Are you thinking of starting up a new business, side gig, or venture? Los Angeles has boomed in the last few years with new startups, ventures, and projects founded by creative, IT, tech, and other professionals. LA hosts the third largest startup ecosystem in the world, and the startup world is growing exponentially with every years that goes by. Here are some big-picture items to consider if you are thinking of starting up.
Uniqueness or Improvement?
Is your idea or project unique and interesting? Does it improve on an existing product or service that you might be able to provide better, or more cost-effectively to consumers? Would it fill a need in the marketplace that does not currently exist? Coming up with the idea for start up can sometimes result in roadblocks, but the best place to start usually tends to involve focusing on your unique talents, gifts, hobbies, and passions, or a hole in the marketplace that is unfilled and has a ready consumer base. There opportunities everywhere, is often just a matter of identifying them.
The Business Model
Will you have a business model that is sustainable in the long term? The term “business model” is just a fancy phrase for having a plan to run a business that makes money. Most individuals who are thinking about starting up have goals of becoming independent, with the financial freedom to leave the daily grind of a 9-5 job but while doing something they love. It is important to distinguish hobbies from businesses that can make sufficient money to provide for the entrepreneur, and his or her family, and provide a comfortable degree of wealth. Sufficient planning should go into your idea to determine whether your business concept can launch successfully and remain profitable over long period of time. A business plan, including a profit/loss forecast and cash flow analysis, can help you determine whether the business is viable.
Startup & Survival Capital
One of the major hurdles that often prevents entrepreneurs from starting up his lack of startup capital or survival money. After all, not only will you need enough money to get your start up going, you will also need money to live off of, pay bills, expenses, loans, etc. Funding can come from a variety of sources, including “love money” given by family and friends, bootstrapped funding, which is, the entrepreneur’s own savings. Other kinds of funding or financing can come from investors, incubators, and traditional loan programs. Crowdfunding sites can also offer unique sources of obtaining funding for projects or milestones.
Who Will Be On Your Team?
Will you be working alone, or with business partners? Picking the right business partners is critical to the success of the business, if you intend to work with others. However, it is not a necessity to have business partners. Plenty of startups begin with an individual proprietor who runs the business successfully using employees, contractors, or other hired help when necessary. If your goal, on the other hand, is to invent a new product or service, for mass distribution to buyers across the country, eventually resulting in a public offering (IPO) then at some point you will definitely need help.
Whether you will be dealing with business partners, employees, investors, lenders, vendors, contractors, or others, you will need good business agreements, contracts, and advisors to help you start up. Picking the right business structure, getting the right licenses, approvals, permits, and other requirements in place, and properly documenting your business’s relationship with third parties can avoid significant headaches down the line. We assist new startups and entrepreneurs with a wide variety of tasks, including formation, contracts & agreements, employees, intellectual property, insurance, regulatory matters, and others. For assistance on any of these matters, please feel free to give us a call at (213) 403-0130 and we will be glad to help.