‘Startups’ are the buzz word these days and lot many people do wish to chase their dreams and be their own boss. When one is busy in making it big, one must not forget to build on a steady foundation by doing their homework well. Here’s how one may go across the stepping stones to the Startup World:
1. Chalk out the Business Plan – The path to building a startup starts with an idea. However, the business plan must indeed be in black and white.
A clearly documented business plan helps you focus on key areas. Further, even in case one needs to venture out for outside funding, the business plan helps the potential investor get an idea of the venture. Further, it gives you an idea of the revenue model of the company and if penned in little better words, from where each penny shall be coming and where it shall be getting spent.
2. Assess your Resources – Besides focusing on that assured success idea, one must indeed check out how much own funds does one have to invest into the business. Before going for outside funding or more innovative funding resources, one must always assess if one can continue financing the venture in its initial stages by himself. The initial phase of the startup being the most crucial time, the focus should indeed be on the execution than thinking of the finances then.
3. Assess Your Sources of Funding – However rich one may be with the ideas, he may often need access to the external sources of funding. If your regular expenses cannot be met by your own resources, one may resort to financing through debt, diluting the equity share, digging through the friends network etc. However, the kind of funding being opted usually depends upon the quantum and time frame of the funds required. And one special tip for anyone going for external funding, always have your figures on your fingertips while approaching anyone for funds, be it bank or the potential investor. They would surely be interest in how much margins you make and how the funds invested by them will make a return for them.
4. Check your expenses – Another thing that needs to be evaluated to plug leakages is to check your costs. However easy the funding may seem to you, one must always value its true worth. An easy inward flow of money should not mean an equally easy money going out.
Burning the cash is one thing that must be avoided in all possible circumstances. Depending upon the venture you have jumped into, you might need funds to build on the brand, development of the product and promotion of the business etc. One must make a note of all the routes money is flowing out and ensure to plug the unnecessary leakages.
So, the next time you think, ‘What an Idea, Sir ji!’, do follow these stepping stones to your dreams.