Which start-ups make the most money?

21st November 2018

Which start-ups make the most money?

Recent trends show that start ups with the greatest chance of success are those whose business models focus on new technologies and specialist interest groups. There are many markets which do not have sufficient services to match the demand of the customers. Any start-up which has a good business idea and markets it in the correct way will have a better chance of success.

However, whatever industry the start-up is in it is essential the business has a sound business idea and business plan.

Where to start up a business?

The great thing about start-up businesses is that they operate from wherever is most convenient, i.e. from a house, garage, nearby office or even a warehouse. It is entirely up to the person who is starting up the business to choose. However, any new start-up will want to consider their location in respect to their market and target audience. If they are too far from potential customers they may lose out to competitors so it is important that location in terms of the product/service they offer is considered.

Which start-ups are profitable?

The start-ups which are most profitable are ones which have a good business idea which has been extensively researched and developed. It is essential any new start-up has a good business plan in place which details how the product or service will be developed, how they will gain access to the capital required and ensuring costs are kept to a minimum in the early years.

What is start up financing?

There are various ways start-ups can raise finance, the options which are available include:

  • Business Loans
  • Invoice financing
  • Small business grants
  • Use own money
  • Angel investors 
  • Venture Capital
  • Crowd Funding

Recent years have seen a large rise in the number of start-ups in the UK so it is very important to ensure there is a good business plan in place to try and increase the chance of securing the amount of finance required.

How start-ups are valued

There is no easy way to value a start-up as there is very little historical data available to make an informed decision about the future prospects of the company. When determining a value for the start-up it would be useful to look at the business model and the potential the product/service has in the market. It could also be worth looking at the sector to see if any businesses which are comparable to the start-up have recently been sold in order to gain a guide to the value. There are various valuation methods which can be used to give a rough idea of what value the start-up could be expected to be worth such as discounted cashflow. Ultimately any start-up will be worth what any investor is prepared to pay for it.

Nick Short | Plus Accounting

Author: Nick Short, Accounts and Audit Senior, Plus Accounting

Any views or opinions represented in this blog are personal, belong solely to the blog owner and do not represent those of Plus Accounting. All content provided on this blog is for informational purposes only. The owner of this blog makes no representations as to the accuracy or completeness of any information on this site or found by following any link on this site

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