A startup is simply a brand-new business, correct? Well, yes and no. At its most basic definition, a startup is any new business that was created due to a market need, such as a new product or service, and stepped up to provide it. But a startup is more than a mom-and-pop store or at-home business. Here’s what to know about startups and how they work.
Startups Are Made To Grow
As mentioned, a startup is a new business, but with a little more oomph than an average small business, mom-and-pop store, or the like. Startups begin with an idea to create a product or offer a service that meets a current need. However, unlike a typical small business, a startup has bigger plans, and is created to grow well beyond the small-time business started by its founder. Naturally, that can be a tall order, and startups face multiple obstacles along the way. Some may even fail within the first few months or years, but those that survive can go on to thrive. They do the latter with a codified outline for the coming years, detailing a business strategy.
Startups Constantly Foster Change
You can’t stand still with a startup. Change is the only constant, as the old saying goes, and startups need to remain flexible to stand up to market demands and other outside forces. Turnover and alterations may be made in staffing, job titles, organizational charts, assignments, and even physical office space. The fact remains that unlike a traditional product or service, a startup’s reason for existence may demand swift and sure decision-making and turnarounds.
Buy-In and Participation by All Employees
Unlike traditional offices, startups can require employees able to wear any number of hats, and that includes the founder. It helps to have workers who are familiar with every level of a business, doing secretarial work, sales and marketing, presentations, product development, and more. Business in a startup is an organic process, and it requires people ready to step up and contribute whatever’s needed when it’s needed.
Staying on top of the marketplace is required with a startup. You’ll need to mind not only what’s going on in your own office, but also the trends and travails of the market outside the office. Keep track of your performance, spending, and the path your startup is taking—upwards versus downwards. Watch the news and see what the media is saying about your business, its performance, current and potential investors, and what your competitors are saying and doing in the meantime. Set weekly goals and note whether you’re meeting them. Avoid surprises. Things can change within minutes, and you need to be prepared.
Small but Scrappy
Startups rarely start out large or even attached to a larger entity. Often, they start out with a founder or founders with a dream, and a handful of employees (doing all that work mentioned above). In the beginning, they’re also self-funded enterprises—for instance, many found their seed money through 401K small business financing. Simultaneously, they’re always on the lookout for investors. This part of the process is known as bootstrapping, as in pulling yourself up by them. Overall, a startup is ready to get out there, stake its claim, and build its brand in the marketplace.
Creativity Is Encouraged
Startups are never about doing the same old things the same old way. They bring brand-new ideas to the world while sustaining a culture of creativity and innovation in their offices. With creativity come fresh solutions, and with fresh solutions comes growth. Part of the nontraditional approach usually involves creating a less staid work environment, offering benefits and laid-back workplaces to encourage questions, inquisitiveness, experimentation, and imagination. Concurrently, startups do expect results from their employees, so the attempt to stay creative can be challenging.
Unconventionality With a Purpose
Getting the impression that a startup is not a classic work environment? Too true. Even before the pandemic, working from home, or from someone’s home, was quite common among startups. Worktimes are rarely a solid 9 to 5 for everyone. Employees may find their worktime layering over that of their fellow employees throughout the day. Also, in-person meetings are mostly old news, since people are spread out across the country or even world. So, when you think of a startup, don’t think of a brick-and-mortar business. Think of an entity, not a location.
The Downsides of Startups
When a startup breaks it can break big, leading to success and benefits for all those who took a risk and got involved. But reality isn’t always so pleasant. Most startups fail—90 percent or more—and leave a lasting impression on one’s resume and prospects. Their exciting and innovative nature may be intoxicating, but it demands a large investment of one’s time and talent to be sustained. In general, if you prefer a raucous and thrilling work environment, a startup is right for you and your investments. Otherwise, consider a more conservative and predictable business enterprise to invest in, like a franchise. But even established franchises carry no guarantees of success. Fortune favors the bold, however. Even with their drawbacks, startups can provide a slew of opportunities when they succeed.
What’s Next for You?
Those are the basics of what to know about startups and how they work. Before you enter the bootstrapping part of funding a startup, be sure that your idea has merit. The bootstrapping part of a startup refers to providing the starting capital for your new business from your own savings, retirement money, or investments by friends and family. Look at the competition and markets you intend to enter and see if you have open territory or if you’re in for a fight. Be sure that your product or service genuinely serves a purpose and fulfills a need with customers. Most of all, make sure you’re unique. Bringing something different to the table is the first and biggest step in your startup’s journey.
Curious about whether you have the means to start a startup? Give us a call or send us an email, and we’ll be happy to discuss your possibilities!