs and expenses remain low because there won’t be further ‘rounds’ of funding available to them; loans need to be repaid with capital and there aren’t many second chances to do so. In other words, a small business employs a more recognizable, traditional business model.
Initial focus
The startups’ main focus is revenue and growth. Startups need to go to the next level. There are some startup growth stages: pre-seed, series A, series B, and series C. Startups in series A will work harder so they can have more revenue and growth and continue to the next series A. Small businesses don’t have growth stages as startups. Thus, they focus on the revenue and profitability to return the loans.
In sum, what startups need is not what small businesses need. Both of them have different objectives and fundamentals. However, startups and small businesses have the same goal. It is revenue.
What are the 6 stages of a startup?
Knowing what are your main problems is essential. It can help you to define things that make your business down. Furthermore, you can check your startup stage.
Stage 1 Concepting
You just create the concept of your business. You have already researched your target market and think about your product or service in that market. Research in hand, create a business plan and mission statement. Set goals for your development over the coming years.
Stage 2 Commitment
You begin to build an MVP. In this stage, you create a prototype, develop a process, and start building a team. You have enough funding, and you’ll try to secure it. Then, you continue to refine your business model.
Stage 3 Transaction
This happens in the first year of your startup. You will find your fit target audience. You begin to worry about your product and service. Try to gain as many audiences as possible and push the transaction activity. At this stage, focus on growing your customer base and actually attaining the product-market fit you researched earlier.
Stage 4 Refinement
In the refinement stage, typically year 2, you are receiving — and soliciting — feedback from early adopters. Refinement also means refining your process, making it more efficient. In this stage, you can track and measure your website and social media performance or other data that can analyze your business performance.
Stage 5 Scaling
Scaling ups startup can be processed in the second or third year. You can grow up your project due to customers’ feedback and market opportunities. Several tips that you can do in scaling your business are to optimize the marketing strategy and support your team.
Stage 6 Established
This is almost the end of your startup journey. This stage is typically in the three years after. All you need to do is retain your existing customer, increase loyal customers, and develop a marketing strategy.
Golden View
The bottom line, you need to understand the basic things before creating your own startup. That way when you run a startup you are no longer confused with the initial stages. But you need to know that there are many stories about startups that are not actually true. So you really need to confirm the facts and evidence in the field. Do not accept false information.
