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3 Strategies to Convince People That Your Startup Is Legit

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The approach of three new Chinese EV automakers demonstrates the value of legitimacy for venture building; these firms were able to reach volume production just two to four years after they were founded, compared to Tesla, who took 9 years. They raised nearly $7 billion in venture funding and all three were recently listed in the U.S. How did they do it? By implementing three actionable strategies to manage legitimacy to access the resources they need: leveraging existing sources of legitimacy, aligning actions with resource holders’ expectations, and redefining perceptions or assumptions held by resource holders.

To start and grow their firms, entrepreneurs need a lot of things from other people. They need funding from investors, skills and commitment from a founding team, approvals from regulators, collaboration from suppliers, and attention and demand from customers, among other things. But to unlock these, entrepreneurs must establish their legitimacy in the eyes of each of those resource-holders, or “audiences.” They have to show that they’re trustworthy, that they have a good product, and that they can take it to market. This effort is particularly challenging because each of these different audiences has its own criteria for what makes a venture legitimate.

In our research on legitimacy strategies, we looked at China’s high-growth and intensely competitive electric vehicle (EV) market (which also happens to be the world’s largest), where, a new group of entrants is challenging incumbent automakers, including Tesla. Three outsiders in particular — NIO, XPeng, and Li Auto — seem poised to emerge as local champions. All three were typical startups faced with significant liabilities of newness and lacking key resources. But these three firms were able to reach volume production just two to four years after they were founded, compared to Tesla, who took nine years. They raised nearly $7 billion in venture funding and all three were recently listed in the U.S. And while all three had connections to the auto industry, EV design and manufacturing was an entirely new venture for them.

How did they accomplish this? We found that successful entrepreneurs — new entrants in particular — implement three strategies to build legitimacy and access the resources they need: leverage existing sources of legitimacy, align actions with resource holders’ expectations, and define (or redefine) perceptions or assumptions held by resource holders.

Here’s how these strategies work.

Leveraging existing sources of legitimacy.

The first step taken by the founders of all three firms was to leverage their personal resources as a source of legitimacy to attract critical resources, including a core founding team and sufficient startup funding. Founder William Li of NIO leveraged the personal networks he had formed while building BitAuto, an internet portal for auto news, listings, transactions, and social communities for car buyers and drivers. Xiang Li, of Li Auto, leveraged relationships formed while building AutoHome, a similar site. Li also brought AutoHome’s existing top management team on board, further increasing investors’ confidence in the new firm. While the founders of NIO and Li Auto brought money and people to the table to build legitimacy, the original founders of XPeng brought experience; both had worked as lead researchers in EV control systems and autonomous driving in the state-owned manufacturer Guangzhou Auto Corporation (GAC). They leveraged that to attract Xiaopeng He, initially as an angel investor and then as co-founder and CEO. He leveraged his leadership experience, cash, and professional connections to Alibaba, which had acquired his previous internet browser company, to build the new company’s resources and access.

Aligning with requirements, norms and expectations.

In some cases, to project legitimacy and gain access to critical resources entrepreneurs must align their actions with the “rules of the game,” including formal regulations and informal but strong norms. For example, even if the leadership team has impressive credentials, investors typically expect them to have substantial “skin in the game.” The leaders of these three ventures aligned themselves with this expectation, each of them personally investing over $100 million in their ventures. Each firm also needed a license to manufacture automobiles. To meet that regulatory requirement and enter the market sooner, NIO and XPeng initially outsourced production to an existing auto manufacturer, while Li Auto acquired a manufacturer with the necessary license.

Redefining perceptions and assumptions.

Finally, all three founders have created a new paradigm for what an EV can be, and which differentiates them from other competitors, including Tesla. They have gone beyond Tesla’s vision of a “smart” EV — based on the operating systems, over-the-air software updates and driver assistance functions — to include platform-based connectivity among customers and online service providers. While Tesla’s smartphone app is integrated with the car’s navigation and functions, those of NIO, XPeng, and Li Auto are also a platform for their users to form friendships and share reviews, photos, experiences and news of upcoming events. NIO, for example, has over 200 thousand daily active users, and 50% of new customers are referred by existing customers. These online relationships are supported by each firm’s network of offline direct-sales and experience stores that are very different from typical 4S dealerships.

Entrepreneurs often ignore the importance of managing the perception of legitimacy when they build a new firm, enter a new industry, or launch a new product. Without legitimacy, entrepreneurs have to enter meetings with cold, unfriendly investors for funding or regulators for approvals, waste many dollars and efforts to acquire users, and struggle with opportunistic co-founders or mediocre suppliers. Such efforts are unlikely to be effective nor efficient. Entrepreneurs without legitimacy with key audiences may keep bootstrapping for years, and only a small number of lucky ones will be able to finally take off.

The approach of these three new Chinese EV makers demonstrates not only the value of legitimacy for venture building, but also all three effective legitimacy-gaining strategies: leveraging existing sources of legitimacy, aligning actions with expectations and requirements, and redefining perceptions of what is “normal” and legitimate. These examples show that entrepreneurs should see legitimacy-building as a key part of the venture-building process, essential to increasing the effectiveness of their resource-seeking and growth acceleration.

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Everything You Need for Starting a Pressure Washing Business

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If you have an entrepreneurial spirit and feel ready to go into business yourself, the pressure washing business could be the best option for you.

Starting a power washing business doesn’t require lengthy learning and the startup costs are relatively low. Since the demand for such services is always high, this business can provide a solid flow of income if mastered and managed properly.

Like any other business, a successful power washing business requires proper preparation and planning and this article offers a step-by-step guide for embarking on such an entrepreneurial journey.

Research the Market

Doing some in-depth research about the pressure washing market, what customers you want to target, and how many similar businesses are already operating in your area is essential. Even though this business is expected to register decent growth in the coming years, you should still dig a little deeper to see if there’s more work than the existing pressure washers can take on.

You can choose to focus on residential accounts or take on commercial clients. If you feel that you can manage more work, explore opportunities for pressure washing in surrounding neighborhoods and towns.

Proper research and identifying what opportunities exist is a crucial step in establishing a flourishing pressure washing business.

Get Your License

The moment you decide that this type of business is a golden opportunity, you need to check the local requirements for doing business as a pressure washer.

Depending on the state you live in, you may or may not need a business license. However, you should apply and obtain one before getting started as it will cover you legally. Make sure to check with your local authorities on what the rules and regulations are to stay on the right side of the law. 

This is also a major plus when attracting potential customers as they’ll feel more comfortable and it will help establish trust in your business. It may also help in meeting the requirements of other parties, such as vendors, who might want to see your license before deciding to do business.

Get Insurance

Even though it sounds easy to start a pressure washing business, make sure that you develop the proper skills on how to pressure wash without destroying the surrounding area, damaging your client’s siding, and causing an injury to yourself or somebody else.  

However, accidents happen, so in order to protect your new business from claims of negligence, injuries, accidents, financial risks, and legal fees, you should purchase insurance coverage. Nowadays, insurance companies can provide you with a quote for pressure washing insurance online, so you don’t have to waste time standing in lines.

Not only is pressure washing insurance a safety net for your business, but new potential clients will also take this as a positive sign that you’re a professional who takes their job seriously and ensures customer satisfaction.  

Choose Equipment

Depending on your service offering and scope, the type of equipment you’ll need might vary. If you only intend on working for residential clients, then you’ll be good to go with a pressure washer with a force of up to around 4,000 PSI, but for commercial work, you’ll need stronger equipment that offers more functionalities. Since this business is physically demanding, choose equipment that is fast but safe and helps you get certain jobs done efficiently.

Practicing also plays a big role as you don’t want to accidentally damage someone’s landscape while power washing their siding. Regardless of how technologically advanced your equipment is, not knowing how to efficiently handle it can get you bad reviews and cause unwanted accidents and lawsuits.

Before making any big investments, rent a pressure washer and practice on your friends’ patios, or driveways as this will give you the best hands-on experience.

Price Your Services

Once you’re done with all the administrative work, decide on your pressure washing service prices. Since you’re a new business owner, you should start with lower prices while trying to attract new clients.

Test what hourly rate gets you most jobs and try to slowly but surely bump the price up every year as your expertise gets better.

It might feel overwhelming at the beginning but focus on mastering few services first and settle on a rate that works for you. As you improve your skills and your business grows, you can adjust your prices accordingly.

Final Thoughts

Market research, obtaining the right pressure washing insurance, choosing the right equipment, and pricing your services, are all important aspects on the road to becoming a successful business owner.

We’re sure that you’ll be glad to have considered all the above-mentioned steps once your pressure washing business is set up and running.

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A Basic Guide to Starting a Home-Based Business

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Starting a business in 2021 is much easier than it was twenty years ago. With advanced technology and digital marketing, anyone can step into the role of an entrepreneur. In some cases, all you need is an idea and a computer.

Becoming a business owner is a path to financial security. Even if you don’t give up your day job, starting a home-based business can lead to financial freedom down the road. 

Are you wondering how to start a business? Keep reading for an essential guide to getting started.

Choosing a Home-based Business

Choosing a business that’s right for you is vital to your success. You want something you’ll stick to for the long run. The best home-based businesses are those you can operate from the comfort of your home. 

Start looking at things you are good at and research to learn if there is a market for what you want to offer. For example, if you have certification in accounting, you can start a business performing accounting services for other small businesses.

Creating a Business Plan

Like any business, it’s essential to create a business plan. This document outlines what your business offers, competitor analysis, marketing strategy, and financial goals.   

The business plan is a great way to measure success and to remain focused on reaching your goals. If you’re starting a business and require financial backing, you’ll need a business plan to show lenders. 

You can maximize solar savings by creating a green business.

Incorporate Your Business

A home-based business is no different from starting any other business model. You want to incorporate your business to add a layer of protection. It’s also valuable for opening a business bank account. 

Separating your business from your personal assets is essential in growing a business. It will help you build business credit. Plus, if you are ever sued, you don’t want someone going after your personal property. 

Get an ECommerce Website

Once the paperwork is done and your finances are in order, it’s time to get your business website up and running. Most businesses can benefit from an eCommerce website. These websites help grow efficient businesses that do not require a physical location or multiple employees.

With an eCommerce website, you can sell products, take deposits on bookings, and so much more. 

Marketing 

A powerful marketing strategy is essential to a home-based business. Determine which social media platforms have the greatest reach for getting noticed by your target audience. 

Use your website’s blog options and photo storage as a launching pad for the information you’ll share on online platforms. 

Don’t be afraid to try different marketing trends, including digital ads.

It’s Time to Invest in a Business

A home-based business is an excellent investment. Once your business is up and running and turning a profit, consider a second start-up. The potential is limitless.

If you need more great tips and information on business start-up trends, we have you covered. Continue to browse our site and check back often for new content.

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How To Set Up a Successful Electronic Business

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Consumers can purchase a range of mechanical items and parts from an electronics company, such as cell phones, televisions, computers, peripherals, and components. If you aim to create this type of business, you should arm yourself with knowledge so you don’t end up like huge electronic retailers that collapse. Read on!

1.Examine Other Electronic  Businesses

Examine and comprehend the business models of existing electronics businesses before starting your own. This comprises the typical markup on commodities, overall consumer satisfaction strategies, and managing supplier relationships. You’ll need this information to determine competitive store policies and prices. Compare and contrast the success of successful electronics stores with those that have closed or failed.

2.Research Your Interest Area of Establishment

If you’re just starting, you’ll focus on the local industry first. It’s also possible that you won’t be the first to play the electronic game. You may be competing with a lot of other small businesses in addition to big stores.

Make sure you do your homework before deciding where you want to locate your business and whether it is a good idea to do so. If your neighbourhood is densely packed with stores, consider looking on the opposite side of town or imagining how you may stand out. People may be hesitant to go through your doors if you come in and offer nothing more than another store.

3.Obtain The Necessary Permits

Check with your state and city to determine if there are any additional criteria for opening your store. If you repair computers, you may be required to pass a state-licensed test to ensure that you are aware and capable of providing proper care.

You’ll also need to check into various business licenses and other forms of documents to ensure that you’re following all of the rules.

4.Have a Competitive Business Plan

Due to the competitive nature of the electronics retail industry and the high risk of failure, you must develop a comprehensive business strategy that focuses on your competitive advantages. Use the information you acquired from your initial case study in the market and business profiles, as well as any personal experience you have with electronics, to show why your electronics company would thrive. 

If you’ve managed an electronics store, for example, you’ll be familiar with the inner workings of this type of retail operation and may have an advantage over other new stores.

In your plan, you need to include the brands you’ll be selling. You need to ensure that they are of both quality and outstanding market performance. For instance, working with certified wholesalers of closures and boxes, guarantee you offer the consumers new brands that are outstanding.

Also, don’t forget to include other regular but essential products such as lights and screens. This is because it is always good to offer a pool of varied products to your customers.

5.Choose a Brand For Yourself

idea

Your company’s brand is both what it stands for and how it is regarded by the broader public. Your company will stand out from the neighbourhood competition if it has a strong brand.

So, while naming your firm, don’t go with a generic name like most electrical stores these days. Try to come up with a distinctive name because the right name is really important. You can begin by considering the business’s nature. In your absence, your chosen name will operate as an extension of your brand, representing you. Part of your brand representation in what you sell. You can add some wire connectors. They are always widely in demand by everyone.

We recommend checking to see if the business name you want is available as a web domain and securing it as soon as possible so that no one else does.

6.Get Startup Funds

banknotes

For starters, you’ll need thousands of dollars to launch an electronic business in the first few months, with a large portion of that money going for rent. A significant portion of the funds will be spent on getting certain in-demand electrical goods as well as marketing your new business.

Personal cash, such as savings, loans from financial institutions, and borrowing from friends and family who are interested in assisting you in starting your business are all options for raising capital for your business.

7.Promote Your Store

Starting a business takes time and effort, as well as determination and vision. If you’ve already decided to work in this field, you should first check into legal and technical issues. After you’ve successfully achieved the first two responsibilities, you should build your brand and sell it. 

You must stay up with the most recent advances and maintain high standards at all times. It isn’t enough to have good items. To expand and develop revenue, it must be adequately publicized. The advertising team must be ready to provide you with a marketing strategy that will interest the audience.

As a result, the two key techniques of attracting new clients are word of mouth and local advertising. Many electronic stores promote in local media and provide first-time customers discounts and advertising billboards. Keep in mind that customer retention is crucial. Take extra precautions with the newcomer. 

They are your billboards. They are ecstatic and will brag about your store for hours. Be friendly to everyone that walks into the store. It’s more difficult to keep customers than it is to get them.

The Bottom Line

Starting and maintaining a business to its success is not an easy task. You need to be dedicated to the course and understand that however hard things get, you need to surpass them. Electronic stores are quite demanding, but a nice business to invest in altogether. Best of luck!

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