The manner businesses sometimes begin has taken a turnaround. the newest bunk is “Start Up”. A start-up may be outlined as not a business on atiny low scale, rather it is a business designed in such the simplest way thus on zero in on a viable product for the market. The 3 necessary factors for the success of a start-up square measure beginning with smart individuals, deliver the merchandise that the market desires and involve as less money as doable. a great deal of start-up business opportunities are conceptualized between friends on a cup of tea or a mug of brewage.
Let us see how a start up starts in a college itself. Students during their studies work on projects. They can clearly see what is working in the market and what is not and consequently discuss if they were there, they could have done this and that to improve the situation. This discussion could be a starting tip of numerous start-up business opportunities. The students discuss these ideas with their faculty members, who are from industry as well. They do the required research, make a solid framework and present the idea to their college’s incubation cell. If they are able to convince the stakeholders about their plans, they get all the support, including finance for their start up and they venture it in the in-house incubation cell. Once the business gains momentum, they take it out of the incubation cell and continue on their own.
While it sounds all rosy, it actually is not. There are a lot of challenges with start-ups. Everybody is enthusiastic and excited initially but sooner or later, the excitement may fade off. The first challenge is getting the interest of financiers. A financier is putting his money in the venture and he needs to be ensured that the money is safe. Proper research needs to be done and presented in front of the financiers.
Second, comes, the valuation challenge! How much the business would be worth of, after 1, 2, 3 and succeeding years? This is a very important concern from the as well, from the financier’s perspective. Let’s say the financier is given 30% of the stake for 3 million dollars and after a couple of years the business has done unexpectedly well. The business is valued at 20 million dollars and if the financier wants to exit, she can take 6 million dollars (30%) and exit. Should the financier have been given only 20-25% stake in the beginning?
Another challenge is execution. Start up business opportunities can only be as good as its idea of inception, but the execution of the idea is far more important. How does one execute it better than the competitors? The next challenge is selecting the right team-mates who wouldn’t leave the start up on a rainy day. Doing the market research and doing it rightly are also the challenge of their own kind. A start-up is a wonderful point to start on one’s own and getting one’s ideas implemented the way one wants.