• Sage Flowers-Olnowich, Adara Engle, & Jordan Bowman

How to Build a Startup from Scratch

Are you looking for how to build a startup from scratch? This post is all about how to build a startup.

Starting a business can be a long and tedious process. While many people may not realize it, there are many facets that go into starting a business. The entire process can take months or even years to be completed correctly. As a result of this multifaceted operation, we have divided this process into four phases that accurately cover a general basis of what it takes to build a startup from scratch.

This post is all about how to build a startup from scratch.

How to Build a Successful Startup:

Phase 1

The first phase in the process of creating a startup is research. Through the research process, the business concept will be refined, information will be gained, and pivots will be made to adjust to the market, industry, and customer needs. To begin the research process, you will first need to comprise a list of ideas in which you wish to pursue. Once you are set on an idea, you will then need to determine your reasoning for starting the business. Are you trying to solve a problem? Fulfill a need? Make a difference in the world? Once you discover this, you will then need to write a mission statement describing the business goals and actions needed to achieve these goals, as well as a vision statement stating the desired future outcome of the business.

After establishing the startup basics, you will then need to research existing companies within the same industry. This will help you find out if others are already implementing this idea, how they are doing it, and if you can do it better. Researching existing companies will also help you identify potential competitors and determine the minimum requirements to enter the market. After researching existing companies, you will then need to research the macroeconomic environment. This is an important step to take, as it will help you understand if it is a good time to enter the industry you desire.

After some initial research, you will then want to create a business model canvas. In creating this, you will hypothesize your customer segments, value proposition, channels, revenue streams, key partners, key resources, key activities, customer relationships, and cost structure. This canvas will change as you gain more research and information on all of the aforementioned topics.

Finally, you will need to conduct research. In conducting research, you will first want to develop a prototype for your product, or at least have an in-depth pitch prepared. Once this is done, you are ready to get out of the building and start interviewing people. You will want to comprise a list of direct and indirect questions to discover the quality of your current business model canvas. From the information you find through the interviewee’s responses, you will likely pivot your business model canvas and change your strategy multiple times before coming to a set plan of action. This is all part of forming and creating a startup.

Phase 2

Once you have completed the initial research phase, you will then need to become more detailed as you move into the developing and planning phase, starting with your business plan. This document will be your source for planning, operating, and funding your business. A typical plan first includes a vision and mission statement, which describe the company’s beliefs and goals for the future. Second, is an overview of the company type and structure, and after that is a description of the product/service your company offers. The next section of the business plan contains the marketing, management, operating, and financial plans.

The marketing plan offers an analysis of the competition and a competitive advantage strategy, and the management plan determines the leadership roles in the business. The operating plan describes the facilities, materials, and labor that is needed, as well as how the products/services will be manufactured. Finally, the financial plan is one of the most important aspects of the business plan, as it outlines the business’ costs, revenues, and funding plans; this subject is discussed in phase three.

Once the business plan is complete, a good next step is to create a SWOT analysis of both your company, and your competitors. A SWOT analysis is a description of the Strengths, Weaknesses, Opportunities, and Threats that currently exist in your company. The strengths and weaknesses are internal factors, and focus on what your company specifically is doing, while the opportunities and threats are external factors that the company does not have direct control of, but can use to either an advantage or disadvantage. This analysis will help you determine where your business currently stands in your chosen industry, and what steps to take to achieve a strong competitive advantage. Understanding where you stand from your competition will prepare you when creating a startup.

Phase 3

After creating a business plan and SWOT analysis, you will then need to begin funding. In the funding phase, you will determine how your company’s expenses will be paid for as well as the type of investment needed to start the organization. In the beginning, you will need to determine how much of your own capital you plan on investing. Additionally, you may have to consider whether or not you will need to leave your current job and devote your time fully to your start-up. In this case, it is imperative to have a healthy amount of money saved up prior to leaving your job.

There are many options you can take to receive proper funding. One funding source you can go through is a bank. A bank loan is one of the easiest and quickest ways to obtain capital. However, with bank loans comes high-interest rates, making it sometimes pricy to pay off in the end. Another funding source you can go through is the SBA or Small Business Administration. Receiving funds through the SBA is an objectively simple way to borrow money as they work with lenders to provide loans. Another funding option is to borrow money from friends and family. Since friends and family already have a connection to you, this could be an easy and relaxed route to take when receiving funds. However, this option comes with the risk of ruining relationships and family ties if the money is not paid back as promised. A final way to obtain money is through investors. Through this option, money can be acquired quickly and in large amounts. One type of investor is an angel investor. An angel investor is someone who invests their own personal money into the early phases of a business and has confidence in their investment.

Phase 4

Once you have sufficiently funded the start-up of your business, you are ready to launch your company. In launching your company, you must already have a well-developed understanding of your product, business model canvas, and industry as a whole. Once you have gained this knowledge, you then must find a way to implement it. Use the knowledge you gained throughout the previous three phases to create a market for your good or service that will satisfy a need within the market.

Marketing and growth management are also an important part of launching; these two steps are continuous, meaning they must be controlled and updated throughout the entirety of the company’s lifespan in order for the business to thrive. A strong marketing department consisting of advertisers and promoters is crucial, as the products and/or services depend on visibility. Monitoring the growth of the business goes hand-in-hand with marketing, as strategies must be changed to correspond with new products and markets as the business expands.


As you can see, there are many components to creating a startup, but considering each of the phases we described in the article, can help a thriving entrepreneur to start on the right track. Though a tedious process at first glance, with the right research, plentiful resources, and a lot of resilience, creating a startup is just an idea away!

This post was all about how to build a startup from scratch.

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