Check List – 10 Points to consider BEFORE you start up a start up!

By Afshan Shaikh

In a country brimming with talent and ideas, it is vital that an entrepreneur needs to analyze several points before investing in a start up company. With the large number of new businesses cropping up, one has to make sure that the business they are planning to start up can be launched, kept afloat and makes profits. Here is a look at ten basic but vital points that an entrepreneur must consider before investing in a start up.

 

1. How original is your business idea/ product?

 

It would be terrible if, after having started the process of launching your start up, you realize that there are other such businesses or products in the market. So make sure you thoroughly research your idea. If a competitor already exists, then consider how you can improve and improvise your product to give it a better chance of getting a market share. Also, make sure you patent your product and its subsequent versions/ improvisations.

 

2. How salable is your product and what is its repeat value?

 

The potential demand for a product of a start up in the market is often a matter of perception. You might believe there will be high demand for your product, you would not be thinking of launching it otherwise. Never the less, you should conduct a survey to be certain, even if it just an online one. Also, what is the repeat sale value of your product, i.e. is it something that a customer will need to purchase again or maybe upgrade? This will help you determine your sales targets better.

 

3. Do you have a business strategy in place?

 

What is your Mission/ Vision statement? What are your short term/ long term goals? Who makes up your customer base? How will you price your product? How large do you want your business to be? Are you going to the sole owner or are you going in for a partnership? These are just a few questions that an entrepreneur needs to evaluate before launching a start up. A well thought out business plan will go a long way in helping you evaluate, manage and control the progress of your start up in the later stages.

 

4. What is your marketing plan? How are you going to build your corporate identity?

 

Once you are convinced of the quality and sale possibilities of your product, then comes the time to convince the rest of the world. An entrepreneur needs to market the product that his/her start up has to offer. With limited funds to spend, the possibilities that online marketing and networking provide are endless. You can start building your corporate identity and creating a market base online even before your start up has fully launched.

 

5. How solid is your investment base? How far can you go before you start reaping rewards?

 

Most entrepreneurs launch their start ups with limited funds. It is vital that you plan and distribute your funds wisely with long term goals in mind. It will take some time for your start up to bring in sufficient revenue for you to break even. In the mean time, you will need to keep your business operational. So manage you funds in a manner that will ensure that they last through the process, till you start reaping the rewards of your start up.

 

6. Do you have a back up plan for unforeseen loss situations?

 

There are several situations that an entrepreneur might have to face that have the potential of sending a start up off its course. These could be market fluctuations, the emergence of a stronger competitor or like the recent worldwide economic recession which caused a great reduction in client’s purchasing power. An entrepreneur needs to have a back up plan keeping in mind several such contingencies so that his/her start up remains unaffected when these situations arise.

 

7. What are the legalities for starting your form of business?

 

An entrepreneur has to make sure that his/her start up’s legalities are in order before it is launched. This includes the legal incorporation and registration of the start up, setting up an accounting system and ensuring compliance to taxation rules and other such legal documentation. So thoroughly research what are the legalities involved in the formation and running of a start up.

 

8. What will be the infrastructural needs of your venture?

 

Depending on the size of business decided upon by the entrepreneur, he/she will also have to decide what kind of infrastructure would be required by his start up. It could range from a small office space basic electronic set up to a small scale factory with machinery. The entrepreneur will also need to allocate sufficient funds to be invested in the set up of the said infrastructure. There are several ways in which this investment can be minimized to suit the budget of a start up.

 

9. How will your business operate?

 

Along with infrastructural requirements and legal documentation, the entrepreneur also needs to decide the terms on which the start up is going to operate. How many employees will the business need initially? What will the working hours of the company be? What will be the method of payment of salaries? What benefits will the company offer to its employees? These are just a few decisions that have to be taken and implemented by the entrepreneur before the start up launches.

 

10. Are you up to the challenge?

 

Once he/she has invested in a start up, an entrepreneur cannot give up half way. It is for this reason that an entrepreneur has to be certain that he/she is in the right mind set and is confident of his/her resources to get through the challenging process of making a start up successful. If you have even a sliver of doubt about your capability of seeing the task through, do not take it up. Launching a start up and turning it into a profitable enterprise takes an immense amount of personal commitment and determination. So an entrepreneur needs to make sure that he/she is up to taking the challenge.

 

The above are just a few of the points that an entrepreneur must consider before launching a start up and each point requires a vast amount of knowledge and research to be understood completely. So, entrepreneurs keep these in mind and study them well. They may prove to be good guidelines for you to start your start up!

 

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