A startup is a newly formed company created to develop a unique product or service in the market. In other words, it is a company that’s in its initial stages of operations. Innovation is essential for startups because it enables them to compete with other industries and preserve their lead in the market. Generally, they start with high expenses and limited income, but it has a goal to grow and scale, and they are focused on being scale up with extreme uncertainties in the future. Initially, startups are funded by their founders. The other funding sources for startups include family and friends, crowdfunding, angel investors, venture capitalist, IPO, or loans. Without them, there would be no way for these startups to develop and market their innovative products or services effectively. Founders search for a brilliant idea or solving a problem to the potential threat or risk that may create a business opportunity and impact. They implement business plans to predict whether they are feasible from the viewpoint of customers. They also require good execution and custom business apps to keep track and successfully execute their vision for the company.
IS YOUR COMPANY A STARTUP?
- Type of company:- A startup incorporated as a Private Limited Company, Registered Partnership Firm, or Limited Liability Partnership is mandatory.
- Age of the company:- Its period of operation should not exceed ten years from the date of Incorporation.
- Original Entity:- The company should not be formed by splitting up or reconstructing an existing company for being eligible for consideration as a startup.
- Annual turnover:- Company should not have a yearly turnover exceeding 100 crores since its date of incorporation.
- Innovate/scalable:- They should aim at innovating new products/services or have an expandable/scalable business model with high potential.
TYPES OF STARTUPS:
1. Lifestyle startups:
Lifestyle startups are those startups where entrepreneurs are generating income by living the life they love. They are their bosses. That means they are working for themselves by being so passionate about their job. Lifestyle startups are generally freelancing graphic designers, web designers, coders.
2. Small business startups:
Small business startups are small businesses carried out by those entrepreneurs who like to have a long-lasting and sustainable business rather than earn huge profits or scale more. They are running their business to feed their family and are focused on living a comfortable life with family and friends. Travel agents, bakers, plumbers, grocery store owners, carpenters usually commence this startup. Since it is a small business startup, they don’t need a business-facing app, but they need a responsive specialized app that can navigate, order, and track the products/services a customer may want to buy.
3. Scalable startups:
These startups are just born to be significant. From the word itself, we can understand that they are scalable. Generally, these startups continuously scale themselves without a traditional exit strategy. Scalable startups are suitable for those who have the thorough market knowledge and capability to explore more market opportunities efficiently and effectively. They have the potential to keep increasing their revenue while keeping their incremental costs at a minimum. Most of the founders believe that their ideas and mission will change the world. These startups hire the best of the best and bright among the brightest. They used to look for more venture capitalist to magnify their businesses. Examples of scalable startups include Google, Facebook, Uber, Twitter.
4. Buyable startups:
Buyable startups are always associated with software and tech-based, and most of them are in the web and app development industry. The main aim of such startups is not to grow or to build a billion-dollar business but sell to larger companies in exchange for a handsome amount of profit. Entrepreneurs of buyable startups should have startup ideas with enormous growth potential. They are always trying to raise money for their start-ups by opting for crowdfunding and angel funding.
5. Large company startups:
Large company startups are known to innovate continually in the changing environment. It is also called big company startups. They can have a finite life duration only if they continue to innovate because of new competition, changes in customer’s tastes and preferences, technology advancement, and can create a force for more disruptive innovation. So entirely new markets must sell new products/services for their new customers. Google and Android are examples of these startups.
6. Social startups:
Unlike many other startups, social startups are not created to have a sustainable business but positively impact society and do good for our economy. These startups aim to make the world a better place to live in. They are less passionate and ambitious to earn profits when compared to other founders. In short, they provide donations, grants, charities to build a positive social and environmental change in the world.
7. Offshoot startups:
Every startup is not built from the ground up. Offshoot startups are those startups that are separated from bigger companies or large parent companies to establish their own entities. They are actually self-explanatory startups.
Startup India is a scheme undertaken by the Government of India. Indian Prime Minister Narendra Modi launched the project on 16th January 2016. The project planned to generate a robust ecosystem for innovation and entrepreneurship in India, thereby facilitating economic growth and nationwide employment vacancies. The main goal of this initiative is to enable startups to grow through innovation and development and stimulate the spreading of the startup movement. The benefits of Startup India include easier compliance, easier IPR facilitation, speedy exit mechanism, simplification of work, financial support, tax exemptions, networking opportunities, and many more. The startup India has initiated several programs, and Department duly manages them for Industrial Policy and Promotion (DPIIT).
Launching a startup is the beginning stage towards entrepreneurial goals. It seems to be exciting, but it requires a lot of critical thinking and hard work. People make startups because they want to earn their own money and feel independent and confident. This article provides brief ideas about the types of startups out there and how they grow. More information about the best startups in India is discussed in our other blogs. Be sure to check it out!