How To Start And Sell A Startup

Starting a startup is easy. The difficulty lies in long-term survival and in growing it into a profitable venture. The most exciting thing about entrepreneurship, which happens to be the most difficult thing to do, is not coming up with new ideas, but executing on those ideas. The truth is, you don’t even need new ideas. If you think you have a new idea, nine times out of ten, you don’t know the history. Ideas are all over. Everyone has ideas. What is lacking is the ability to execute. The great entrepreneurs are not rewarded for ideas, they are rewarded for startup launch and execution. In this article, we will discuss how you can start and sell a startup.

The first thing you have to realize is that success takes time. Don’t expect to start a business tomorrow and be a millionaire by the end of the year. Statistically, it takes 6-10 years for a company to grow to sufficient scale and cash flow generation for the investors to be able to take the company to exit the company. So plan to be in it for the long haul. Success won’t be overnight.

Identify Future Acquirers 

You most likely future acquirers are your rivals. We are talking about mergers and acquisitions here. The company’s who are most likely to want to buy your company are either those companies threatened by your success, or companies that see synergies with your business. Direct and indirect rivals are where you should look for future acquirers. 

What you need to do is conduct an industry analysis and create a strategic map of your competitive landscape. Not only will this give you an understanding of the competitive forces shaping your industry, it will help you discover potential buyers in areas you may not have thought to look. 

Another way to find potential buyers is to speak to people in the industry. This is a time when, because you are new to the industry, they are more likely to be open with you and share ideas about the competitive forces within their industry. 

Determine Your Value Proposition 

If your business does not have a unique value proposition, then it will lack pricing power and be unable to differentiate itself from its rivals. So, in the research phase of your startup launch, you need to find that one thing that only you can do. The biggest competitive advantage of them all is barriers to entry. A company that is so strong that it is impossible for new entrants to emerge, will be very valuable.  Take Google, for example. It is incredibly difficult for any other search engine to thrive. Google owns the market because the nature of search engines is such that the best search engines are the biggest search engines, so a new search engine will be inherently inferior. Google achieved this dominance by developing a revolution search algorithm. That was their value proposition. Your business needs one too. If your business can’t defend its turf, it can’t survive. 

Conclusion

When the time comes, and your business has survived and managed to thrive, you can begin approaching those rivals you identified in your industry analysis. You can also use tools like Empire Flippers and Flippa to find other acquirers. One thing that entrepreneurs often forget at their startup launch is the importance of having an estate plan for a startup. This is crucial to ensure that your estate is in order and that the business can survive if ever you are incapacitated or pass on. 

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