California entrepreneurs who want to establish startup businesses should make certain that they validate their ideas. There are several ways that they can do so so that their businesses are likelier to be successful.

According to CB Insights, a majority of startup companies fail within 18 months of raising an average financing amount of $1.3 million. While it is common for startups to have cash flow problems, most of the issues are caused by failing to validate the startups. Before entrepreneurs decide what type of businesses to start, they should first try to identify what problem their company will solve. If there are multiple other products on the market to fill a need, they should keep looking.

Entrepreneurs should ask members of their target markets what they need. While startups may not have the capital to mount massive intelligence-gathering campaigns, they can use informal focus groups to help to create a niche for their products. After determining what is needed, the entrepreneurs should then quantify the need. Using surveys can help to determine how many products are needed. They should continue to keep current with the changing needs of their customers in order to remain successful.

Smart business formation and planning strategies may be vital to the ultimate success of new businesses. Experienced business law attorneys may help their clients to avoid pitfalls and to plan thoroughly. They may also help them to identify capital funding sources and to understand the laws and regulations that govern their intended businesses. Attorneys may help their clients to choose the most appropriate legal entity structures for their businesses so that their clients may be protected from personal liability.