Startup companies are business enterprises that are in the initial stages of establishment and operation. The bankrolling of these companies is conducted by their founders in the attempt to capitalize on an identified commodity that is on demand in the market. The sustainability of these companies is dependent on additional funding as a result of high costs and the limitation in revenue. Therefore, startup companies are driven by the demand in the market. There are several considerations that have to be met after deciding to invest time and resources in a startup company. These include factors such as legal structure, research on the market, the source of funding, future relevance and several risks that must be navigated to achieve success.
Keywords: Startup Companies, Demand, Market, Sustainability, Resources
Assignment Question 1
Introduction
A startup company can be described as a business enterprise in its initial stages of operations (Salamzadeh " Kesim, 2015 pp 20). There are several characteristics that define a typical startup company and the skills necessary to ensure its sustainability in the current competitive market. The greatest challenge in the establishment of a startup company is the funding. It may be easier to develop an idea that can result in business opportunities as a result of the existing market demand. However, implementation of the idea is what determines the birth of the business (Kerr et al, 2017). Financing the idea is the common stumbling block for many entrepreneurs. Other common challenges include successfully navigating the existing legal structure required before the establishment of the thought company, reaching the targeted customers, finding the right people to make a team and sustaining the company in the wake of various major changes in the market.
Purpose of the Study
The purpose of this report is to outline the skills and the characteristics necessary for the establishment of a startup business. It seeks to highlight the steps required during the implementation of a business idea and the skills and the attributes of the entrepreneur. The report also illustrates the effect of the recent advancement in technology on the development and sustainability of startup companies. The heavy presence of people on social media and other online platforms have changed the market in a significant way forcing people to come up with business ideas that are largely aligned with the use of the internet to reach their targeted consumers. This report will also examine the “must dos and don’ts” for an entrepreneur in establishing a successful business that will storm the market and maintain sustainability even on the wake of drastic changes in the market.
Research Methodology
This report was compiled from examining the various literature on skills and qualities necessary for the success of startup businesses. A review of data from the Bureau of Labor Statistics was also conducted to gain information on the number of newly established business, their contribution to job creation in the economy and their survival rates over the years.
Findings
Entrepreneurship is a major player in the growth of any economy around the world. In the United States, the Bureau of Labor Statistics (BLS) has the mandate of collecting data on newly established business and the trend in job creation in the country. The below table from the BLS illustrate the contributed businesses and employment opportunities by startup businesses and small businesses to the country’s economy. The Business Employment Dynamics (BED) branch in the BLS provides the tracking of cohorts of newly established business in the same year through the series of age data. The startup businesses that are less than a year old rises and falls within the range of years provided (1994-2015) as a result of the business cycle in the economy (Bls.gov, 2016).
Figure 1: Number of Established Businesses in Less than 1-Year-Old
Figure 2 below reveals that the employment opportunities created by startup businesses that are less than a year old went down from about 4 million in 1994 to about 3 million in 2015. Combining the trend with that of newly established business shows that the number of jobs created by startup companies is reducing (Bls.gov, 2016). This is happening despite the growing emergence of online businesses which is taking place within various internet platforms.
Figure 2: Jobs Created by Startup Business Less than 1-Year-Old
Some of the startup business will eventually fail in various industries as shown in figure 3. The chart indicates the survival rates of businesses in the health sector and construction industry. While the survival rates are decreasing from the year 2004 towards 2015 in both sectors, construction industry shows the lowest survival rates over time (Bls.gov, 2016).
Figure 3: Survival rates of selected industries
An article in the Forbes magazine on “The Top Skills Every Entrepreneur Needs” illustrate the key skills that every entrepreneur need in starting up a business and sustaining it during various cycles of the economy. Among the highlighted skill include resilience which is the ability to withstand the ‘highs’ and ‘downs’ of any business as it will not always work out as initially planned. Another major skill examined is the maintaining of focus on every step towards the targeted goals. Additionally, long-term investment is a crucial aspect as success does not come overnight and therefore requires patience. Learning from mistakes made and the ability to acquire and manage the right employees also plays a vital role in the success of every newly established business (Forbes.com, 2013).
Recommendations
The success of a startup business demands the entrepreneur to first thoroughly research the market before initializing the process of putting an idea into action. Not all ideas are worth investing resources and time as some will eventually fail if they do not align with the requirements of the market. To avoid failure, resilience, focus and relentless investment in the startup business is a component that cannot be overlooked. The entrepreneur must also enlist the help of professional advisors, follow all the steps of the business plan and embrace the latest marketing techniques and technology advancements. The ability to choose and manage employees is another key aspect of successful startup companies.
Conclusions
Startup businesses are those that are newly established in the economy as a result of implementing an idea synthesized from identification of demand of a certain product. The establishment of startup companies is critical to the economy of every country since they are a major contributor to jobs and ultimately economic growth. This study reveals that it is inevitable that some of these businesses will eventually fail due to various factors in the market. The success or failure of these businesses is mostly dependent on how the entrepreneur understands the market structure and their skills in navigating the challenges presented by factors in the economy.
Assignment Question 3
Report Evaluation
The ‘Business Startup Companies’ report outlines the skills and qualities that an entrepreneur requires to have to successfully run a newly established business. It examines works of other authors who have conducted in-depth research on startup businesses. The data from the Bureau of Labor Statistics (BLS) clearly reveals how new businesses that are less than a year old have contributed to the growth of the economy through the creation of jobs, especially for the X and Y generation. The data also shows the trend and the effect of changes in lifecycles of the economy that causes a fall or rise in the number of businesses set up in a year. Anyone examining the report can be able to interpret its content due to its compilation and presentation in a formal business report format. It also uses common business terms and simple language that doesn’t present any difficult even to a person with little knowledge of the business.
The report also has its weaknesses that can be improved to ensure effective presentation. The methodology used to gather information on startup companies need to be improved to achieve detailed data. This can be done by applying methods that provide primary data such as interviews, use of questionnaires, and observation technique among others. Secondary research such as literature review also needs to be expanded to cover more studies done by other authors thereby widening the scope of information sources which will allow comparison of different opinions. The report is also short hence providing a limited coverage on the topic of research. More subtopics and graphical representations can also be added to the report to improve clarity to all types of the readers.
Evaluation of the Presentation
A good presentation is defined by its effectiveness in relation to content and presentation skills used. The presentation I have prepared covers the basics for startup business which potential investors require to know prior to setting up a business enterprise. Slides are simple and bullet points and texts are straight to the point. The transitions and animation used are also appropriate as they allow the slides to wipe left-to-right at a suitable speed. The font used is appropriate and can be read by even those at the back of the room. Also, the presentation has been prepared not to last more than 5 minutes because listeners can get bored very quickly if it is too tedious.
The current slides prepared are quality and appropriate for presenting information to potential investors for a business start-up enterprise. However, there are few things that can be done in order to improve the presentation. First, charts and graphs can be incorporated in order to provide a clear view of business startup trends over years. Also, a high-quality graphics such as appropriate photographs can be used to make the slides more informative and attractive. By so doing, the presentation will deliver much information to the potential investors, therefore, allowing achieving the intended purpose.
References
Bls.gov. (2016). Entrepreneurship and the U.S. Economy. [Online] Available at: https://www.bls.gov/bdm/entrepreneurship/entrepreneurship.htm
[Accessed 24 Jun. 2018].
Forbes.com. (2013). [Online] Available at: https://www.forbes.com/sites/aileron/2013/11/26/the-top-skills-every-entrepreneur-needs/#3f87d5d776e3
[Accessed 24 Jun. 2018].
Kerr, S.P., Kerr, W.R. and Xu, T., 2017. Personality Traits of Entrepreneurs: A Review of Recent Literature (No. w24097). National Bureau of Economic Research.
Salamzadeh, A. and Kawamorita Kesim, H., 2015. Startup Companies: Life Cycle and Challenges.
