July 8, 2017
With modern technology, you can launch a startup in under an hour. Seriously.
On the other hand, turning it into a viable and profitable business takes time and money. How much? That is the question of the day. On average, it can take around four years to turn a new venture into a real business. Yet, it can take up to 10 years to ensure it is as successful as you initially had in mind.
When it comes to securing investments for your company, the time frame can vary based on your network, fund availability, and preferences. Some startups want to be completely independent from a multitude of investors. In contrast, others want to get as much capital from as many sources as humanly possible.
According to Outdoorsy, the Airbnb for RVs, founder Jeff Cavins and his co-founder Jennifer Young, invested their life savings into the company in 2014. They also both sold their houses to help fund their dream of giving more people access to the great outdoors by connecting RV owners with campers who want the RV experience.
Today, Outdoorsy is the largest and most trusted RV rental marketplace in the world. So, the investment paid off for them. It goes to show that if you have a good idea, along with the passion to make it work, that the investment can vary. Read on to learn more.
The First Year Is Full of Excitement
The first year may be full of a lot of wins. It's not very difficult to incorporate and launch a website. You may even garner some press. All of a sudden, you feel as if you're on top of the world. One day, you were working 80 hours a week for someone else. The next day, you're running your own business with a positive review in the local newspaper. You may have tons of tiny victories that make you feel as if you are moving full steam ahead.
The only issue is you are probably not making a lot of revenue because you are simply focused on getting your products and services out to market. This is similar to getting good grades during your freshman year in high school. You're not getting into an Ivy League school yet, but you're doing well with the small victories.
By year two, you might feel a bit less accomplished than you had previously thought. You're realizing that starting a business is not the same as running a successful one. You may or may not have long-term customers. Your credit card might be maxed out. You may even start to worry whether you made the right decision.
This is the time when you begin to understand why so many people say launching a startup is hard. The only thing you can do in your second year is to keep going for those small wins. This is also the time to put your nose to the grind with sales, marketing branding and more.
The Importance of Branding
You must be very thoughtful about your brand. One of the biggest mistakes first-time entrepreneurs make is overlooking the importance of building a brand. The market won't know who you are until you tell them what your business is about. So do it.
Branding is a necessary step for positioning your product in the market. In addition, your brand must be memorable enough to generate recall. Otherwise, how is anyone going to find you and your business when they need it?
What About Funding?
As shared earlier, you can invest in your startup with your own savings. You can even get some help from family and friends on crowdfunding platforms like Indiegogo and Kickstarter.
When it comes to funding from venture capitalists, the earlier you accept funding, the more expensive it can get. This is because you may need to surrender some equity. It's almost better to fine tune your vision and work on validating your company first before seeking funding.
Put Effort Into Marketing
Once you have a product or service ready for sale, one of the best things you can do is to market your product or service. This is one of the most profitable early investments you can make into your company. You need marketing to get in front of people who will actually buy your wares. Word of mouth can only carry your business for so long.
To start making real profits, you need to reach a larger audience. The only way that can happen is through marketing. The good news is marketing doesn't have to be complicated when you use avenues such as Google or Facebook ads. Just make sure you set up a budget for marketing, and get started right away.
Launching a startup is not easy, and validation does not happen overnight. Nonetheless, what matters most is a passion for your business and the will to see it succeed.
Read more tips about building a successful startup on TechCo
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