One of the most alluring and at the same time most competitive industries, the cryptocurrency market is becoming the main target of many startup enthusiasts. While it can be a bit difficult in the beginning, the following seven tips will make the struggle much more bearable.
1. Familiarize Yourself With The Field
Fortunately, since cryptocurrency is one of the most popular digital assets and technological advancements, there are thousands of pages of quality content that you can read through. This includes blogs, forums, chats, and even books that can be found online. Get to know the ins and outs of blockchain, since it acts as a basis for every cryptocurrency or platform available. Don't be afraid to message the founders of some of the more successful businesses - they'll be able to provide you with their experiences that you wouldn't be able to find on the Web.
2. Plan Ahead
A crypto startup is unlike any other . There are a lot of specifics involved due to the volatile nature of these assets. This is also the main reason why you shouldn't stick to the templates of traditional business plans. While it's still a good idea to predict your budget and the expenses involved with running this type of business, your plan should be highly flexible. Pay special attention to the worst-case scenarios - even though you might be discouraged once you realize that this is a possibility, it can prove to be your saving grace.
3. Investigate Your Competition
With over 250 crypto exchange platforms and more than 4000 different cryptocurrencies, you have a lot to compete against. You'll need to do a thorough investigation to get an idea of what your strategies should be. Fortunately, a tool called Spokeo could do all the hard work for you. First, visit Spokeo's official website . To do a competitor analysis, you'll need a number or an email of the target business since that's what Spokeo compares its existing data with. It works as both a reverse phone lookup and an email lookup tool. By clicking on the corresponding tab, entering the information, and pressing the button, you've successfully run a search that you can use to investigate your competitors.
4. Choose a Business Structure & Register For Taxes
Most of the crypto organizations are corporations, but this is not a requirement. Your startup can also be a sole proprietorship, a partnership, or an LLC. Which structure you're going to choose depends on multiple factors such as your budget, the number of owners, how much risk you're willing to take, etc. If you want to build a relatively small startup with a tiny budget and simply test out the waters, sole proprietorship or a partnership are the way to go. Otherwise, choose one of the other methods.
Also, once you're ready to start, you'll have to register for taxes. This process slightly varies from state to state, so it's best to do a checkup on your governing entity's official website.
5. Open a New Bank Account
It's never a good idea to use the same bank account and payment cards for your individual transactions as well as your corporate transactions. One of the main reasons why you should go through the struggle of getting separate ones is due to much easier bookkeeping. You're able to track all the finances that go in and out of your company. There's always a possibility that you'll be the target of an audit by the IRS, and if you're using the same bank account you'll be struggling with the invoices and receipts. Also, it's extremely unprofessional not to have a separate account - especially if you're trying to attract stock investments.
6. Acquire Permits & Licenses
If you're looking to start a crypto exchange, you'll need to get your hands on specialized crypto-licenses as well as traditional business licenses. In case you want to act as an intermediary in transactions between cryptocurrency and fiat, you have to obtain a Money Transmitter license. Besides that, you might need BitLicense, which covers any virtual currency activities. It all depends on the exact activities that your company will engage in, which is why it's best to consult a professional beforehand.
7. Figure Out Your Brand
Everything that you've done so far falls into the water if you aren't consistent in your branding, marketing, and business strategies. A brand in wider terms is something that resembles your company - essentially an image that you create for it by doing certain actions. Make sure to plan it out thoroughly before moving through with it, and once you've established a brand, stick to it as much as you can.
Maguire Haigh is a marketing manager for Spokeo. He is interested in the latest technology trends, marketing strategies and business development. He also prefers traveling, exploring the world and meeting new people. Maguire has great experience in creating and editing articles on different topics.