Series A for start-ups: what entrepreneurs should know before launching their business
Areas to consider before taking the leap into the world of start-ups
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According to Statistics Canada, approximately 96 thousand new Canadian companies launch every year, making up close to 10 per cent of all Canadian businesses.
While many of these start-ups go on to thrive, others fail for a variety of reasons, including weak market demand, lack of guidance and poor financial planning. Despite having an innovative concept or an exciting business idea, close to 30 per cent of start-ups fail due to insufficient funding and resources.
Canada’s strong economic growth, robust R&D ecosystem, skilled workforce and generous funding programs make the country a great place to launch a new venture. However, before taking the leap, there are some important elements to consider and plan for.
Understand the market
This may seem obvious to some, but many budding entrepreneurs believe so strongly in their idea that they assume others will as well. It is critical to conduct a market study, including a demand assessment and a competitive analysis, prior to launching a start-up. If demand for the product or service turns out to be low, competition ends up being fierce, or barriers to entry are too high, the concept may need to be revisited or a stronger differentiator may need to be implemented.
Study the consumer
What does the company’s target market look like? Who will be buying the product or service? What are their demographics, spending capacity, and desire for the company’s offering? How frequently will they be purchasing, and what is the potential for upselling and cross-selling in the future? Without a proper assessment of buyer profiles and how best to gain their attention, start-up funding can very quickly wither away trying to reach the wrong market.