Building a startup as quickly as possible comes with a high risk of failure, especially during the first two to five years. According to Zippia research, only 40% of startups turn a profit, with 30% failing and the other 30% continuing to lose money in their lifetime.
Magic provides cost-effective support in scaling up your business quickly. Grow your team and increase your productivity with virtual assistants who can help in administrative work, recruitment, marketing, and more.
What Is a Startup: Types and Business Ideas
A startup is a business venture that is in the initial stages of operations for a product or service an entrepreneur believes there is a demand for. It tends to prioritize scaling up and scaling fast.
Its main goal is to target a niche market with a minimum viable product (MVP) and improve on it. In creating a startup, identify the type that complements how you can grow your business. Here are six types of startups with low investment business ideas you can review:
A scalable startup takes a unique idea intending to create an easily repeatable and expandable business. To support high-growth initiatives, a scalable startup seeks capital that is usually funded by angel investors and venture capitalists.
A good scalable startup idea is a real estate business since it’s easy to finance and build once you have equity in real estate.
A buyable startup is built to be sold to a larger enterprise in its niche so it can be improved over time. They are ideal for entrepreneurs who want to build on an idea with great growth potential but don’t want to commit to running it long-term.
Most buyable startups are tech companies, specifically web and mobile app startups that are bought off by internet conglomerates such as Google and Meta.
A lifestyle startup is established by an entrepreneur looking to turn a hobby or interest into a profitable business. It has little to no intention to scale up since the main goal of this startup is to be a platform for entrepreneurs to pursue their passions while also earning on the side. An example of this is a dancer offering lessons or a baker selling limited batches of baked goods.
Small business startups
The most common type of startup is small business startups that often remain at a modest scale for the rest of their lifetime. They are usually created by regular people which means that they are self-funded and grow at their own pace.
Small business startups are a lenient and enjoyable form of livelihood since there’s no need to conform to the needs of investors. Typical small business startup ideas are a restaurant or a grocery store.
An offshoot startup is a company that starts small with a product or service and is globally recognized later on. It branches off of a larger parent company to adapt to changes in customer preferences, new technology, and competition.
An example of an offshoot startup is a dropshipping business that diverged from a traditional retail store to accommodate the new shopping preference of customers.
Dedicated to doing good for society, a social startup raises awareness about a certain issue or actively makes a difference that benefits its workers, community, or area to which it belongs. A popular idea for a social startup is a sustainable fashion venture with items typically made by local craftsmen.
How to Set Up and Scale
Everyone has ideas but not all can turn them into a successful startup. Even small business startups require a lot of planning and decision-making along with accomplishing a series of legal activities to get them off the ground. You also need to work just as hard to keep it afloat.
It’s a long process that’s necessary to ensure your MVP can develop over time and you can scale up without any hiccups. Below are the important steps you need to take to build your startup:
1. Do market research
Conducting market research will inform you if your idea has the potential to become a successful business. It gathers information that also helps you determine the target market for your small business startup ideas.
Methods on how to conduct market research include:
- Survey — A method that fields a series of questions to a group of people to gain insight into the buying potential and attributes of the target market.
- Interview — A one-on-one conversation with people in your target market to collect information and consumer opinions about a range of topics.
- Focus group — A group discussion of six or more people led by a moderator to identify consumers’ feelings and perceptions about a product or service.
- Customer observation — Also known as field research, researchers directly or indirectly monitor how consumers behave and interact in a natural setting.
2. Write a startup business plan
A business plan acts as your guide on how to structure, operate, and grow your business. Small business startups use it to convince people to become investors or business partners. The main components of a business plan are:
- Executive summary — Tells your readers what your startup is about and why it’ll be successful.
- Business description and structure — Explains what your startup is offering and why you’re doing it.
- Market analysis and strategies — Shows sales forecasts, public relations, trends, and themes of your business against your competition.
- Management and personnel — Supplies an organizational chart and information on the small business owner and the people who will contribute to the success of the venture.
- Financial documents — Provides projections on profit and loss, balance sheets, cash flow statements, and capital expenditure budgets for the next three to five years.
3. Assess your finances
Funding a startup business is an important financial choice for any entrepreneur since it affects how to structure and run the startup. There is no one-size-fits-all financial solution for small business startups so you will need to determine if you will be self-funding, getting venture capital, or a small business loan.
4. Choose a business structure
A business structure dictates how small business startups define ownership, limit personal liability, and manage taxes. There are four types of business structures you can choose from:
- Sole proprietorship — A person has complete control over a business.
- Partnership — Two or more people own a business together.
- Limited liability company — A private limited company that combines the pass-through taxation of a sole proprietorship or partnership with the limited liability of a corporation.
- Corporation — A group of people acting as a single legal entity but is distinct from its owners.
5. Find a business location
Small business startups strategically choose where to locate their business since it determines the taxes, zoning laws, and regulations the startup will be subject to. Choosing a business location also depends on your target market, business partners, and your personal preferences.
6. Register your startup
Once the business structure and location are determined, you’ll need to register your business as a distinct legal entity. Enlisting a business name to state and local governments yields personal liability protection, legal benefits, and tax benefits.
7. Get business license and permits
Small business startups need to obtain licenses and permits from federal and state agencies to legally operate. An application for Employer Identification Number should also be submitted to pay federal and state taxes. These business startup legal requirements depend on your location and industry, and some could expire after a limited period.
8. Open a bank account
A business bank account allows you to accept credit and debit card transactions while staying legally compliant. Setting up a business bank account includes checking, savings, credit card, merchant services accounts, as well as benefits such as a more professional image and personal liability protection.
9. Build your team
Even small business startups need a team to get it off the ground. Look into your business operations and fill in roles according to your business structure and funding.
To work efficiently together as a team, define responsibilities clearly and establish the best productivity system for your business. Your team can also include business partners and third-party personnel like virtual assistants to help run your business better.
10. Develop and market your brand
Building your brand helps sell your product to potential customers through traditional and digital marketing. It allows you to spread the word about your startup, reach out to your target audience, and improve how you market your product using customer data.
How Magic Helps You Reach Your Goals
Building a startup entails understanding and dealing with many issues from financing, human resource, sales, marketing, and more. But you don’t have to do everything. Get on-demand assistance from Magic to make processes more efficient and manageable.
Magic is a quick and easy solution to finding a virtual assistant to delegate tasks to. A Magic Assistant can ease your workload and help hit your startup goals as you look into scaling up.
Some of the roles a Magic Assistant can perform in small business startups include:
- General Virtual Assistant — A virtual assistant can act as the administrative backbone of your startup so you can concentrate on scaling up. They can help in processing documents to start your business and take on day-to-day activities such as email and calendar management.
- Bookkeeping Assistant — A Magic Assistant can manage your everyday accounting concerns such as invoices, tax filing, and financial reports.
- Digital Marketing Assistant — They can help build the online presence of your startup through ads, brand campaigns, and social media management.
- Project Manager — A Magic Assistant can organize and manage your projects from start to finish to ensure that you’re on time and within budget.
Launch and grow your business easily with a flexible workforce. You can also use different Magic Integration tools to readily add your virtual assistant to your daily operations. Book a call with us today and get matched with a virtual assistant most suited to your business needs within 72 hours.