A startup is a great way to take an innovative product and profit from it. For every startup that succeeds though, many fail. That high risk / high reward environment is an essential part of the startup process. You will have to front many of the startup costs to get operations running. None the less, an entrepreneur with a great startup idea can be intimidated by the path to success in a place like the USA. The good news is that founding a successful startup in the USA is pretty straightforward. Here are 5 steps to found successful USA startup.
Refine Your Product
The only way to build a USA startup is just to begin working on your product. You need to take the idea in your head and build it into something that can provably turn a profit. As you refine your idea, make sure to also study the market around you. That will inform how your idea needs to change to make it work. Do not be afraid to do a little experimenting at this point. This is the stage to take your time, because at this point it is just you and the work.
To ensure success, do not go into a US based startup alone. This will limit your startup since so much will be dependent on your own physical and intellectual limits. It is far safer to have between two and four partners with revenue share. To find these partners go to networking events and talk with people. You can also look to your friends and family for possible candidates. A good partner candidate should have unique skills they can bring to the table. However, also consider how you and the partners mesh. You will be spending a lot of time together as the company takes shape and you will have to make many hard decisions with them. Make sure you and your potential partners are a good match and get along.
Choose A Corporate Structure
Now that you have a product and partners, you need to figure out how you want your company structured. The US government breaks companies into a handful of business types. The most common for a small company is the LLC. A limited liability corporation, or LLC protects your personal assets from company losses and is easy to maintain. However, in an LLC you don’t get corporate tax cuts, and venture capitalists will avoid working with you. Research your options before you decide on a corporate structure.
Raise Startup Capital
To build a successful startup in the USA, you now need cash. The best way to get this capital, you’ll need to attract investors. This might concern you. You came into this because you had a great idea, not because you are a business genius. The good news is that attracting investors is not too hard. The most important thing you need to do, is provide strong proof there is a market for your product and you know how to access it. The rest of business talk always comes back to that. If you can stay on message and provide proof, you’ll swiftly find some investors ready to put money towards you.
Sell Before You Have The Product
Now that your company is founded and funded, the essential thing to do is sell the product. Do not worry if you do not yet have any products to sell buyers. You need to build up interest in the product. That involves setting out marketing and building a brand funnel to drive potential customers to you. Tell these customers by pre-ordering your product they will get it at a discount. This will build a regular influx of cash flow coming in before you start to scale up your office and expenses. By the time you need to spend on manufacturing, you’ll have steady money coming in. This will make it easier to get loans and more investors.
Founding a USA based startup can be worked out in just a few steps. Start by refining your idea into a bankable product. Find some partners to help carry the load. Decide how you want to structure your corporation. Use your knowledge of the product to locate investors. Sell the product before you make it to ensure a steady cash flow. With these steps and a little hard work, you can be well on your way to a successful USA startup.