Business Start Up
Business Start Up
I would like to start up a business for software development. The company will have software developers to create applications for mobile and software for computers to target different companies. With the two products of computer software and mobile applications, the market is broadened. The top consumer targets include real estate companies, play stores for mobile, banks and financial institutions, and other startup companies that require website building and maintenance.
Good business plans capture different aspects of entrepreneurship. A good business plan should present the planner as a classic capitalist who presents facts on how they can make profit. As such, there is a need to explain the success factors such as having state-of-the-art equipment, exceptional locations, fair prices, and ready markets. The business plan should explain why added debt money and equity translates to more profits. As such, the potential lenders will understand your chances for success (Mariotti & Glackin, 2012). The business plan should have a market analysis that is meticulous. The entrepreneur will, therefore, be able to establish distribution, pricing, and strategies for promotion services. It also provides an indication of the growth potential within the industry. Projecting the market share in a business plan is a subjective estimate. The projection is based on both market analysis and competitive and highly targeted distribution. Market share projection needs to consider the growth in the industry that will increase the total users as well as the conversion of the product users from the total feasible market (Mariotti & Glackin, 2012).
Market share projection
Positioning of your business
Operations and management
The percentage of startups that fail is 90% translating to nine out of ten (Entrepreneur, 2016). Such a cold statistic is meant to make entrepreneurs work harder and smarter to ensure that they launch successful businesses. Entrepreneurs must work on and not in their businesses. Otherwise, when they are caught up in the numerous phone calls, emails, presentations, and meetings, they will get distracted from the heart of their businesses. The main reasons why startups fail include:
Imperfect products for the market
Most startups make products that are unwanted by the market. The lack of a market need results in close to 42% of the failure of startups (Entrepreneur, 2016). If an entrepreneur will invest time in making a product, they must ensure that it is the right product.
Ignoring some business aspects
Most startups will fail since the entrepreneurs concentrate more on having a good product idea and a well set technical team. However, they ignore the process involved in the business and other issues in the company. As a result, they are deprived of the company’s future. Despite the business processes being referred to as boring, the startup must not segment responsibilities since things are more organic in startups resulting in overlapping responsibilities.
Running out of cash
Most of the startups also fail when they eventually run out of cash. The reasons for running out of cash is poor and improper budgeting, failure to plan how long it takes to raise funding, and a high burning rate in the business.
Invention of concepts and not products
Most startup entrepreneurs concentrate on the fascinating inventions and ideas instead of complete products. Customers are interested in buying complete products that can be used in making the world a different place.
Gaps in strategies
Most startups fail for leaving gaps to be fleshed out later. When they leave out low-cost materials, availability of infrastructure and components, they turn out to be their showstoppers.
Why most Businesses are formed as LLCs
Most businesses are started up as limited liability companies because they possess unique and favorable combinations of business, tax, and legal attributes that are absent in other single entities. When they are properly structured, limited liability companies provide benefits of protection of limited liability, operational flexibility, and low tax restrictions.
In order to start up a limited liability company, one needs to:
Choose a business name
The business name must be different from the already existing LLCs. It must also indicate that it is a limited company. Once registered, the business name becomes registered by the state.
Articles of organization legitimize the LLC and includes the other information such as business names, names of members, and addresses.
Create an operating agreement
It is highly recommended that the multi-member LLCs have operating agreements that structure the company’s finances and provides the regulations and rules for efficient operations.
Obtain permits and licenses
The licenses are given after registering the company. The licenses come along with the relevant regulations that vary by the state, industry, and locality.
Hire the employees
The hiring of employees must ensure that the labor laws are observed.
Announce your business
Some states require that the LLC business formation be published in a statement in the local newspapers.
Types of Contracts
Several contracts are needed to be put in place in the new business. First, it is important to have written contracts with the companies that will require website maintenance and building. As such, there is more certainty for both parties more than the verbal contracts (Emanuel, 2010). Secondly, there is a need to have period contracts for the mobile companies that require mobile application development. As such, once the application has been developed, the company will be called upon to maintain the applications as per the consumer demands.
Emanuel, S. L. (2010). Contracts. New York: Aspen Publishers.
Entrepreneur. (2016). Elements of a Business Plan. Retrieved from https://www.entrepreneur.com/article/38308
Mariotti, S., & Glackin, C. (2012). Entrepreneurship: Starting and Operating a Small Business (3rd ed.). Upper Saddle River, N.J: Pearson/Prentice Hall.