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With an economy that continues to grow at a promising and blistering rate, coupled with favourable demographical shifts and suitable policies and regulation, India is riding high on the startup wave.


But unfortunately, 90% of the startup enterprises fail within the first five years (1). Therefore, it is also very important that startup business enterprises get off on the right foot. This article will attempt to reiterate the basic fundamentals of establishing a startup business.

Need / Problem Identification

The very idea of creating a product or service emanates from the fact that people have unfulfilled needs or unsolved problems; a gap between what is required and what is available. The first consideration in floating a business idea is to reason or figure out whether there is a need or a problem that needs to be addressed and if the answers lie in creating a specific product or a service.

Core product or service
The second consideration is envisioning or developing the concept of a product or service that could fulfill the identified needs or solve the specific problems. This gives rise to the idea of the core product. An entrepreneur must grab a clear understanding of this core product / service. The core product constitutes the primary benefits or the problems solved by usage or consumption of the product or service.

Some pertinent questions, requiring very specific and comprehensive answers, could be –

– What is the primary purpose of the product?
– What basic needs will be fulfilled by using the product?
– What problems will be solved by using the product?
– How, when and where will the customers use the product?
– What are the requirements for using the product?

USP or Unique Value

Markets are competitive everywhere. If a startup enterprise has to make an impactful and long-lasting mark, it has to create an USP or some unique or premium value to its customers through its offering. Creative advertisements can help garner some attention for a while but it is short-lived. Moreover, promotional campaigns are not always economical. An USP or unique value can be created not just through the product but also through pricing, channels of distribution and elements of retail management like merchandising and shopping experience. A unique brand positioning will be fruitful in the long run only when it is consistently maintained and competitively defended.

Customers and Market Segment

An idea of a product or a service is conceived with an implied understanding and preliminary requirement that there are potential customers. In order to effectively and efficiently market a product, knowledge and understanding of customers and customer behaviour is crucial. The first step in this direction is the identification of the customers through market segmentation. Markets can be segmented on various grounds like geographic, demographic, geo-demographic, behavioral etc. Market segmentation helps businesses distinguish their customers from people in general based on shared features and characteristics. The selection of the right market segmentation strategy can help businesses identify and target the right market segment(s). Other important considerations are the total size of the market for the product or service and size of the targeted market segment.


After the product concept is defined and customer segments have been identified, the next step is figuring out how the product or service will be created and how it will reach the customers – the value chain process. The value chain not only includes processes which add value to the product or its inputs but also include activities and operations through which this value is sustained and maintained. This is the value that has to be delivered through the channels to the customers for their usage or consumption.


Competition in the targeted market segment can be perceived as a deterrent and also as an indication of the presence of favourable business environment. However, it is important to assess the level of existing competition (both direct and indirect) in the targeted market segment. In the last two decades, the nature of competition has undergone significant changes. Products (in any category) are increasingly becoming homogenous. The focus of competition has shifted to services, quality, branding and promotion, technology and channels. The presence of intense competition does not leave much room for quick growth and expansion unless the startup comes with a really strong and hard to imitate USP.

Capital, ROI and Break-even

Not many private and institutional investors are willing to put their money into startup ideas and projects fearing loss of investment. Most of the startup enterprises are self-funded combined with borrowed informal loans from family and friends. Angel investors are rare. Every startup should have an investor presentation (startup business plan) ready all the time.

After capital sourcing, the next important financial consideration is whether the business will generate a healthy ROI to repay the liabilities and create surpluses. How soon a startup can achieve its break-even is something of great relevance to potential investors.

Once a startup has got its basics right at its infancy, it provides the enterprise with the vision, the guiding principles and the roadmap to devise business strategies and carry out business operations. These basics can help a startup realize the reason of its existence and provide a sense of purpose and direction throughout its life cycle. The significance of the forming stages of a startup enterprise often makes entrepreneurs turn to startup business consultants for professional expertise and guidance. Entrepreneurs can gain relevant business insights from the professionals of startup business consulting.

Stay tuned with our blogs, as there is more to come in “Part-II”

 (1) Business Insider

  To know more about “New Creative Ideas” get in touch with our Retail Experts on [email protected]

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Author Bio

Rupal Agarwal

Chief Strategy Officer

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