Thanks to the Internet, we have changed our way of communicating, informing ourselves and organizing ourselves in our day to day life, but it has also transformed the way of starting a business. Thanks to new technologies, anyone without huge capital can launch their idea and satisfy a need through startups. Even some big companies, like Amazon or Facebook, started out as startups.
A startup is a newly created or early-age company that has great growth potential and markets products and services through the use of information and communication technologies.
It is important to know how to distinguish between conventional SMEs and startups. Conventional SMEs enter the market after having invested a certain amount of money and must wait a while to start enjoying benefits. Startups, on the other hand, quickly go to market to achieve the necessary growth and financing through digital transformation.
In summary, startups are characterized by being:
- Young : companies familiar with a young, modern and technological environment, which after being born, try to obtain financing. With the aim of evolving into an SME or large company or directly selling the idea to an already consolidated company.
- Scalable : The main attribute of a startup is the speed and ability with which it can grow and generate income quickly. Likewise, they are able to increase their production and sales without the need to increase their expenses. Therefore, your production and profit margin grows exponentially. Thus, despite their small size, they are capable of generating very high income.
- Technological : they are businesses that are based on innovative ideas to satisfy a new need in the market. These entrepreneurs rely on digital technologies to evolve. In addition, thanks to the interconnected digital world, they have the possibility of finding the essential financing to be able to develop their idea.
- Small Costs – The starting point for startups is to keep production costs low in order to grow faster. For example, in their beginnings they usually carry out their business activity in coworking spaces, without the need to have an official company headquarters.
What is necessary to start a startup?
Now we explain the requirements that any startup must meet:
- Think of solutions to everyday problems: the philosophy of startups is to find practical solutions to everyday problems, whether it is shared accommodation, moving around a city or making a purchase easily and safely. Normally these needs are common to the majority of society, so the chances that the idea will work are high.
- Look for creative and practical solutions: startups, in addition to being profitable businesses, are also based on simple and creative strategies that no one had put into practice before. For this reason, its growth is rapid and its business model is attractive to customers.
- Think of solutions that are scalable : the service they offer has strong growth potential for quick profits and gains without the need to invest in infrastructure. For example, develop the website or mobile application of your business once and from there, many people will be able to buy your service or your product without you having to invest more time or money.
- Using technology to offer the best service or product : any startup, regardless of the type of product or service it sells, relies on technological and innovation resources to achieve an online sales channel, better web positioning, digital marketing, etc. how to improve the production process.
- Establish what the objectives and deadlines of each one are : a startup must have its short, medium and long-term objectives very well defined. This is of great help to maintain order and direction in the project.
- Plan the business economically: define how much budget you need to start the startup and how much money each partner will contribute.
- Look for crowdfunding : if you don’t have enough budget to develop your business idea, you can look for financing through crowdfunding . To do this, you must publish your idea on a crowdfunding platform to find people who support your initiative and contribute the necessary money to start it up.
- Assemble a team – Make sure you have a team ready to build your startup. You do not need a large group, the ideal is that each member contributes something significant to the project.
Consult our Business Creation section and learn about the sources of financing and aid that you should take into account for your business.