Starting a Tech Business in 2021: Everything You Need to Know
This article will explore what entrepreneurs need to know before starting a tech business.
05:43 20 September 2021
To deal with an economy in flux, entrepreneurs can form a startup. Startups allow the business owners to be with their own boss and to focus on something they are passionate about. To successfully launch a startup, entrepreneurs have to plan, consider risk, be financially responsible, and invest time as well as money, while having no guarantees.
According to research, 90% of startups fail. 21.5% of startups fail in the first year, 30% in the second year, 50% in the fifth year, and 70% in their 10th year. These statistics affect all industries, including the tech industry. Technology has offered opportunities for small business owners to compete with larger companies, but competition levels are at an all time high which does prove to be an obstacle. To prevent failure, entrepreneurs need to equip themselves with tips, tricks and tools before starting their new venture. This article will explore what entrepreneurs need to know before starting a tech business.
Give it proper thought
Many entrepreneurs aim to start a tech business with an idea based on building software or integrating tech into products, but these ideas may not always be viable. The ideas may also not be at the level required to break into the competitive market. But, if the idea and concept is viable and able to offer something that has not been offered as of yet, entrepreneurs should move onto step two.
Entrepreneurs need to define a MVP
An MVP, a minimum viable product, is the most basic functional version of a product. The MVP should encapsulate all the basic features needed to solve the problem it was designed to solve.
Validating the MVP
Entrepreneurs will be able to validate their product by asking themselves whether the product solves a problem and if it improves the lives of consumers. Other ways to validate the product is by asking:
- Are people willing to pay?
- Are investors willing to invest?
- Would the owner be able to profit off of the product in a few years?
Considering the competition
Although competition is viewed as a negative aspect of business, it does assist in building a tech startup. Competition allows demand for a product, which in turn validates the product. Competition also offers the opportunity for new startups to learn from the mistakes of established tech businesses.
Basic business workflow
Businesses need to focus on organizing their workflow in order to manage the business. Workflow is the way people complete tasks. To organize the workflow, business owners would have to define and assign tasks for people/employees to complete. By doing this, entrepreneurs would be able to determine how the workflow works best for the business and for the employees.
Businesses need to ensure that there is always a plan in place to execute whatever and whenever needed. This allows businesses to have a safety net of sorts. Businesses, no matter at what stage, should also always have an exit plan for the worst case scenario to protect employees and the owners.
To reach success, entrepreneurs need to understand their industry to successfully and strategically market the company and product. By starting local and networking, entrepreneurs would be able to learn from them, whether it is valuable business tips or insight into what is needed in the community. By doing so they would also be able to find potential clients or business partners.
Startup companies, especially in the tech industry, have proven to often be volatile and more prone to failure. For entrepreneurs to avoid this, they would have to be able to manage risks, or hire someone to do so. Being able to successfully interrogate and assess failures, business owners would know what parts of the plan to execute, or when it’s time to execute the exit plan. Not all failures equal the end.
Hiring a team
No matter what goods or services a business offers, if the employees of that business are not suited to the business, the startup will not have healthy growth. The roles of employees all culminate to make important differences in the business which affects the success of the business.
When hiring employees, considering culture fit is very important to retain great employees, with considering their skillset being the second most important. The team selected should reflect the business’ vision, values, beliefs, behaviours and goals. Employees which do not represent these factors to fit in current work or desired culture may lead to poor work performance and to lower levels of job satisfaction.
To form a successful and profitable tech business, entrepreneurs need to have a clear vision. By having a well thought-out idea, determining an MVP, considering their competition and figuring out a basic workflow, they would be off to a good start. For entrepreneurs opting to form a tech business in the US, they would need to keep in mind that they would likely need the services of a registered agent when forming and maintaining their business. To choose a registered agent service best suited for the business, Incorporation Rocket has compiled a list of the best registered agent services.