Having a vision for a new product or service and wanting to turn that dream into a reality is a huge step. If you are familiar with business terms, you’ve likely heard of others in similar positions launching startups. However, you may be unaware of what a startup entails and what business development tools are needed to begin this process. Use the following guide to learn more about startup companies and how to grow a business.

What Is a Startup Business?

A startup company is created to develop a new product or service where success is not guaranteed. The most important element of this definition is the risk of the undertaking. Startups are in the early stages of business development and are sometimes self-funded by a small team of founders. In many cases, founders seek funding from venture capitalists and angel investors.

Many people confuse startups with small businesses. They often appear to be similar from an outside perspective, but their goals and funding methods differ significantly. A small business is expected to sustain itself and generate revenue from day one, while a startup may take years to become profitable. While most startups begin as small businesses, not every business is considered a startup. 

Startups are focused on growth. The goal of the founders is to solve a modern problem and develop a business model that expands the scale of their company to a mass market. They are built to be innovative, filling needs missing from a market. If you’re working with an idea that already has its place, your business would not be considered a startup.

What Tools Do You Need to Start a Company?

When planning a startup, you need to have a vision. The ideas need to be specific, fulfilling a real need that you can pitch to investors.

This process also costs money, and you will need to decide how to raise funds. Some expenses include equipment, supplies, utilities, legal and accounting fees, advertising, employee payroll, and consulting fees. Aside from investors, you might cover these costs through bank financing, loans, personal savings, or assistance from a generous friend or family member.

Every business, no matter the size or industry, requires a plan. An effective business plan should include a summary of your idea, products, and services. It should also outline projected costs, short- and long-term goals, an overview of target customers and suppliers, and information on how you intend to make a profit. If you decide to apply for a bank loan to fund the project, a detailed plan is required.

If you’re ready to grow your startup, turn to the team at Mebane Business Association. For more than 25 years, this nonprofit organization has been dedicated to building the community through business development and networking opportunities. When you become a member, you’ll meet and collaborate with other local businesses and participate in charity outreach events that support the community. Call (919) 304-3737 or visit them online to learn more about membership.