In the first part of the article on building a startup – How to build your startup – step by step, part 1 – we presented the first steps necessary to build your own startup. Assessment of individual competences, character traits, thorough market analysis and building a business plan are the necessary elements to start creating your own business, but not the only one. In this part you will find the next basic building blocks for creating your own modern business solution.
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Financial demand for the implementation of the project along with investment plans for the future
After conducting your own, market and idea analysis, it’s time to think about financing the idea. Financing a startup can come from many sources. Most often it is equity capital, investors’ capital, bank loan or EU funds. At the very beginning, it would be best to finance the project from your own savings or family support – the so-called bootstrapping. Before obtaining the MVP of the product and the first real market tests, there is hardly anything to count on external financing. Any public, non-returnable support programs, e.g. startup platforms, are probably helpful in this respect. However, they require a lot of meticulousness in filling in the documents and accuracy in settling the project. The huge advantage, however, is that they usually do not have to be returned and at the same time the offered amounts are able to cover the first costs related to the creation of the MVP necessary for testing.
Preparing a pitch deck can significantly open the way to obtaining funds for the development of a startup
At this stage, it is also worth preparing your first pitch deck, which, along with the development of the product, should be constantly modified and adapted to the conditions in which you want to obtain additional financial value for the project. The pitch deck should include min. such information as: initial introduction to the project, the problem that a given startup solves, description of the market and competition (direct and indirect; its advantages and disadvantages), clear description of the product / service that the startup is solving, expected growth, time estimation, goals and milestones, description of the current and planned team, business model and cash flow, financial demand and a description of planned investments from the capital received, as well as the share structure. After obtaining the first opinions on the idea and implementation of the product, you can count on external support, min. business angels. They are usually people who financially support entrepreneurs in the initial stage of their business development. In return, expecting a high degree of innovation and high risk. Getting support from business angels is usually difficult and can be done by attending business angel meetings that are often organized by entrepreneurs and investors. Another form is that institutional investors can obtain support as long as the idea is highly innovative and has a high growth potential. To obtain funding from institutional investors, you must present them with a thorough business plan and prove that the company is worth the investment. The same is the case with the support of VC funds. Credits are also possible support, but here it is necessary to prove specific income in order to be financially capable or you can take advantage of EU programs, which usually require links with research and development projects. With the start-up finance and in the initial stage of project development, it is worth considering building the first team and delegating some of the duties to specialists in selected areas. Statistics show that having a partner in the project automatically increases the chances of the project’s success. In addition, team building in a startup can increase work efficiency through mutual inspiration and learning, greater employee motivation as they will have a better chance of success if they work together. A team in a startup is also an opportunity to increase the quality of work by using the knowledge and skills of each team member and filling the competency gaps.
Contacts, marketing and networking
Having the best refined business plan, a well-organized team and funds for financing, it will not start selling without proper marketing, contacts and presenting your solution to the world. Networking is one of the most influential tools for budding entrepreneurs as it can help you connect with potential clients, business partners, or investors. In addition, networking can help develop business skills such as sales and negotiation. There are many different online resources available for entrepreneurs, such as startup incubators, networking events, and local business communities to make connections. Among such meetings, you can learn a lot from people who have more experience in business, you can gain reliable business and investment partners, gain contacts with specialists who may be missing from the project, or simply share your thoughts and get honest feedback.
Last but not least
At the last stage, it remains to take care of all formal issues. Starting from the official establishment of the business, choosing its form, securing by contract, division and establishing management rules, to taking care of patents, licenses and certificates. It is also the moment to introduce the necessary insurance for material and personal entities, permits and protection of intellectual property. It is also the moment to create a brand book to become recognizable and be able to build a brand, provide protection and accounting and legal support, and in the case of IT solutions, also protection of the domain and servers. All the above steps are just the beginning and suggestions for the basic steps in building your first startup. Depending on the specificity and individual solutions, the specified stages may differ in the prioritization of their implementation. However, each of the above elements seems to be a necessary stage to take the first steps in a startup business.
Author: Agata Naramska – She studied economics at the University of Economics in Katowice and graduated from political science at the University of Silesia. For the last two years, she has been supporting startups with operations on behalf of an investment fund. She participated in the process of obtaining financial rounds and coordinated the process of achieving successive milestones of selected portfolio companies. In addition, he has experience in the education industry in the IT sector. He is interested in new technologies and methods of their financing
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