• jzitek@harborcapitalgroupinc.com
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Considerations When Launching A Startup


Launching a startup business from scratch is a massive undertaking. It is as if you have to manage somehow an engine in which there are many moving parts,  all moving at the same time. Every small business owner understands how complicated this process can be, mainly because the company is in an early stage and unable to afford a lot of professionals’ to help.

In most cases, a one-person owner serves multiple roles as manager, bookkeeper, marketer, and customer service. There are fun parts such as brainstorming business, a name or drawing a product design. And then you have to deal with the stressful parts, for example, registering with the government, filing the taxes, and making financial decisions.

 The entrepreneurial world is full of stories of success and failures. With careful planning, however, you can avoid the latter and lean toward the former. A business plan exists to help you launch and run the business using the methods you prefer; every action listed in the document allows you to take a step back and review your strategy.

A useful approach to getting the business off the ground as smoothly as possible is to consider all possibilities and think through every aspect which may affect the company as it grows. In short, you have to consider the legal side of the business, marketability, organizational structure, and of course, investment.

Key considerations

 There are at least ten significant considerations to think through, even before the business officially exists.

 1 Legal setup

 Here is one thing to put in mind: venture capitalist or any other investor will not want to pour money into a startup that doesn’t have a reliable legal structure. If the legality of your business is in question, outside investment is hard to come by. Do not make rookie mistakes such as failure to register with the local authority, registering incorrect business forms, having poor contract agreement with co-founder, poor employment documentation, or using a weak contract. It can be a headache to have proper legal setup from the start, especially if you have no help, but you cannot ignore the importance of this matter.

 2 The market

 Startup owners are naturally excellent problem-solvers. They have ideas on how to create products that will solve existing problems consumers have. But in reality, everybody can have ideas; the most significant difference between business owners and everybody else is the ability to transform ideas into a profitable venture. Market research is the key. You need to conduct research continuously to see how consumers at large (or those in your target market) respond to the solution you propose. Document your research, for example, the problems your products solve, who the customers are, what the competitors do, and how big the demand is. In short, you need practical knowledge of the market before you launch.

3 From ideas to reality

 All business ventures have challenges. One of the first obstacles is bringing your idea into reality. Chances are you don’t have a factory capable of mass-production or a team of professionals to provide services. YOu will need to develop collaboration with other businesses to help you execute the ideas, run production, and bring the products to market.

 4 Organizational system

 It would help if you had constant report updates to know how the business is doing on a day-to-day basis. Critical financial information of the company must be accessible and current at all times. Otherwise, you cannot devise an effective plan to keep the venture going.

 5 You need advice from professionals.

 Admit that you don’t always have the right answer to every question that arises during the launching process. There can be all sorts of legal issues and organizational problems for which you need advice from more knowledgeable people. It costs money to consult professionals, but it would be money well-spent. Investors will also take you more seriously if you make the right decisions based on suggestions from the experienced.

 6 Fundraising

 Unless you have a lot of money at your disposal, you cannot stay away from investors. Just like with everything else, do your research regarding potential investors, for example, their track records in your industry/niche and how to get in touch with them. Investors have the money, and sometimes you have to devote serious effort and time to meet them. 

7 Not every investor you meet will be interested

 Your startup is not worth a billion-dollars; you are not a Unicorn. It only makes sense if some investors turn down an offer to invest. Improve your ideas or look for other investors. Sometimes an investor wants to wait a little longer until a startup shows signs of development, and only by then, the decision to fund the company comes to the surface.

 8 Startup ownership

 Every investor has share ownership of your startup company. Be careful with what you give away. Otherwise, you may lose the company entirely. Remember that you can always seek advice from professionals to avoid this mistake. Investors will appreciate your decision not to give away too much.

9 Vesting

 Most investors want you to stay active in the company, at least for the first several years of development. You understand the idea better than anybody, and therefore you are the best person to oversee how the plan transforms into profits.

 10 Have a legal counsel

A lot of startup owners rely on their investors’ legal teams for documentation and advice. Although it is not always a bad idea, you’ll feel more confident with a legal counsel who works for you and your best interests. In every negotiation and tough financial decision, the legal counsel will help you understand all the risks involved, including when you have to deal with your investors.


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