How to create a start-up company in Italy?
A start-up is a company established for less than 5 years that provides, in the reference sector, a new business model compared to the one already current on the market.
Like all newly formed businesses, it faces many obstacles in attempting to acquire its share of the market. Many of them, within a few years, are forced to go out of business due to excessive costs, market saturation or other multiple reasons, often attributable to the absence of an optimal strategy.
The costs to be incurred
From the initial stage (so-called pre seed), in fact, the company is faced with expenses necessary for the constitution, start-up and development which, inevitably, turn out to be higher than revenues, at least until the market will reward the strategic choices made.
Among the main costs that every start-up has to face are those for:
- the establishment and goodwill.
- permits and licenses;
- marketing and advertising;
- legal and tax practices;
- the purchase or rental of premises, equipment and materials;
- employees (salaries, social security, insurance, etc.);
- any advice from experienced professionals.
For this reason it is very important to establish a business strategy that accurately indicates the market objectives that the company intends to achieve in a specific time frame and the expenses necessary to pursue them.
The strategy
Brilliant ideas, passion and determination are fundamental, but alone are not enough to revolutionize the market.
It is first necessary to objectively analyze the real potential of your business idea and, once the feasibility has been ascertained, use all the tools to implement it. Therefore, every successful entrepreneur must necessarily follow the following steps:
- Analyze the qualities and the real market prospects of your products or services: understand, that is, if the latter are innovative compared to those offered by the competition or, at least, have sufficient opportunities to carve out their own market niche. To get good feedback, he should at least perform:
- an analysis of the market and competitors (e.g. size, turnover, presence on social networks, products offered and related prices, etc.);
- a preliminary survey among consumers or direct recipients of the product/service offered.
- Prepare the first business plan, that is a detailed program for the development of the start-up, from its establishment to the placing of the product/service on the market.
This document will have to be modified and renewed several times over time, but it will always represent the reference point to shape future business strategies.
In the subsequent article “business plan for startups: the most important points”, we talk about how the business plan must be prepared correctly. - Choose the team that will make up the corporate structure:
- partners who share the same objectives and are willing to invest economic resources, time and skills in the start-up.
- Employees and specialized external professionals, who marry the work philosophy and ethics of the company.
Economic resources
Once the strategy has been defined, it is time to find the financial resources to meet all the expenses indicated in the business plan.
Even if the initial budget is small, there are several tools available to the entrepreneur to obtain the necessary funding for the start-up, including:
- the “Business Angels”: they are usually entrepreneurs or managers who intend to contribute to the development of the start-up from both a financial and a working point of view, using their own economic resources and skills.
- “Crowdfunding”: collective financing requested from the community (usually from the web), which can take different forms. The most effective is equity crowdfunding, through which the user, through his own payment, buys a shareholding title of the company (quotas, shares, etc.).
Crowdfunding is also an excellent tool for assessing consumer satisfaction with the corporate project and the products/services offered (see point 1 of paragraph “2. Strategy”).
- The “Venture Capitalists“: investors (companies, investment funds, etc.) who make their venture capital available to finance the start-up or growth of a company with a solid project, in exchange – generally – for a significant share of the company or a significant position in the BoD.
- Incubators and acceleration programs: they make the premises, equipment and skills of their professionals available to support the development of the business strategy of the start-up. We talked about it in a previous article (click here to read it).
- Incentives: the European Union, the Italian State and Regions provide companies with countless incentives – in the form of subsidized loans and grants – to support business projects and presence on the international market.
It should be remembered that people who invest in the capital of an innovative start-up or SME are holders of a tax credit of 50%, pursuant to art. 38, paragraphs 7 and 8 of the Relaunch Decree (D.L. 34/2020) (click here to find out more).
Our “incentives for companies” page periodically updates users on all the most relevant incentive measures (click here to open it).
Legal and fiscal support
Among the doubts that invest every entrepreneur in the start-up and development phase of the company, one of the most common is the choice of external professionals (lawyers, accountants, web agencies, market analysts, sector experts, etc.) and the related costs for advice and assistance in carrying out the activities indicated in the previous paragraphs.
Our advice, especially in the early stages, is to rely on serious, qualified professionals with expertise in business consultancy, since the costs incurred will almost certainly be lower than those that will derive from an incorrect strategy prepared independently, without any external support.
Our Law Firm, thanks to the expertise and experience in consulting and assistance to start-ups, both in the legal and commercial and corporate fields:
- provides all entrepreneurs interested in starting their own start-up or defining an optimal business strategy, advice and specific assistance in bureaucratic and commercial practices;
- assists its clients in the market analysis phase, in the preparation of the business plan and in the search for the economic resources necessary to finance the start-up;
- supports the company at every stage of development, recommending the best commercial and legal strategies to be implemented.
Contact us at the numbers +39 0683521985 or +39 3711453121, or write to us at info@studiolegalecoscia.it for specific advice.
