You could say that launching a startup is the American dream. And in fact, the U.S. leads the world in startup numbers, outpacing its closest competitor, India, by a margin of approximately 75,600 to 15,900. What better way to make your startup dreams a reality than by making 2023 the year you get your business off the ground? It might be easier (or at least more doable) than you think. Here are our top tips to send your startup soaring.
1. Get the Right Funding
Before beginning this startup adventure, you’ve got to know how you’re going to pay for it. Many startups, particularly those in the SaaS, fintech, and tech realms, require some upfront investment.
If you’re not able to self-fund your startup, don’t be discouraged. There are still many ways to find funding, including:
Investors
Sometimes considered the holy grail of startup funding, an angel investor or venture capital firm will go all-in for their startups. But be cautious — angel or VC investors are hard to capture, and you’ll likely need to give up an ownership stake. Instead, you might look for micro investors who invest a smaller amount. Source micro investors by tapping your friends and family and your social network. Be vocal and don’t be shy about reaching out.
Loans
Traditional bank loans can be hard to come by, especially if you’re just breaking onto the scene. Instead, look into microloans. These loans, in smaller amounts, usually come from private or not-for-profit lenders and offer flexible terms that allow you to build business credit. Be sure to also explore the Small Business Administration, which offers numerous microloans, grants, and other funding opportunities for startups, especially in tech and innovation.
Crowdfunding
Take your product to the people. Crowdfunding allows you to get really micro with your funding by requesting small amounts from individuals, often on a reward basis. Crowdfunding can also include peer-to-peer lending, where a service matches your startup to potential lenders, and if selected, you repay the loan monthly with interest. Some of the top crowdfunding platforms for 2023 include:
- SeedInvest: Ranked a top funding platform for startups, this peer-to-peer lending service gives individuals the chance to be angels.
- Patreon: If your startup involves a lot of content creation, Patreon could be a perfect choice.
- Indiegogo: This is one of the leading and most trusted reward-based crowdfunding platforms out there.
- OurCrowd: An equity-based platform, OurCrowd pairs investors with startups, and in return, startups share a portion of the profits if their company does well.
2. Make a Splash Online
For startups, your online presence is everything. In fact, without one, you’re likely to be part of that nasty 90% startup failure rate statistic. But in the first year, only 10% of startups fail. So this year, dedicate time to building your brand online, including:
- Securing your domain and URL
- Creating your website
- Establishing your social media platforms and growing your followers
- Building an email list and starting a newsletter
- Launching your branded blog
3. Get to Know Your Customers
So, you don’t have any customers yet? No worries. You can still do some highly beneficial consumer research. Start by building a buyer persona — a profile that details all the demographic, psychographic, and behavioral attributes specific to your ideal customer. To do that, look at your competition and learn as much as possible about their customers.
You can also poll consumers who align with your persona to find out their pain points. Start with your own network, and then check out your competitors’ social media followers to see what they’re engaging with, what they like and don’t like, and what updates or products they’re asking for.
4. Explore Your Market
Use what you’ve learned about your buyer persona to dig deeper into market research. Whenever possible, go straight to the source. Set up one-on-one interviews or focus groups with potential buyers, send out email surveys, or conduct polls on social media. You’ve already got the details on your persona; now is the time to find out what they think of your industry and competition and identify those gaps your product can fill.
Now is also the time to conduct a competitive analysis. Look for brands serving the same market, offering a similar product/service, or both. Then, evaluate what they’re offering, how they’re presenting it, and how customers are responding.
5. Diversify Revenue Streams
Startups with just one hero product or service may do well for a while, but if they aren’t prepared to expand or diversify, that success won’t last long. Again, look at your competition, and determine what other revenue streams they’ve opened up. Compile all the consumer and competitive research you’ve done, and look for the places where there are still major gaps in the market. This is where your startup can really shine. Wondering what revenue streams could boost your brand? Here are some ideas to get you started:
- Events, workshops, online courses
- Subscription packages
- Affiliate marketing
- Product upgrades or tiers
- Branded merchandise
6. Make It Official
One of the biggest, boldest, and best steps you can take to launch your startup this year is to form a legal business entity. The simplest — and usually most effective — is a Limited Liability Company, or LLC. LLCs are cost-effective and offer numerous benefits. Why choose an LLC for your startup? Here are three major reasons:
- Liability protection. LLCs offer protections that mitigate risk to your finances. If an individual or organization takes legal action against your LLC, your personal assets are safeguarded.
- Trust. Forming a legal business entity like an LLC proves the legitimacy of your startup. This can help you secure funding, open a business bank account, and much more.
- Flexibility. LLCs are the most flexible business entity available to startups thanks to pass-through taxation, the ability to be taxed in different ways, easy profit distribution, and minimal requirements for compliance.
2023: The Year of the Startup
Or, at least, the year of your startup. Make it your year to shine by putting these tips into practice. With the right attitude, persistence, and determination, you can take your startup from bright idea to bold reality.
