Are You Thinking About Starting a Business in 2023? Now Could Be the Ideal Time!
Startups have seen an upsurge in alternative funding options, making it easier to secure capital. This trend is expected to continue into 2023, offering entrepreneurs more chances to bring their ideas to fruition.
1. Alternative Financing Options
Startups can utilize various alternative financing mechanisms – crowdfunding, microlending and angel investing are among them – to launch their business successfully.
These alternative funding sources typically feature lower interest rates than traditional loans and are tailored specifically to small businesses and entrepreneurs. You may use this type of funding to test the market or validate a product or service offering.
Selling stakes of your company to private individuals or venture capital firms for funds and insight may dilute ownership percentage, yet help raise large sums of capital. Before accepting money from angel or venture capitalist investors, be sure to carefully read over their terms and conditions, which could prevent conflicts of interest or hard feelings later. Alternatively, rewards-based fundraising provides backers with rewards instead of shares as compensation for backing you.
2. New Market Research Tools
Market research is an integral element of building successful businesses, helping entrepreneurs to identify and target potential customers. Market research can assist startups in understanding what people want from products or services they are selling as well as providing insight that will allow them to build strong businesses from the start.
This year has seen many new tools made available to startups to assist them with this process, providing user-friendly graphical representations of data that are easily understood by both entrepreneurs and their stakeholders. Such tools may include survey tools, audience management software or analytics software.
Qualtrics provides users with an opportunity to easily share questionnaires across platforms to increase response rates and the chance of meaningful results. Furthermore, its features for analyzing and visualizing data allow entrepreneurs to easily share findings with stakeholders while making more informed decisions based on collected information – leading to more successful startup launches by 2023.
3. Social Media
While many businesses struggle to gain visibility early on, startups often gain attention more rapidly through social media. 55% of consumers discover new products or services through these channels.
Startups that use social media effectively can build a large following and convert casual followers to loyal customers. Furthermore, social media can serve as an invaluable platform for market research; helping startups learn about customer needs, preferences and opinions that could inform product development or marketing strategies going forward.
2023 has already seen numerous promising startups make significant strides forward, such as 8base’s low-code platform that replaces backend programming for some web apps with easy programming language; Magical’s productivity software which helps people organize both work and personal lives more efficiently; and MasterControl, which creates life science software used by companies to manage the design and development of medical devices and pharmaceuticals has seen impressive growth since launching last year.
4. Increased Access to Capital
Companies with strong traction and viable business models will still find opportunities to raise capital in 2023; however, investors have raised the bar significantly: no longer does fast growth alone qualify a startup to receive venture capital investments; investors require evidence of product market fit, clear competitive advantages and the capacity for profitable expansion in an uncertain economic climate.
Examples include e-commerce and direct-to-consumer brands with unique shopping experiences, sustainable supply chains and personalized product offerings receiving increased funding. Venture debt loans have also become more prevalent for early stage startups. By giving founders the freedom to focus solely on execution rather than equity sharing arrangements over three-year loans, these early stage startups allow founders to focus more effectively on long-term success of the company they have founded.
Startups are increasingly turning to government initiatives as a source of capital. One such program, Bank of America Breakthrough Lab, caters specifically to Black, Hispanic-Latino and Native American entrepreneurs seeking to launch impactful tech businesses; its program provides tailored mentorship services, digital expertise training and networking with investors; applications are due by June 8 for its September cohort.