How to make Startup successful

chances of starting a successful business and how to build successful startup
PatrickWood Profile Pic
PatrickWood,United Kingdom,Researcher
Published Date:16-07-2017
Your Website URL(Optional)
Comment
Startup Success A guide to growing your business kpmg.com i KPMG Startup Success Guide KPMG 2013 Startup Success Guide iDeveloping your pitch Your company’s pitch may define your success in raising capital, building business alliances and gaining market share The traditional multipage, chart-laden business plan that venture capitalists used to rely on to evaluate opportunities is largely being replaced with documents that convey essential information in a more concise format. he executive summary and pitch deck both play important and related roles in helping potential stakeholders understand your business proposition and attracting outside capital . T Executive summary – In most cases, the executive summary will be the first document you submit to potential investors, and will be reviewed to determine whether they are interested in learning more about your startup . This one- or two-page document will provide basic information about your company, team, product or service, and market . Your goal in preparing an executive summary is to describe the product briefly, identify the market opportunity, introduce the founders and management team, provide financial projections, and create enough interest to gain an invitation to an in-person pitch meeting with VC investors . 2 KPMG Startup Success Guide © 2013 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. NDPPS 223071Pitch Meeting Deck – During the initial pitch meeting, you’ll be asked to share a presentation with slides highlighting more detailed information . VCs will be interested in the following information: Company, including the founders and their industry experience Product or service, including features and benefits, and product specifications and technical requirements Management and technical teams, with an emphasis on your engineering talent, relevant experience, and entrepreneurial track record Market opportunity and existing competitors Sales and marketing strategy, including pricing and distribution Development milestones Financial information, including projected sales and profits, capital requirements, and exit strategy Other capital already in the company Perceived valuation Other advisors or consultants supporting your company In addition to the potential financial returns, VCs will be interested in evaluating your team’ s ability to execute while creating and sustaining a viable product . While they may appear skeptical as they evaluate the opportunity, VCs will play a critical support role in your company if they decide to invest . VCs offer valuable advice and experience to help you avoid common pitfalls and optimize your company’ s approach to the marketplace, and often provide access to business partners or markets more readily than a startup might be able to achieve on its own . KPMG Startup Success Guide 3 © 2013 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. NDPPS 223071Choosing a legal structure An appropriate legal structure provides an important foundation for your startup. Choosing the most appropriate legal structure is an important decision that establishes a foundation to support the company’s growth and operational effectiveness as it matures. n addition to limiting potential liability and helping you develop appropriate tax strategies, the right legal structure can help your company safeguard its intellectual property, attract outside investors, and reduce Ipotential disputes as your venture moves through later stages of its life cycle . There are different types of legal structures, each offering distinct advantages and potential drawbacks to growth-stage companies . evaluating your options carefully is important because it’s easier and more cost- effective to make the correct choice early, instead of revising your legal structure later . Given the potential challenges of making the best choice, and the importance your legal structure can play in your company’s success, it’s important to obtain appropriate legal, financial and tax advice about your options . 4 4 2 K0 P1 M 3 T G S ecth an rto ulo p S gy I uc nc d e u ss s G try O uid ue tlook Survey © 2013 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. NDPPS 223071Company Structures – one of the first decisions startups have to make is the appropriate corporate structure . Creating your company as an independent entity can help founders shield their personal assets from potential liability claims, protect intellectual property, and provide tax benefits . To form a company, consider the following steps: Decide whether a limited liability company (LLC) or corporation is best suited for your company. Angel investors and VCs generally prefer to invest in corporations, but there may be advantages to forming an LLC in some circumstances Review tax considerations with a professional advisor. In broad terms, corporate taxes are due at the entity and shareholder levels, while an LLC may choose to pass taxes through to its owners Conduct trademark and registration searches to be sure your desired company name is not being used by an organization offering similar products or services Enlist an attorney to help with the incorporation requirements and related documentation that will need to be filed with the state in which you incorporate (which may not necessarily be the location where your company is based) Work with your advisors to determine whether, and how, equity will be offered to employees Consider your growth plans and exit strategy, and discuss with your advisers whether those factors can affect your initial legal structure decisions. It is also critical that you and your cofounders develop an operating agreement to outline issues such as equity arrangements, IP ownership, employment terms, and other items that, without an agreement, may be subject to litigation later on . By considering these issues at the earliest stages of your company’ s life cycle and developing an appropriate legal structure, you can help set the stage for your venture’s future market growth and success and pave the way to an attractive exit strategy that helps you maximize your company’s value . KPMG Startup Success Guide 5 © 2013 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. NDPPS 223071Building your brand Your brand is one of your company’s most valuable assets. It connects your company to the hearts and minds of your customers, investors and the marketplace and begins building on day one. Branding is much broader than logos and tactical activities. Your logo, tagline and website are all expressions of your brand. Your actual “brand” is the emotional response and mental associations people make with your company as result of the multitude of interactions with your brand expressions, products, employees and services. It is your company’s persona, identity and purpose in the world. Building a strong brand uilding a brand is all about shaping public perceptions . To do this effectively requires careful planning and execution At the core of this are some simple best practices . . Here are a few to help you get started: B Define a higher purpose and mission statement – At the core of every strong brand is a higher purpose that explains why the company exists beyond profits . A purpose is a motivating, 1 timeless statement that outlives your tagline and growth cycles It inspires and unites your . employees for a shared cause and serves as a foundation for your mission statement and other external brand messages . Think of your purpose as an internal declaration of why you exist and your mission statement as an external communication of what you do and for whom . Here are a couple examples: • Google’s defined mission is to “organize the world’s information and make it universally accessible and useful .” The derived purpose behind their mission is to “share information” . • McDonald’s defined mission is to be the “world’s best quick service restaurant experience Being . the best means providing outstanding quality, service, cleanliness, and value, so that we make every customer in every restaurant smile” The derived purpose behind their mission is to “make . people smile .” Remember your brand starts internally with your culture, values and mindset long before it hits the market This all begins with the development of a purpose and mission statement . . Differentiate your brand – As you define your purpose and mission statement consider how your startup is unique in solving a problem for your target market Make sure your customer promise is . 2 differentiated from the competition . A strong purpose and mission statement articulates what’s unique and special about your company and the value it provides to the world . Keep in mind, differentiation without relevance adds no value to your brand The uniqueness of your offering is only powerful if your target . market agrees Marrying differentiation with relevance is a recipe for success . . 6 KPMG Startup Success Guide © 2013 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. NDPPS 223071Pick a brand name – Good products, great customer experience and strong brand messaging will be most impactful to your startup’s success, but a brand name should not be overlooked Consider . 3 choosing a short name that is memorable and invokes positive thoughts . Your name should be easy to pronounce and read T . o ensure consistency, create your brand name in conjunction with your mission statement and product offerings . It is also wise to search trademark databases to ensure your preferred name is available . KPMG Startup Success Guide 7 © 2013 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. NDPPS 223071Building your brand continued Build a visual identity – Your visual brand identity is built through the consistent use of visual expressions . 4 Here is a list of common visual expressions that you can expect to use to develop your brand identity: Logos Taglines Stationery/Letterheads Product Packaging Advertisements Websites and Digital/Mobile Pages Brochures and Sales Materials Business Cards Presentation Templates As you build your visual identity, ensure the overall look and feel and design attributes fit your brand personality . Take Whole Foods as an example . Their logo is green, and incorporates the image of fresh produce This is very . much in line with their brand promise to provide natural, organic food T . o help ensure consistent use of your visual brand elements, consider creating a simple style guide . This document defines what your visual identity looks like (ie . ., logos, color schemes, fonts and taglines) and provides guidelines for how to properly use these visual elements . Brand is experiential – Branding is more than logos and taglines . every interaction, both passive (i .e ., customer reading a website) and active (ie . , customer interacts with a sales person), shapes the . 5 overall brand perception . It is crucial all points of interaction with the customer represent your brand . Take the cosmetics company Lush as an example They “believe in making effective products from fresh . organic fruit and vegetables .” When you walk in their stores, their products are shown in raw unpackaged form . Handwritten signs sit next to each product listing the all-natural ingredients . employees give hands-on demos to interested consumers All interactions with Lush embody their brand promise . . 8 KPMG Startup Success Guide © 2013 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. NDPPS 223071Always be consistent – the most damaging thing you can do to your brand is to be unpredictable . Consumers build a brand perception based on what they’ve come to expect from your company . 6 Be genuine and consistent in everything your company does Whether the consumer is surfing your . company’s website, driving by a billboard ad, reading an e-mail from a service rep or using your products, the brand experience and visual identity should be consistently invoked and easily recognizable . A good product coupled with a well-executed brand will position your company for long-term success securing a special place in the minds of your consumers The most successful startups craft a brand strategy early on . . KPMG Startup Success Guide 9 © 2013 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. NDPPS 223071Leveraging the ecosystem Tapping into a strong ecosystem that includes venture capitalists, experienced entrepreneurs, talent, and business advisors, is key for startup success. Silicon Valley continues to be the epicenter for tremendous innovation including startups and global tech enterprises. Having the largest venture capital market in the world doesn’t hurt either, in addition to the optimistic pioneer spirit that has made Silicon Valley the top R&D center in the world offering a unique ecosystem to startups. ther cities in the United States and around the world are aiming to replicate Silicon Valley’s successful ecosystem New Y . ork is getting a bigger footprint in digital media, with the local government developing o a plan to proactively attract and nurture the tech startup community . The importance of the ecosystem can be seen in other cities as startup hubs emerge in cities ranging from Seattle to Cambridge and Portland to Austin, each with its own ecosystem offering support networks to assist entrepreneurs . 10 10 K KP PM MG S G 20 ta 1r3 S tup S taru tu cp S cesu s G cce us id s G e uide © 2013 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. NDPPS 223071Enlisting Help The primary advantage of aligning your venture within the startup ecosystem is your improved access to experience and resources that can help you bring your venture to market quickly and successfully . As you develop your company’s support network, keep the following in mind: Investors – In addition to capital, experienced VCs and angels can introduce you to resources within their portfolio companies or specific industry sectors. Incubators and accelerators – At the early startup stage, incubators/accelerators can provide short- term access to facilities and resources where company founders can network with other startup teams, share ideas, and learn from each other’s experiences. Mentors – Experienced entrepreneurs, or people with critical technical or industry experience, can provide informal guidance about your company, technology, markets, or other important success factors. Effective mentors can draw upon their experience and relationships to introduce you to key contacts and provide valuable feedback. As your startup gains momentum, mentors and investors can provide a starting point for recruiting advisory board members or directors. Advisors – Startups maximize their chances of success when they concentrate on what they do – best and refrain from trying to solve business challenges they do not have the skill-set to manage. Attorneys, accountants, and other professionals have the experience and knowledge to help founders manage these challenges and build a successful business. Advisors can also introduce company founders to their own ecosystems of mentors, investors, talent and other advisors. Talent – While engineering talent will likely be critical, startups often need to supplement their founders’ skills in financial, legal, marketing or other specialized functions. Economic development agencies – Many states and cities trying to foster technology companies and jobs offer financial and logistical support to growth-stage companies. Colleges and universities – Educational institutions can provide a rich source of knowledge, with many programs connecting entrepreneurs with key resources including labs, researchers, alumni and startup ventures. Enterprises – A number of large companies and industry groups have developed initiatives to promote industry innovation and identify promising technologies. Many companies have programs to help founders with a numbers of resources including technology, mentors and capital. KPMG 2013 Startup Success Guide 11 © 2013 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. NDPPS 223071Raising capital Startups need access to capital to optimize their potential opportunities. Raising capital is typically one of the first issues a startup company will need to address, and your ability to attract investors will likely play an important role in the ultimate success of your company and its exit strategy. aising capital will typically take place in several stages (known as rounds), each of which will likely carry different terms, conditions and milestones . equity is the most common approach to early-stage investment, Rsince most startups will not have enough revenue or history to attract debt financing . Using equity to raise capital will also have important benefits in attracting and retaining talent, since many team members will be motivated by your company’s growth potential and the possibility of equity appreciation . Bootstrapping The first round, often called bootstrapping, will typically come from founders’ savings and credit cards . In addition, many founders will reach out to their friends and family members to raise their initial seed capital . Potential investors will expect founders to have “skin in the game,” and to have made a financial commitment in the growth of their startup . Investors will be less likely to invest if founders have not also taken personal and financial risks to get the startup off the ground . Angel investors Angel investors are individuals or groups that specialize in making early-stage investments in startup ventures In the United States, the Angel Capital Association has accredited nearly 200 investor groups . and more than 8,000 individual investors . Angel investors often learn about potential investments through referrals from other investors, a startup’s advisors, or through trade groups or networks . Strategic investors Strategic or corporate-backed investment funds are a growing force in the venture capital community, with most FoRTUNe 500 companies having an internal venture investment unit Strategic investors . partner with startups to get a front-row seat to cutting-edge technology in their market segment or complementary industries . From a startup’s perspective, there are a variety of advantages to working with strategic investors, including industry guidance, market credibility, and access to their customers . In addition, a strategic investor is likely to provide an attractive acquisition partner as the startup gains product and marketplace momentum . 12 KPMG Startup Success Guide © 2013 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. NDPPS 223071Government investment funds and grants A growing number of states have launched angel or venture capital funds to attract businesses and promote economic development . Startups with a strong scientific or technical focus may qualify for federal, state and local grants designed to foster the development of new technologies and tech-related employment . Bank financing For some startups, taking on debt may be a more attractive option than diluting the ownership stake of the founders or other investors through equity offerings While traditional banks may not be a viable option for . most early-stage companies, there are several players in the venture lending space who are willing to take more risk (for a higher return) and lend to startups . K KP PM MG S G St ta ar rt tu up S p Su uc cc ce es ss G s Gu uiid de e 13 13 © 2013 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. NDPPS 223071Tax matters Tax compliance is a necessity. An effective tax planning strategy can add considerable value to your business. Taxation is a critical factor in the success and financial health of your business, and obtaining tax advice at the earliest stages of your startup’s development is advisable to prevent early mistakes that can have a lingering detrimental impact. Companies should pay attention to tax-related issues in the following areas: Registration New businesses must, in general, apply for a US . Federal ID number . Registration can be effected by applying online with the Internal Revenue Service (IRS) Registration for the following taxes should be considered: Federal income taxes Sales tax (on a state-by-state basis) State income taxes Property tax Employment taxes Depending on the nature of the business, other taxes may also apply . It may also be necessary to register with state regulators to gain the appropriate license or permit to undertake business in that jurisdiction . 14 14 K KP PM MG S G St ta ar rt tu up S p Su uc cc ce es ss G s Gu uiid de e © 2 © 20 01 13 K 3 KP PM MG L G LL LP P, a D , a De ella aw wa ar re l e liim miit te ed l d liia ab biilliit ty p y pa ar rt tn ne er rs sh hiip a p an nd t d th he U e U. .S S. m . me em mb be er f r fiir rm o m of t f th he K e KP PM MG n G ne et tw wo or rk o k of i f in nd de ep pe en nd de en nt t m me em mb be er f r fiir rm ms a s af ff fiilliia at te ed w d wiit th K h KP PM MG I G In nt te er rn na at tiio on na al C l Co oo op pe er ra at tiiv ve ( e (“ “K KP PM MG I G In nt te er rn na at tiio on na all” ”) ), a S , a Sw wiis ss e s en nt tiit ty y. N . ND DP PP PS 2 S 22 23 30 07 71 1Early-stage considerations Seek early advice on the various taxes your company may be liable for Determine how you wish to set up the entity (for example, as a corporation or a pass-through entity) Consider the taxation consequences, including VAT, of setting up operations or selling products overseas Consider the taxation consequences, including U.S. sales and income taxes, of the company’s place of business and where personnel are located Determine if your personnel are employees or independent contractors Consider the tax consequences of non cash remuneration (such as share-based compensation) Identify possible tax credits and incentives your company may qualify for Obtain external tax advice before any acquisition or disposal Compliance Ensure someone is responsible for tax compliance. This is an area where an external accountant or CPA may be of particular assistance. Tax returns and payments of different tax types are due at various times of the year. Ensure you understand the required tax filings and the associated payment calendar Incorporate tax charges and payments into your budgets and financial projections KPMG Startup Success Guide 15 © 2013 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. NDPPS 223071Doing business globally International operations and customers can create revenue growth and increase operating efficiency In an increasingly global economy, startups are evaluating the potential advantages of international operations in their earliest stages. Questions about approaching high-growth international markets are likely to emerge during discussions with potential investors. s mobile and cloud technologies bring greater numbers of connected consumers to the global marketplace, acquiring and serving international customers is far easier today than it would have been only a few years ago . A In addition, adding international operations can dramatically improve your company’s access to technical and engineering talent Adding team members based in international markets can provide access to a broad selection . of resources, as well as potential cost savings versus operating exclusively within the United States . 16 16 K KP PM MG S G St ta ar rt tu up S p Su uc cc ce es ss G s Gu uiid de e © 2013 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. NDPPS 223071Along with considerable rewards, foreign trade can introduce challenges including tax implications, foreign exchange risks, and other issues While most can be resolved with careful planning, specialized advice is often . recommended when your venture approaches an international market, or considers collaborating with a business partner located outside the United States . Matters to be considered include: • Corporate structure – This can help you optimize tax costs, both in the international market and on remittances . • Transfer pricing – Specific tax rules govern the price at which goods and services are transferred within a group structure . • Double taxation agreements – These agreements, where they exist, avoid tax being charged locally and at home on the same profits They are not in place with all countries . . • Impact on staff – Is it necessary for team members to be based outside the United States? What is the cost? What is the local recruitment market like? • Regulation – How well do you understand local laws and regulations? Have you evaluated their potential effects on your business and related compliance costs? • Currency – Where relevant, can you mitigate against foreign exchange risk? • Language, culture and business practices – The potential effects of differences should not be underestimated • Capital – If required, is it available locally? In choosing a location, the above factors should be addressed, along with the following important considerations: • What markets does a location give you access to? • Does an international market help you raise new capital? • Are tax incentives available to companies establishing a presence in a given market? • Do international companies have a history of success in the location? • What are the costs or tax implications of leaving a location? Remember to use your network of investors and professional advisors to provide information on potential new markets . They can also use their contacts to open doors and make the process easier for you . Although the potential challenges and implications need to be evaluated, international expansion can provide tremendous opportunities for growth-stage companies to reduce operating costs and expand their markets dramatically . KPMG Startup Success Guide 17 © 2013 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. NDPPS 223071Maintaining accounts, implementing controls and assessing audit requirements Proper accounts are required to meet filing requirements and to maintain control over your financial resources. The importance of maintaining accurate accounts should never be underestimated. Current and accurate financial information is critical for tax reporting purposes, raising capital from outside investors, and updating investors about your company’s progress. n addition, your accounts will provide critical insights into your company’s financial and operational performance that will likely influence your strategic decisions Financial data can also help you identify spending patterns and . Iimprove the efficiency of your capital employment . Other advantages properly maintained accounts would provide include: Saving you considerable time and expense in preparing external financial statements Helping you develop accounting policies and processes to support a better control environment Adding value by facilitating financial due diligence for investment or exit purposes 18 KPMG Startup Success Guide © 2013 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. NDPPS 223071Maintaining accounts, implementing controls and assessing The early stages Your financial reporting needs and requirements will vary according to your company’s growth stage . In the early stages focus on: Keep it simple. There may be no need for a full scale ERP system immediately after founding Seek advice on revenue recognition, as it is commonly not appropriate for emerging technology companies to recognize all revenue when invoiced Completeness and accuracy of underlying records for all business transactions, including equity transactions, are the priorities Focus on cash forecasting to keep investors informed about liquidity Understand and fulfill your tax compliance requirements, including sales taxes and VAT Outsourced providers can assist with employment matters and payroll taxes Upgrade accounting personnel and systems when the core business gains momentum and before a major liquidity event Controls Money will probably be a scarce resource, so controls over cash flows are critical . They will also instill confidence in your investors . Focus on: Monitoring and management review controls can be effective for smaller enterprises if controls are executed with the appropriate rigor and precision to identify exceptions Monthly bank reconciliations to ensure completeness and accuracy of cash balances Protect systems and intellectual property from unauthorized access and use Develop a budget to guide operations in the achievement of milestone goals from available capital resources. Regularly compare actual results to budget. Review expenditures before purchase commitments to minimize waste and ensure alignment with strategic priorities Establish standard terms and conditions for sales arrangements, with exceptions subject to appropriate review and approval Implement procedures to comply with applicable equity issuance requirements, including board approval of stock option grants with proper support for fair-value-based assumptions Understand obligations and restrictions embedded in financing arrangements KPMG Startup Success Guide 19 © 2013 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. NDPPS 223071Maintaining accounts, implementing controls and assessing audit requirements continued Audit and filing requirements Generally, private companies are not required to prepare audited financial statements by the US . . or state governments However . , some private companies are contractually required by investors, bankers, or board members to perform an audit of their financial statements for a number of reasons, including: Early-stage considerations Debt covenants Preferred stock investor agreements Good corporate governance practice For other private companies, there is flexibility in the timing of completion of annual audits . entrepreneurs and board members exercise judgment in deciding when to complete an external audit based on the following considerations: Early-stage considerations Number of years since inception Complexity of historical transactions Availability of resources to successfully support an external audit Anticipated timing of IPO and M&A events Proposed teams and costs by external auditors While there are benefits to delaying an external audit in the early stage, it can be very difficult to complete audits of past periods when the company begins to experience high growth . 20 KPMG Startup Success Guide © 2013 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. NDPPS 223071

Advise: Why You Wasting Money in Costly SEO Tools, Use World's Best Free SEO Tool Ubersuggest.