When challenges arise, opportunity knocks. For Canadian technology professionals, now may be the time to start an information technology (IT) business. 

Regrettably, several technology companies are reducing their workforces due to present economic conditions and based on concerns those challenges will persist in the months ahead. Inflation in Canada remains stubbornly high at 6.9% as of October 2022, raising costs for everything from gasoline to raw materials and food. 

Regardless of industry, inflation is pressuring small businesses to make tough decisions about their finances to try to maintain healthy profit margins.

That gives IT professionals of all walks a chance to channel their entrepreneurial spirit and launch a tech startup. Much like a technologist, entrepreneurship is about problem-solving.

A software developer planning a startup IT business

Considering our economic environment, the moment to strike out on your own may be at-hand. But doing so successfully means strategizing and determining how to get your tech startup going.

7 Steps to Starting an Information Technology Business

There’s no single, surefire way to create a successful tech startup or IT business. Let’s face it: the odds are stacked against you. But you relish a challenge, so par for the course.

Here are seven steps for entrepreneurial technologists to consider as they map a path to success:

1. Identify a market need

What problems can your tech startup solve? What kind of IT business do you want to create and grow? The possibilities are many, such as:

  • An IT consulting business
  • An IT support and services business
  • Mobile app development
  • Software development
  • Managed service provider
  • Break-fix IT services provider
  • Managed security solutions provider
  • Software-as-a-service (SaaS) provider
  • Value-added reseller

Figure out the type of tech startup you want to establish, look for problems that interest you, and devise innovative solutions to address them. In other words, what can you do better than your competitors, or what glaring need do you see that you can provide to your target customers?

2. Research, research, research

After deciding what kind of IT business you’ll establish and the problems you’ll address with your expertise, take ample time to thoroughly research the market you want to enter, who your ideal customers are, and how you’ll promote your products and services to them.

Data from CBInsights finds 35% of startups fail because there’s no market need for their services or products. That highlights the need to conduct a risk analysis and evaluate your plans. Researching and validating your idea can be the difference maker. Moreover, finding a mentor to help you hone your ideas and provide guidance on achieving your goals may be worthwhile.

3. Establish your value proposition

Your strongest selling point is the value proposition you offer. Think of your value proposition as a straightforward statement that explains what your tech startup does and the problems it solves. It communicates to your target audience what you do, why your product or service is valuable and necessary, and what’s unique about it or your company versus the competition.

4. Build your team

Operating on a shoestring budget isn’t easy (and we’re being polite). But as a small business owner, you can’t do everything all the time despite your desire to try. That means you need to build a technical team to help with product development or other aspects of your startup. 

Think about the technical skills your startup needs. Do you need front-end and back-end developers? Is it necessary to find software developers with iOS and Android development experience? You might not have the financial resources to hire full-time engineers initially, so a possible workaround is engaging the devs you need on a freelance or contract basis. Regardless, assessing potential candidates presents challenges. That calls for creating a recruitment strategy to help you find and attract the talent you need.

5. Create a minimum viable product (MVP)

Now it’s time to create a minimum viable product, an early version of the product or service you’ll provide that may not be ready for primetime but has enough features and functionality to test it. 

The goal is to demonstrate its benefits to attract and retain early adopters or customers. It also helps create a feedback loop from your users that can guide future development. Think of it as a learning opportunity to strengthen your product or service.

6. Have a business plan

A goal without a plan is but a wish. Your business plan is a blueprint that defines your business goals, mission and vision statements, timeframes to meet your goals, outlines profit and loss, and your marketing strategy. 

That plan is also essential to attracting investors to fund your business. For example, if you wish to seek a small business loan for your startup, a financial institution will want to see all the details of your business plan.

7. Draft a marketing strategy

Speaking of marketing, crafting an effective marketing strategy takes more time than you might think. There are many steps you need to take before diving into marketing strategizing, but leaving it to the latest stages in your startup plans can slow you down when you’re ready to launch. Instead, develop your brand and target audience as early as possible. That’ll give you insight into who your customers are and how to reach and entice them to sign up for your services.

Expect the Unexpected: Protect Your Tech Startup With Insurance

You’ve got a lot to think about and prepare for to get your technology startup off the ground. Although entrepreneurs tend to be risk-takers, if there’s one thing you don’t want to take chances with, it’s protecting your fledgling startup and finances. 

After all, what would you do if facing a lawsuit, suffering a cyber-attack, or a fire rips through your workspace and destroys your contents? The cost of dealing with such events can be debilitating and bankrupt you before you can see your startup thrive. 

Explore your risk management options by getting a free information technology insurance quote from Zensurance. Regardless of the type of tech startup you’re launching, we can find the protection you need at an affordable price from one of the more than 50 insurance providers in our partner network (and remember: a business insurance policy is tax deductible). 

– Reviewed by Vinoth Thiru, Team Lead, Technology & Professional Services, Zensurance.

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About the Author: Liam Lahey

Liam is the Content Marketing Manager at Zensurance. A writer and editor for more than 20 years, he has been published in several newspapers and magazines, including Yahoo! Canada Finance, Metroland Media, IT World Canada and others.