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What a Startup Is and What's Involved in Getting One Off the Ground

Startups are businesses run on some specific business model, and such companies or businesses are often started by a new person or group of people with a completely new concept in the related field. In most cases, these are startup revenue models that are unique in their type.

A startup means that the company is in its starting phase; what makes it different from any business is that a startup is based on an innovative idea. Some entrepreneurs use such ideas to start a business for which they think there is a demand in the market.

What a Startup Is and What's Involved in Getting One Off the Ground

For any startup, a large amount of revenue is required, and in this case, the entrepreneurs who start the startups seek various big sponsors to aid in their path to startup.

Investment from any outside investors or, say, sponsors is an essential part of any startup to run smoothly. It has also been observed that friends and family generally invest through crowdfunding or loans. For any startup, it is essential to decide the venue for the startup to run smoothly and also, and the legal structure of it cannot be ignored.

No doubt, a startup brings a lot of challenges, but it also creates new opportunities as unique ideas sometimes easily make their presence felt and make people's life very easy in some way or the other. However, there is always a high risk of startups failing as various related factors need to be controlled for any business.

Understanding Startups: Major Factors Involved

A startup, by its name itself, defines what it is. In simple terms, a startup is when any company is in its initial phase.

The idea behind any startup is generally very unique and new. The founders of such startups believe that their idea will significantly impact people's lives by making their lives easy with the fantastic products or services they will offer through their startup.

As the startups stay in their initial phase, we cannot expect a fulfilling business model from them at the start.

In most cases, the funding which is required to give a push to the startup is done by the founder himself or herself. But, founders also look for some big sponsors, from whom they ask for the necessary investment to build a setup to start with.

It is difficult to get investment from banks and investors as the startup is a new business with no track record that the banks or investors could trust easily. This is why friends, family, and venture capitalists become the best options for founders to get funding.

The initial few years play a very crucial role in the making of any startup. This is the time when the founders need to take utmost care of the demand and the funding from investors. It becomes essential for the founders to come up with a robust business model during the initial few years.

Startups require deep market research to analyze the demand for the product or services which they are offering to grow. The founders or the management team of the startups need to fix their goals, visions, and marketing strategies which they can follow for the startup to grow and establish itself in the next few years.

Various factors need to be determined before starting any startup; some of them are listed below:


Location is the most critical factor for any business in deciding the fate of the company. We can say that only the selection of the wrong location can end any business, even if the business idea is excellent.

So, the founders of the startup must decide first whether they will sell their services physically by setting up an actual shop or office or conduct the business through online platforms.

Sometimes it becomes necessary for the business to operate its business both online and offline as there are some products which, if the company wants to sell, require proper physical display/ demonstration of that product to the consumers. In such a situation, it becomes very important to choose the right location accordingly.

As a startup, we can take the example of Lenskart, which is a well-known brand these days. Lenskart initially used to sell the glasses and frames online only, but later, with time, they started opening their physical outlets in different cities. Lenskart took this step to reach more consumers, which helped the brand make more profit.

Legal Structure

A company's legal structure should be considered according to the circumstances and the need of the startup. If the founder is a vital employee of the startup, then the company's legal structure could be a sole proprietorship.

If there is more than one founder in any startup, then the company should go for a legal partnership structure as all the partners have joint ownership in the startup, and this legal structure is the best fit for a startup of such kind.


Arranging the necessary funds is an essential factor for any startup or business. If any company has just started, it is evident that it will initially require a lot of funding to run its business. But the problem is that investors are hesitant to invest in a new company because they need a guarantee that they will get good returns.

For startups, attracting investors is easy if the idea is unique and demanding in the market. But initially, families, friends, and venture capitalists are the ones who invest in the startups. Crowdfunding is another way through which startups get funds to move forward with their business process.

Crowdfunding is a process in which the founder of any startup creates an online platform through which the person, who is interested or has belief in the company and its idea, can invest directly by paying using the platform designed.

Taking advantage of a good credit score is another way through which the funding for any startup is made. The credit history of the person makes it easy to get money or a loan easily. Small business loans are also available for small startups, as many banks have the scheme to provide loans for small businesses. The interest of such loans is also minimal, which is a positive point for the founder of small startups.

But, to get a loan from a bank, a lot of proper paperwork is required; many documents and a detailed business plan are also needed if you are seeking business loans from the bank. But, it involves high risk, too, as there are chances that the startup does not run as expected and get fails.

Entrepreneurial Skills

Entrepreneurs are the one who comes up with the idea that is unique and helps form a startup. Setting up a startup is not an easy job and involves high risk. Many startups have failed just because the founder of the startup lacks some essential skills required in any entrepreneur to build a company. Everyone cannot be the same, but some common characteristics are necessary for an entrepreneur, such as dedication, vision, passion, creativity, and self-discipline.

The person funding the startup should be able to take risks as a startup involves high risk, and those who take risks consequently achieve what they want. Understanding the market's demand and need is another skill vital for any entrepreneur who is thinking of starting his own startup.

Developing Idea

As we mentioned earlier many times, what is more important for any startup to be successful is the idea behind the startup. The idea behind the foundation of any startup is the base of any company. A startup generally comes with ideas that could help solve the existing problem. The unique product or services offered by the startups attract consumers and ultimately helps the company's growth.

Brand Identity

For the growth of any startup or company, the respective products or services must reach consumers at a significant level. No matter how unique and valuable your product is, if the consumers are unaware of your product, it is impossible for any startup to grow. Therefore, any startup should reach the customers as much as possible and introduce them to its product or services. This is what we call building brand identity.

Once the startup gets successful in reaching a large number of consumers and making its brand identity, it becomes a lot easy for the startup to grow as the consumers will contact the brand directly to buy the respective products by themselves.

Advantages of Startups

Despite having a lot of risks in a startup, it also has many advantages. Some such advantages include the following:

  • As a startup is a phase when the company is new, the employees in the company are also new in many cases. The startup offers many opportunities to the employees and even the founder to learn more about the market, company, and other things related to that.
  • Employees and management create plans, act according to them, and may succeed or suffer losses. However, in this way, they continue to learn from their profits and also from their failures.
  • Not only do the top-level employees get the opportunity to learn, but the employees at all levels get various opportunities and different work goals through which they keep learning and improving themselves.
  • Unlike any big company, the startup provides flexibility in the working hour of the employees. The employees tend to interact more as the employees in a startup are usually fewer in number, so it becomes possible for the management to listen to their employees and their ideas. The employees feel more comfortable and connected to the company. As a result, it increases employees' productivity.
  • Startups sometimes also provide other facilities to their employees, such as nurseries for employees' children, free meals, and even shorter work weeks.
  • The management appreciates employees who are talented, and the administration also considers their ideas.
  • The employees are delegated more responsibilities which helps the employees also to handle the pressure and learn more.

Disadvantages of Startups

Startups also have some disadvantages, such as:

  • The startup is not only about the unique idea but also comes with a high risk. There is always the risk of the startup being failed if proper measures and care are not taken.
  • A startup requires an adequate amount of capital to keep the startup alive, and therefore investors also play a measure role in the success of any startup. Even though the company is yours, the idea is yours, the fate of your company also depends on some other investors, and that is why it can be seen as one of the drawbacks of a startup.
  • It is important for any startup or new business that before thinking of making a profit from a startup, the founders should first raise enough capital so that the company can continue to operate in the future.
  • Keeping investors happy is one of the major concerns for any startup, and investors are the one who is funding the startup, and if they feel that the company is not growing the way they thought, then there are chances that they will not invest in the company anymore.
  • There is always the risk of the idea of the startup being failed, and therefore many concepts do not even come into the market because of it. Every startup has high risk.
  • The working hours of the employee sometimes get ignored as all the employees work very hard because there is less number of employees.
  • The employees may feel an additional burden as the success of a startup depends heavily on the employees as well. Because of workload and pressure, the startup's employees feel stressed, which could be harmful to the employees' health.
  • As a startup is nothing but a business with new ideas, there is always a chance that a new company with similar ideas can enter the market as a competitor and may affect the growth of the first startup.

Steps Involved: How do you start a startup company?

Let's understand how you can start a startup step by step:

First Step: Come up with a unique idea

A unique idea makes the startup different from other businesses in the market. Therefore, this step becomes the most important one to start a startup.

Second Step: Market Research

The startup founders must research their idea's feasibility and whether the current marketplace is suitable for their concept.

Third Step: Creating a business plan

After the research, the business plan for the company must be made, which includes the organization's goals, vision, values, and objectives. The goals, vision, and objectives must be communicated to the company's employees so that they can all work efficiently to achieve the goals.

Fourth Step: Obtaining Funding

For any startup, the most crucial step is to obtain funds. As we discussed earlier, there are various ways a startup can earn funds, such as funds from savings, friends or family, or through loans.

Fifth Step: Obtaining the licenses and permissions required

After successfully raising funds, it is essential that the company gets registered according to the law and rules, and all the paperwork and legal work shall be done correctly.

Sixth Step: To set up a business location

After completing all the paperwork and legal work, the next decision the founder must make is to decide where the business should be set up.

Seventh Step: To make a public presence

The last step is the advertisement of the product or services, and the company should make an advertising plan to reach a vast customer.

The Bottom Line

Despite having a lot of risks in starting a startup, we are seeing several startups entering the market regularly.

Some of the startups have significantly impacted the consumers, and by that time, they are now one of the biggest leading companies in their area.

The country's government should also promote startups, as new and unique ideas can significantly impact the nation and its economy.

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