Understanding Startups

Startups are young companies that have been founded to create a new product or service and bring it to market. Customers find them irresistible.

Startups are founded on innovation and seek to solve the shortcomings of existing products, or create new types of goods and/or services. This disrupts established ways of doing business and thinking for entire industries. Many startups are “disruptors” in their industries.

While you may be most familiar in Big Tech with companies such as Facebook, Apple, Netflix, and Google (collectively known as FAANG stocks), startups include companies like WeWork. Peloton, and Amazon.

What is Startup Management?

Startups work like any other business at a high level. A team of employees works together to create a product customers will love. The way that a startup does this is what sets it apart from other businesses.

Repeated businesses duplicate what has been done before. An existing restaurant may be franchised by a prospective owner. This means that they use an established template to help them run a business.

Startups aim to invent a new model. This could be in the form of meal kits such as Blue Apron and Dinnerly that offer the same food but with a different approach. This creates a market that is larger than individual restaurants: tens to millions instead of thousands.

Startups Strive for Growth and Speed

Startups are distinguished from other businesses by their speed and growth. Startups strive to quickly build upon ideas. This is often done through iteration, which allows them to improve their products by analyzing usage data and feedback continuously. A startup may start with a minimum viable product (MVP), which it will then test and improve until it is ready for market.

Startups are not only looking to improve their products but also to expand their customer base. This allows them to increase their market share, which then allows them to raise more money. Then they can grow their audience and products even further.

All this innovation and rapid growth is often implicitly or explicitly in service of a final goal: going public. A company that opens up to public investment creates an opportunity to cash out early investors and reap the rewards. This is referred to as an “exit” in startup parlance.

How are Startups Financed?

Startups usually raise funds via multiple rounds of funding.

• The bootstrapping preliminary round is when the founders and their family invest in the company.
• The seed financing comes next from “angel investors”, high-net-worth individuals that invest in early-stage companies.
• Next are Series B, C, and D funding rounds. These funding rounds are primarily managed by venture capital firms that invest tens of millions to companies.
• A startup might decide to go public and make available outside capital via an IPO, acquisition by a special purpose acquisitions company ( SPAC), or direct listing on a stock market. A public company is open to anyone. Startup founders and early investors can sell their shares to get a huge return on their investment.

It is worth noting, however, that startup funding is limited to individuals with large financial resources. These are called accredited investor, because of the Securities Exchange Commission’s belief that their high net worths and incomes protect them from possible loss.

Everyone wants to see the more than 200,000% return Peter Thiel received on his investment in a small startup called Facebook. However, the overwhelming majority of startups fail according to a report by UC Berkeley researchers and Stanford researchers. Early stage investors can expect 0% returns on their investment.

How do Startups succeed?

Many startups will fail but not all. Startups must have many stars aligned and answer crucial questions in order to succeed.

• Are they passionate about the idea? The execution is everything. If the team isn’t willing to do everything necessary to support it, even an excellent idea can fail to connect with its audience.
• Are the founders experts in their field? They should be able to understand everything in the area they are operating.
• Do they have the time and energy to do it? Many early startup employees work very hard. MetLife and U.S. Chamber of Commerce conducted a survey in 2018 that found that most startup owners work 14-plus hours per day. A startup that isn’t willing and able to dedicate most of its waking hours to a new idea may not be able to succeed.
• Why is this idea so important? If it is, has anyone tried it before? What makes the startup’s team unique in being able to crack that code?
• What is the size of the market? This determines the potential market for a startup. While niche technology companies may be more successful than their competitors, what ends are they aiming for? Financials may not be large enough to sustain a business in a small market.

Startups that can answer all these questions may have a chance of being among the 10% of companies in early stages to survive.

How to Invest In Startups

Unfortunately, startup investing has not been widely made available to the general public.

Accredited investors are required to gain access the best early stage startups or venture capital funds with the highest chance of Thiel-level returns. This means that you must have an annual income of $200,000 and a net worth of at least $1,000,000, excluding your primary residence. If you are a registered investment advisor, you may also be eligible to claim accredited investor status.

You don’t have to fit one of these criteria. However, there are still options. Crowdfunding sites such as WeFunder and Seedinvest let anyone put down a small amount in exchange for a share of a startup. Seedinvest offers pre-vetted opportunities, and an investment minimum $500–50x lower than what is expected of accredited investors who want to invest in startups.

Startups: 65 of the Top Movers & Shakers in 2023

1. SurveyAuto

• Industry: AI
• Funding: Undisclosed
• Investors Bill and Melinda Gates Foundation

SurveyAuto is a new startup in the AI industry. It collects exact survey results via geolocation, call records and hyperspectral imagery. SurveyAuto was created by Dr. Umer Saif (a Pakistani entrepreneur).

Although the startup has been operational for two years, it recently received funding from The Bill and Melinda Gates Foundation in an undisclosed amount.

Dr. Umar Saif is the CEO of SurveyAuto. He explained that SurveyAuto relies on machine-learning to determine who, where, and when data is reported. This minimizes costs and reduces human error.

It sounds promising. It will only be time to see if it succeeds.

2. Spacemaker

• Industry: AI
• Funding: $25M
• Investors – Atomico

Spacemaker, another startup with great potential, aims to create a sustainable infrastructure that will allow companies to grow and reduce environmental pollution. It is one of the United Nations’ millennium development targets.

Spacemaker can help infrastructure designers find the best ways to maximize their real-estate assets’ value. Spacemaker will explore billions upon billions of potential sites, select the most promising and provide detailed statistics to infrastructure developers about each one. Spacemaker uses machine intelligence for eco-friendly designs.

3. Capacity

• Industry: AI
• Funding: $23.2M
• Investors: Equity.com

Are you able to find the presentation? Are you unable to locate the assignment that you have been assigned? Are you having trouble finding the book that you need for your flight? There is an answer. Capacity is an AI startup company that has been a success.

Capacity, an AI platform that connects all the apps you choose on one platform, is called an AI platform. Capacity is a startup that aims to make it easy to never lose a digital file again. This software uses AI to determine which apps you are using at any given time and keeps them available for you. This software helps you and your team to manage time, learn about important things, and concentrate on achieving business goals.

Summary

Choosing between Delaware and Texas for incorporation depends on a business’s goals, tax considerations, and legal preferences. Delaware is the top choice for startups, large corporations, and businesses seeking venture capital or planning an IPO. It offers a well-established legal framework, the Delaware Court of Chancery, and strong investor protections, making it ideal for companies looking for predictability and credibility in corporate governance.

However, it comes with higher incorporation costs, franchise taxes, and the need for foreign qualification if operating outside Delaware.

On the other hand, Texas is a better fit for small and mid-sized businesses that plan to operate locally and want to minimize tax burdens and filing costs. Texas has no corporate income tax, lower incorporation fees, and a strong economy, making it a pro-business environment for entrepreneurs.

However, it lacks the investor-friendly legal system of Delaware, making it less ideal for businesses seeking outside investment. Ultimately, businesses that prioritize growth, investor appeal, and legal advantages may prefer Delaware, while those looking for low costs, local operations, and tax savings may find Texas to be the better choice.

Texas Secretary of State Business Services Website

Division of Corporations – State of  Delaware Website

The state where you incorporate will impact your company’s tax obligations, legal protections, regulatory requirements, and long-term growth potential. While many entrepreneurs default to incorporating in their home state, others explore business-friendly jurisdictions that offer strategic advantages.

Delaware and Texas are two of the most popular states for incorporation, each offering distinct benefits for businesses. Delaware has long been recognized as the premier choice for corporations, particularly those seeking investment or planning to go public. Its well-established corporate legal system, investor-friendly laws, and specialized Court of Chancery make it an attractive option for businesses of all sizes.

On the other hand, Texas is known for its strong economy, lack of corporate income tax, and business-friendly climate, making it an appealing option for companies looking to establish a physical presence in a state with a pro-business environment. With its booming economy and low regulatory burden, Texas is often the preferred choice for businesses that operate locally or want to avoid the franchise tax complexities of Delaware.

This article will compare the advantages and disadvantages of incorporating in Delaware vs. Texas, helping business owners determine which state aligns best with their needs. We’ll explore key factors such as taxation, legal structures, costs, and investor preferences to help you make an informed decision.

Key Factors to Consider When Choosing a State for Incorporation

When deciding where to incorporate, business owners should evaluate multiple factors that impact their company’s financial and operational efficiency. Below are the critical elements to consider:

1. Legal Environment and Business Laws

Each state has its own corporate governance structure, court system, and legal precedents that affect how business disputes are handled. Delaware’s corporate laws are well-developed and widely regarded as business-friendly.

The Delaware Court of Chancery, a specialized business court, ensures that corporate disputes are resolved quickly and efficiently without jury trials. Texas, while also having a pro-business legal environment, does not offer the same level of legal specialization in corporate law but still provides a strong framework for business operations.

2. Tax Implications

One of the biggest factors influencing incorporation decisions is taxation. Delaware does not impose corporate income tax on businesses that do not operate within the state, but it does have a franchise tax that can be costly for larger corporations. Texas, in contrast, does not have a corporate income tax but levies a franchise tax based on revenue. Businesses should analyze their tax exposure under each system to determine which structure is more advantageous for their specific needs.

3. Filing and Maintenance Costs

Incorporation comes with initial filing fees and ongoing compliance costs. Delaware has relatively high franchise taxes and annual report fees compared to Texas. Texas generally has lower filing and maintenance costs, making it an attractive option for small and mid-sized businesses looking to minimize expenses.

4. Privacy and Reporting Requirements

Some business owners prioritize privacy when selecting a state for incorporation. Delaware offers strong privacy protections, allowing businesses to list a registered agent instead of disclosing the names of company owners in public records. Texas, while also maintaining a degree of privacy, has slightly more disclosure requirements for corporations and LLCs.

5. Business-Friendly Policies

Both Delaware and Texas are known for being business-friendly, but they cater to different types of businesses. Delaware is often favored by large corporations and startups seeking outside investment due to its well-established legal framework. Texas, with its low tax burden and strong economy, is ideal for businesses looking to establish operations within the state while benefiting from a supportive regulatory environment.

6. Suitability for Small vs. Large Businesses

Delaware is particularly beneficial for companies planning to scale, seek venture capital, or go public due to its established corporate laws. However, the higher costs and additional compliance requirements may not be ideal for smaller businesses. Texas, with its lower costs and favorable tax structure, is often a better choice for small to mid-sized businesses that intend to operate within the state and avoid the complexities of Delaware’s franchise tax system.

By considering these key factors, business owners can make an informed decision about whether Delaware or Texas is the better state for their incorporation needs. The following sections will dive deeper into the specific advantages and drawbacks of each state to provide further clarity.

Delaware as a Business Incorporation Hub

Delaware has long been regarded as the gold standard for corporate incorporation. More than 60% of Fortune 500 companies and a significant percentage of publicly traded companies in the U.S. are incorporated in Delaware. This reputation stems from its well-established corporate laws, specialized business court system, and investor-friendly policies.

1. Business-Friendly Legal Environment

One of the biggest advantages of incorporating in Delaware is its advanced and business-friendly legal environment. Delaware’s General Corporation Law (DGCL) is one of the most well-developed and flexible corporate statutes in the country, providing clarity and protection for business owners and investors.

Additionally, Delaware has a specialized Court of Chancery, which focuses solely on corporate law cases. This court does not use juries, ensuring that business disputes are handled by expert judges with deep knowledge of corporate law. As a result, businesses can expect faster, more predictable, and fair rulings compared to general state courts in other jurisdictions.

2. Tax Benefits

Delaware offers unique tax advantages, especially for companies that do not conduct business within the state. These benefits include:

• No corporate income tax for out-of-state businesses: If your company is incorporated in Delaware but does not operate there, it is exempt from state corporate income tax.
• No sales tax: Delaware does not impose a sales tax on goods or services, which can benefit certain types of businesses.
• Franchise tax considerations: While Delaware does impose a franchise tax, small businesses can often qualify for lower tax structures, while large corporations may have higher obligations.

3. Ease of Incorporation

Delaware has a streamlined and efficient incorporation process. Businesses can incorporate online quickly, and the state offers expedited processing for urgent filings. Additionally, Delaware allows businesses to use a registered agent, which provides privacy by keeping the names of directors and officers off public records.

4. Preferred by Investors

For startups and companies planning to seek outside investment, incorporating in Delaware is often the best choice. Many venture capitalists and institutional investors prefer Delaware corporations due to the clear legal precedents, strong shareholder protections, and flexibility in structuring stock and equity agreements.

5. Downsides of Incorporating in Delaware

Despite its advantages, Delaware may not be the best choice for every business. The costs of maintaining a Delaware corporation, including franchise taxes and annual reporting fees, can be higher than in other states. Additionally, businesses that incorporate in Delaware but operate in another state must register as a foreign entity in their home state, which adds additional compliance requirements.

IV. Texas as a Business Incorporation Hub

Texas has emerged as one of the most business-friendly states in the country, attracting entrepreneurs, startups, and large corporations alike. Known for its low tax burden, strong economy, and fewer regulatory hurdles, Texas is an appealing choice for companies looking to incorporate and operate within the state.

1. No Corporate Income Tax

One of Texas’s most significant advantages is that it does not impose a corporate income tax. Instead, Texas levies a franchise tax, which is based on total revenue rather than net income. This tax structure benefits businesses with lower revenue while allowing for tax deductions and exemptions.

2. Strong Business Climate

Texas consistently ranks as one of the top states for business due to its pro-business policies, low cost of living, and robust economy. The state has no personal income tax, making it an attractive location for business owners and employees alike. Additionally, Texas is home to major industries such as technology, energy, healthcare, and manufacturing, providing opportunities for business growth and expansion.

3. Lower Fees and Costs

Compared to Delaware, Texas has lower incorporation and annual maintenance costs. Filing fees for forming a corporation or LLC are relatively low, and the state’s franchise tax can be more favorable for smaller businesses. Unlike Delaware, Texas does not impose hidden compliance fees or additional reporting requirements.

4. Ideal for Businesses with a Physical Presence

For businesses that plan to operate in Texas, incorporating in the state makes sense. Since Texas does not require companies to register as a foreign entity when they are incorporated in the state, businesses avoid the extra costs and paperwork associated with foreign qualification.

Additionally, Texas offers a large, skilled workforce and an expanding economy, making it a great place for businesses looking to hire employees and establish a physical presence.

5. Downsides of Incorporating in Texas

While Texas offers many advantages, it may not be the best option for companies seeking venture capital or planning an IPO. Many investors prefer Delaware corporations due to the well-established legal precedents and shareholder protections. Additionally, businesses incorporated in Texas are subject to the state’s franchise tax, which can become complex for high-revenue companies.

Comparison: Delaware vs. Texas

When choosing between Delaware and Texas for incorporation, business owners must carefully evaluate the key differences in taxation, legal structure, costs, and investor preferences. Below is a side-by-side comparison of the two states based on essential factors.

1. Legal System & Court Efficiency

• Delaware: The Delaware Court of Chancery is a major advantage for corporations, offering a highly specialized and efficient resolution process for business disputes without jury trials. This ensures fast and predictable rulings based on well-established corporate law.
• Texas: While Texas has a strong legal system, corporate disputes are handled in regular courts, which can lead to longer resolution times and less predictability in rulings.

Best for: Companies that prioritize a clear legal framework and investor confidence should choose Delaware.

2. Tax Differences

• Delaware: No corporate income tax for companies that do not operate in the state, but businesses must pay an annual franchise tax, which can be high for larger corporations.
• Texas: No corporate income tax, but businesses are subject to a franchise tax based on total revenue. The tax burden is often lower for small and medium-sized businesses compared to Delaware.

Best for: Businesses looking to minimize franchise taxes and operate within their incorporation state may find Texas more favorable.

3. Cost of Incorporation & Maintenance

• Delaware: Incorporation fees, franchise taxes, and annual report fees tend to be higher. Additionally, businesses operating in another state must register as a foreign entity, leading to extra compliance costs.
• Texas: Lower incorporation fees and annual maintenance costs make it a more cost-effective choice for businesses that primarily operate in Texas.

Best for: Small and mid-sized businesses looking for lower upfront and ongoing costs may prefer Texas.

4. Privacy & Reporting Requirements

• Delaware: Offers greater privacy protections; companies can use a registered agent and do not have to disclose the names of owners and officers in public records.
• Texas: Requires more transparency in corporate filings, with some owner and officer information made public.

Best for: Entrepreneurs who prioritize privacy and want to limit public disclosure of their business ownership may prefer Delaware.

5. Investor and Startup Considerations

• Delaware: The preferred state for startups, venture capital firms, and companies planning to go public due to its predictable legal environment and investor-friendly corporate laws.
• Texas: While Texas has a strong economy, it is not as dominant as Delaware in terms of attracting institutional investors or accommodating businesses seeking venture capital.

Best for: Startups and businesses seeking investment should strongly consider Delaware.

6. Suitability for Small vs. Large Businesses

• Delaware: Best suited for large corporations, companies planning to scale, and businesses looking to attract outside investors.
• Texas: Ideal for small and mid-sized businesses, especially those that will operate primarily in Texas and want to benefit from lower incorporation costs and taxes.

Best for: Small, local businesses and companies avoiding foreign qualification requirements will benefit more from incorporating in Texas.

When Should You Choose Delaware?

Delaware is the preferred choice for businesses that:
Plan to raise venture capital or seek investment. Investors and venture capitalists often require companies to be incorporated in Delaware due to its well-established legal protections and flexible stock structures.

Expect to go public or issue stock. If your business is planning for an IPO or expects to issue shares widely, Delaware’s corporate laws provide the best legal framework.

Want a specialized and predictable legal system. Delaware’s Court of Chancery provides a legal advantage by handling corporate cases efficiently and without juries, reducing unpredictability in legal disputes.

Operate in multiple states. If your business will have a nationwide presence, incorporating in Delaware may offer legal and financial advantages over other jurisdictions.

Prioritize privacy. Delaware allows business owners to maintain anonymity by listing only a registered agent in public filings.

Situations Where Delaware May Not Be Ideal:

If your business is small and does not plan to seek outside investment, the higher franchise taxes and maintenance costs may not be justifiable.

If your company will operate solely in another state, you may have to register as a foreign entity and pay additional fees in your home state.

When Should You Choose Texas?

Texas is a great choice for businesses that:
Will operate primarily in Texas. If your business will have a local presence, Texas incorporation allows you to avoid foreign entity registration costs while benefiting from the state’s business-friendly policies.

Want to minimize corporate taxes. With no corporate income tax and a franchise tax based on revenue, Texas is an attractive choice for businesses looking to reduce tax burdens.

Prefer lower filing and maintenance costs. Texas has a lower cost of incorporation and fewer annual compliance requirements than Delaware.

Operate as a small or mid-sized business. Many local businesses, startups, and LLCs benefit from incorporating in Texas due to its affordability and strong economic environment.

Are in industries such as energy, tech, or manufacturing. Texas’s strong economy, workforce, and industry presence make it a strategic choice for businesses in these sectors.

Situations Where Texas May Not Be Ideal:

If your company plans to seek venture capital or go public, investors may require you to incorporate in Delaware.

If your business does not operate in Texas, there may be no strategic advantage to incorporating there.

If you want greater privacy protections, Delaware offers better anonymity for business owners than Texas.

Conclusion

Deciding between Delaware and Texas for incorporation depends on your business’s structure, goals, and financial strategy.

• Choose Delaware if you plan to raise capital, seek investment, or establish a corporation with a strong legal framework.
• Choose Texas if you want lower incorporation costs, no corporate income tax, and plan to operate locally within Texas.

For businesses unsure about the best option, consulting a legal or financial expert can provide clarity based on your specific circumstances. By carefully weighing the advantages of each state, you can make an informed decision that aligns with your long-term business objectives.

Accelerators offer startups, in addition to the investment, free office space, management, and business consulting, feedback on their product, and access to investors through a demo day.

Best Accelerators for Startups Based on Number of Exits

Demo days were when founders presented their pitch deck to a group of Angel Investors and representatives from Venture Capital firms. Check out the Peter Thiel pitch deck template for a winning deck.

When reviewing accelerator program applications, staff consider many common themes, including addressing a large customer base, having a bold idea, showing traction, or signs that the company can reach a milestone during the program. But the most important and most talked about theme is the team behind it.

It is difficult to get into these programs because the acceptance rate may be as low at 1.5%. For every 7,000 applicants, there will only be 106 places available. Harvard’s acceptance rate is 5.1%, while Stanford’s is 5.1%.

Success is determined by the number of exits

1) Y Combinator

Number of investments: 18344

Number of exits: 192

Mountain View, California, USA

About:

Y Combinator is a leader in the startup accelerator market. The accelerator invests $120k each year in new startups. This number was reduced to decrease friction among founders. The companies it has worked with have a total valuation of more than $100B. The most prominent include Stripe, Stripe and Reddit. Twitch, Twitch and Coinbase are just a few.

2) Techstars

Number of investments: 1,557

Number of exits: 134

Location: Boulder Colorado USA

About:

Techstars mentors, funds and accelerates startups. The accelerator program has helped to create over 1,000 companies worth more than $8B. Techstars is behind Startup Week, Startup Weekend and Startup Week. These programs encourage entrepreneurs to get rid of procrastination and launch new ventures within hours.

3) 500 Startups

1,694 investments

Number of exits: 162

Mountain View, California, USA

About:

500 Startups is a seed- and early-stage venture capital fund. It consists of 13 micro funds and 4 major funds that have invested in startups in at most 60 countries. Credit Karma and Udemy are two examples of funded startups. Exits include sales to Rakuten and Google. 500 Startups recently received equity from Abu Dhabi Financial Group, giving them one of the two seats on its board.

4) Plug-and-Play

Investments: 731

Number of exits: 61

Location: Sunnyvale, California, USA

About:

Plug and Play Ventures invested 51% in pre-seed ventures. It has achieved 8 exits in 2017, invested 262 startups last year, and holds daily networking events. According to reports, the accelerator’s in-house Venture Capitalist is willing to write checks ranging from $25,000 to $500,000. The portfolio companies it manages have raised $7B.

5) MassChallenge

Investments: 1,387

Number of exits: 39

Location: Boston, Massachusetts, USA

About:

MassChallenge is headquartered in Boston but has programs in Israel, Mexico, Switzerland, and the UK. The accelerator claims that its startups have created over 80,000 jobs in the last 8 years. It appears that the program is heavily focused on Fintech and Biotech.

6) SOSV

Number of investments: 1,152

Number of exits: 23

Location: Princeton (New Jersey), USA

About:

SOSV closed its third round of funding in January 2017 for $150M. Sean O’Sullivan founded the ‘acceleratorVC’. He believes in creating real products and not digital ones. It is popular among biotech and food startups because it has access to real labs, maker spaces, and other resources.

7) Startupbootcamp

Investments: 424

Number of exits: 21

London, UK

About:

Startupbootcamp offers IOT, Fintech and Foodtech programs all over the globe, from Singapore to London, Mexico City to Dubai, Dublin, Dubai, and Amsterdam. Startupbootcamp has helped to accelerate startups with an average funding amount 1.168M euros.

8) Internet Initiatives Development Fund (IIDF)

Investments: 335

Number of exits: 21

Moscow, Russia

About:

The accelerator specializes on startups in Cybersecurity and Retail, Adtech Adtech, Edutech and Big Data. The basic online program has over 4,500 participants each year. There are also 20,000 attendees at hackathons and events.

9) Wayra

Number of investments: 960

Number of exits: 18

Slough, Buckinghamshire (UK)

About:

Wayra was founded in Latin America and expanded to Spain after which it launched in the UK. Telefonica, one of the largest telecommunications companies worldwide, finances the accelerator. Wayra invests up $50k in startups, boasting that 45% of its ventures are founded by women.

10) Chile

Investments: 837

Number of exits: 16xits

Santiago, Chile

About:

Startup-Chile is one of the fastest growing, most unique and active accelerator programs in the world. The Chilean government launched it to attract investment and entrepreneurs. Accepted entrepreneurs may receive equity-free funding up to $80k and other perks up to $100k. The S Factory is a pre-acceleration program that Start-Up Chile offers to female-led startups.

Success based on aggregate amount of dollars

Recently, I came across SeedDB data containing information about seed Accelerators and their portfolio of companies.

According to Seed-DB data, it is worth noting that the top ten accelerators worthy of mention in this category are:

1. Y Combinator – $5B
2. Techstars – $1B
3. AngelPad – $493M
4. DreamIT Ventures – $397M
5. fbFund – $359M
6. LaunchpadLA – $185M
7. SeedCamp – $137M
8. NYC SeedStart – $130M
9. Amplify.LA – $57M
10. Wayra – $44M

With all of this in mind, it’s important to mention that AngelPad was able to generate $493M using a fraction the portfolio companies than other top-tier accelerator programs.

It can be scary to start a business for the first time if you haven’t done it before. It takes planning and hard work, not to mention the time involved. It is also difficult to sustain a business for more than five years.

There are nine basic strategies that you can use to get your startup up and running.

1. Start with a great idea

The first step to starting a business is to find a problem and a solution. Because successful startups start with business ideas that meet the needs of a specific customer group, this is why they are so successful. Your idea does not always need to be new. It’s possible to update existing products and services in a way that is better for consumers. It can be as easy as:

• Modifying the appearance of the product
• Adding a new feature
• Customers already love your product? Find a new way to use it.

Apple, for example, started with Steve Jobs’ original idea of a computer. Since then, Apple has created improved versions to better suit the market. Apple has also been constantly improving the functionality of their products, such as iPads and iPhones. Apple is adding a keyboard to iPads to make it easier to use as a laptop. This is just one example of their innovations that have led to Apple being valued at over a billion dollars.

2. Create a business plan

Once you have an idea you can start to build a business plan. This will detail your products and services. You should include details about your industry, operations and a market analysis.

A business plan is essential for getting funding for your startup. Banks will lend more money to companies that have a clear business plan.

3. Get funding for your startup

Every business owner is unique in the cost of starting a startup. Regardless of your startup costs, you will likely need financing.

• Family and friends
• Angel investors
• Venture capitalists
• Bank loans

A business credit card is also available. Many companies offer promotional rates of 0% APR. This means that you don’t have to pay interest if the balance is paid off before the end date. Fundera has compiled a list with the best credit cards that offer 0% interest rates. We have partnered with Fundera.

You risk losing your ability to pay operating costs if you don’t have the funding you need or you can’t raise enough money. This could lead to your business being shut down. This could lead to you closing your doors.

You will need to calculate your cash flow and costs in order to ensure you get the correct amount. This includes the interest rates for your loans. You can then use FreshBooks or QuickBooks to track your expenses and to help you stick with a budget.

4. Be surrounded by the right people

Starting a business can present a lot risk. You will need to have the support of business advisors, such as:

• An attorney
• Certified Public Accountants (CPAs).
• Insurance professionals
• Bankers

In the initial stages of a small business, it is crucial to build the right team. You’ll need to be careful about who you choose.

• Co-founders
• Contractors
• Remote workers are also considered initial employees

5. Follow all legal steps

Opening your dream startup can be fun, from designing your product to setting up your office, and everything in between. To ensure your success in the market, you need to follow the legal steps.

• Application for a Business License
• Registering your business name
• How to get a federal tax ID
• Application for a trademark
• Setting up a bank account separate from your main account
• Get familiar with the industry regulations
• For clients and other people you want to work with, create contracts

6. Set up a location (physical or online)

Whether you are looking to set up a manufacturing plant, open an office, or start a business, it is important to decide if buying or leasing a property is the best option. You can often get tax deductions when you manage a commercial space. This is an advantage to owning your place. It can also be rented out for additional income.

Startups often lease their first premises to be able to invest in other areas of the business. It can also be cheaper to lease a space in a prime location for your startup. Remember that rent prices can rise unexpectedly and can cause you to have to pay more or even move. While you rent, you won’t have any equity.

It’s essential to have an online presence in today’s digital age. You’ll struggle to be successful without it. Because customers are shopping online more often and using Google to search for information about your products, this is why websites are so important. Websites offer many advantages, including:

• Your store should be open on weekends and holidays 24 hours a days, to increase sales.
• We can help you reach your customers all over the globe.
• Your brand’s credibility can be raised by allowing customers to leave reviews about your products.

A blog can help you increase your online presence. You can establish yourself as an expert in your area by starting a blog. Search engine optimization (SEO), can be used to improve your brand’s visibility in Google searches. It’s a smart idea to post on social media platforms where your audience is most active.

7. Create a marketing plan

Marketing is a time-consuming task that every startup must do. Marketing is an essential expense because it can help you succeed.

• Create a brand identity
• Standing out from the rest
• Establish customer relationships and loyalty
• Increase visibility which in turn attracts new customers
• Reputational Strengthening for your Company

You should consider these startup marketing ideas:

• Social media can be used to engage customers, promote coupons and deals
• Referrals are rewarded with rewards, which leads to more business
• Offer free samples and demos in your store
• Sponsor events to help get your name out in the local community

8. Create a customer base

To ensure your startup’s long-term success, it is important to establish a loyal customer base. Loyal customers are a great asset to your startup business.

• You can increase your sales because people are willing to spend more at your company.
• Your brand sends a message that your brand is trustworthy to potential customers
• Referring customers saves time and effort when you are trying to find new customers.

Here are some ways to attract and keep customers:

• Offering a great product and/or service regularly
• To keep them coming back, launch loyalty programs
• Affiliate marketing is a method of promoting products through social media. This involves paying influencers to promote your products to your target audience.
• Great customer service is our focus
• Market research can help you better understand your customers’ needs.
• Directly asking for feedback from customers

The International Council of Shopping Centers (ICSC), which surveyed 92% of shoppers, found that 92% said they were loyal to certain retailers because they offer prices that are fair and match the value of the product. 79% stated that it was due to product quality. ⁴

9. Plan for Change

In the first few years of their operation, startups change dramatically. The key to success is adapting your business model to the market and industry.

These strategies will help you make sure that you are ready to adapt:

• Hire forward-thinking to ensure your team is adaptable
• You can listen to the feedback from customers, suppliers, and other people you work with
• Keep up to date with the latest trends in your industry

Businesses that are open to change with consumers’ expectations are the ones that will be able to sustain themselves for many years.