Updated: Jul 21, 2020
If you want to start a business, you should take the following six points to start a million dollar company. A company is not the same as a business. Business is your exchange relation with your customer - what do you offer them and what price are they willing to pay you keep your offer. Business is also called traction or validation. Or a value proposition accepted. A company without business is very common, especially for startups. All the good businesses have been taken by existing players, you need to fight to earn a place and earn customer following.
Success companies are rare. It is started by experienced founders who have failed in the past. Valuable knowledge are the ones no on teachers - hence you must experience. The vast majority of world is what you don't know you don't know, even for professors and good students. It is knowledge about products, about markets, about psychology, about relations.
Step 1: Identify what business you want to build. This include identification of the industry, market and target audience. Identify how to enter the market, draw the customers, make profits, and manage your company's growth.
Step 2: Validate as quickly as possible that someone will BUY it, rather than just look at it or just give you compliments. Never take 6 month and 2 years before you have a perfect MVP.
People don't just buy a lot of things. We see people buy things all the time, but having buyer is not the same as "selling". Selling is when people already decided they will buy and you are making the buying happen. In startup, whether people will buy remains a mystery. People buy for pleasure, for security, for urgency.
The first hurdle is find buyer. Think about it, if your company can make something people would buy, it would be like having a Public Company - oh my God, you found a path to rich and money if you can scale it.
Whether people will buy is not salesmanship or dropping the price. If people don't buy you, they won't take your stuff for free.
Most companies sell things no one want. Many startups can not sell what they can build, and can not build what can sell - they are "stuck up startups".
Step 3: Give your company a name. A name of a company is like the name of a person. It makes others know what you aspire to be.
Step 4: Don't plunge - try prepare and train with side hustles. If you can not go past step 2, you should either (1) follow someone else's ideas and make a business by improving on someone else's business; (2) do side hustles to practice and train. If you have to make a bet, make a safer bet so you don't lose everything. You don't have to use your own idea. It is not stealing if you use other people's ideas. An idea belongs to everyone. You compete to realize it.
In startup there is no vacuum. There is no "chancing up" things. You prepare, you reconnaissance, you do your homework, and you fight. Startup is competition for deep knowledge, not for broad knowledge.
Step 5: If you want to do something, do it. If you must make something first and then try to sell it on a haunch or taking a chance, remember this is a lottery approach. It is high risk although it seems sensible. In that case, you must use your own building skill to build something. Don't bother contracting something out. If you don't have building skill, don't have customer focus, and you still want to focus, you should try dropshipping or something easy - but the result is almost certain doom. However, you can say "I started". You are on your way to get experience.
Step 6: Get the corporate structure taken care of. If you don't want to bother with steps 1-5, and just want to have a company so you can call yourself the CEO on a business card, you should get your company registered. You need to take care of legal registration, trade mark, and then viola, you are a official corporate tax payer. Keep in mind that companies have no business, have no profit, has no growth potential. Starting a bad business may be useful, but it will be a headache later.
Registering a company is the easiest part. A solo company is almost too good to be true. And it is often untrue.
No matter what, startup is to fail forward. No matter how prepared you are, startup test your ability to carry out an idea, not the idea. No one does a perfect thinking and score a high mark - you make 10 junks and 1 treasure. The failures are needed. It means you are trying hard enough.
To be serious, I wish people prepare carefully before starting. If you ask me whether you should start, I will say "please don't start". But if you still wants to do, I hope you don't do this for chance, for lucky strike, for being cool, or for money. Then it is good no matter what - it will make you grow so much.
Your first try is almost guaranteed to be failure. It is not about you, it is about your preparation. If you ever get to do the startup one more time, you would start by planning better.
There are three hurdles a company has to go through.
Hurdle 1: would someone buy it;
Hurdle 3: Would you be able to grow or would sales remain a trickle or be stagnant.
It is important to plan ahead. A business plan is a plan for business. You make th eplan for yourself, not for a show.
It is not just a PPT document for the investors. The investors are hitchhikers - they minute they land on your company they want to take their money in multiples and leave. The investors are not partners.