Entrepreneurship opportunities and entrepreneurs have filled the market and the popular imagination. How to start a business? This is a question that grabs headlines and the attention of a large number of people. And if this question has also crossed your mind, then you are reading the right article. Here we provide you with a complete guide that can be very helpful in starting your journey.
Of course, we recommend study and research. Starting a business is not a game. It requires an investment of time, energy, knowledge, and money. None of this can be wasted.
But before starting, Some tips for starting a business
To start a business follow these tips:
- Make sure you understand the commitment that starting a business requires and what it means for your professional and private life.
- Find the resources you need and make sure you have access to them.
- Identify your fixed expenses and make sure you can cover them.
- Be realistic when estimating how long it will take for your business to become profitable.
- Have a “business plan,” and continually update it as you go. You will be surprised how your business evolves.
What kind of person can start a business and become an entrepreneur?
Anyone can start a business and become an entrepreneur. Each individual must carefully study his or her business plan to ensure that he or she has the right qualities and resources to undertake. For example, to start a retail business, the business skills, knowledge, and capital required are very different from those needed to open a franchise.
Buying a franchise of a prestigious brand and its proven business model requires a very different approach than that needed to launch a new business with an unknown brand.
Am I the right person to start a business and make it successful?
If you have a great business idea, with the best location and everything financed, your biggest obstacle may be that you have never done this type of thing before. Don’t be overwhelmed, if you meet the following aspects, you have a high chance of being a successful entrepreneur:
- Effort and courage. Is not easy. You will face a tough test, not only professionally, but also in your private life. If you make a mistake, you can end up in a worse financial situation than you were in before you started. How to reduce the risk? Answer these questions: Will there be a market for my business idea? Will I have access to the necessary resources? Am I the right person to not only start this business but also to turn it into a successful business?
- Money. Starting a business without the necessary resources is difficult and sometimes impossible. In the current state of the global economy, access to finance is more difficult than ever. Additionally, advice on how to access them varies widely. To help you read the point of how to start a business without money in this guide.
- Luck. An old popular saying says “Make your own luck.” However, we must not forget that luck is not always on our side. Some companies fail, not because their leaders are wrong or because the product is bad, but because they have been involved in a succession of misfortunes. Waiting for luck to fill the gaps in your new business is unreasonable, however, you can prepare to take advantage of any opportunity that comes your way.
How to start a business step by step
To start a business, organization is essential. That’s why here we provide you with a guide that may be very useful to you. You will learn which business can work for you, the financing possibilities, among other useful tips and resources that will help you prioritize the most important tasks.
1. Find the idea you would like to launch
Some entrepreneurs have decided to embark on the adventure of starting a business after finding an idea. However, others have not found any ideas that might work. Although no one can say what the ideal business is for another person, we can help you or guide you on your path:
- Your business should be an area in which you feel comfortable and familiar. That is a field that you know.
- Your skills must already be developed in that profile. It’s not time for training, at least for you, it’s time for practice.
- Your goal is to sell. So make sure the business you choose has a market willing to buy your products or services.
- You can look for new niches. There is no need to rediscover gunpowder. Simply look at large companies in a given industry, identify what is missing, and find a way to fill that void.
Our advice: If you think you have found a truly original and unique idea for starting a business, be sure to protect your ideas. Get in touch with an organization that protects intellectual property works. For example, some of these institutions are: OEPM (Spain), INPI (Argentina), INDECOPI (Peru), IMPI (Mexico), INAPI (Chile), IEPI (Ecuador), SENAPI (Bolivia), SAPI (Venezuela).
2. Prepare a business plan
It’s about sitting down and thinking about your business. We are talking about creating a document that can be up to thirty pages and that includes all the ideas you have to start a business. It describes your objectives, strategies, investments, projections, what offers you provide, clients, market, and competition. Additionally, it outlines the steps that must be carried out to achieve the goals and objectives.
The business plan is essential if you want to convince investors, organizations, banks, business angels, etc. to lend you money. Your personality and ability to convince will play a very important role, but it is the business plan that determines whether they believe enough in your project to risk their money.
The priority is to have a short “executive summary” that summarizes your plan in two pages. This gives potential investors a quick insight into what you offer and why your business idea is viable.
A typical business plan should cover the first three years to demonstrate that you have the ambition and a long-term vision. The first year should be detailed, precise, and focused on revenue. Years 2 and 3 will necessarily be more speculative since you will use the data from the first year to adjust your plans.
Benefits of making a good business plan
- Reduce emergency management. In preparing a business plan it is possible to anticipate many problems and prepare solutions in advance.
- A business plan forces you to justify your plans and actions. Preparing a business plan forces you to demonstrate the validity of an action or idea.
- It gives you the opportunity to make some mistakes on paper, and not once you start the business.
- It will be seen as an indicator of commitment. A well-prepared business plan is an impressive document. Demonstrate to third parties, lenders, and suppliers, that you understand the business.
Designing a business plan is essential. It can be the difference between seeing your business up and running or just your plans. There are different ways to make a business plan. You can even make a business plan on a single page.
3. Study of the market and Competition
This point is about being very clear about your strengths, but also those areas in which you are weaker. The reason? Well, it is time to place your business in an environment in which you must take into account who your potential clients are, as well as your rivals.
By doing a market study, you will learn about market trends, the competitors you will face, and your potential consumers, etc. The goal here is to know the environment in which your business will evolve, to minimize the risk of failure. This step also raises questions about the product, its qualities, and its competitive advantage. If your idea is innovative and has no market, try to make it as practical as possible and compete with advice from experts in the field.
If you don’t want to spend too much money on this step, you can choose to use some free tools. With them, you can do some market studies to start a business:
1. Google AdWords: Keyword Planner. This free tool allows us to know the number of monthly searches in the Google search engine for all the keywords (business ideas) that you have in mind.
2. Discussion forums. Search for your niche by typing “business idea forum” into Google. When researching through the forums you will find different elements:
- The number of people on these forums, and the number of active members (potential consumers).
- The number of messages.
- The sections of the forum, and which are the most active.
- The concerns and problems they face.
This will give you a vision to start a business that is of interest to users.
4. Target market segmentation
A great idea can become a profitable business if people are willing to pay for the product or service offered.
- First of all, you must segment the target market to which you will offer the product or service. Do you have plans to sell to young people or seniors? Does your product primarily target women, men, or both genders? Are you going to sell to individuals, companies ( outsourcing ) or the government?
- Once you know who to sell to, you have to determine the price the target market would pay for your product or service.
- If you determine that people are interested in your product or service, but they would not be willing to pay for it, you can consider other business models. Some companies, especially in the service sector, offer their services for free or cheap but are able to make money through other means such as advertising and marketing.
Choosing where to locate your business is a key step and directly participates in the chances of success of a business.
Probably, like many other businesses in the modern world, you have determined that the Internet is the perfect place to run your business. If so, you only have to purchase a domain and hosting. Afterward, everything will be ready to create your own website and start a business on the digital platform.
Now, it is also possible that, after a detailed preparation and discussion of the business plan, you have realized that the best thing for you is to look for a location, a specific point within the city.
In this case, determining which is a good place depends, to a large extent, on your clients. You must choose a space through which the public to whom your service is directed passes. Of course, it must meet other characteristics inherent to any business: good size, ventilation, lighting, adequate decoration, and accessibility. For this last requirement, make sure that clients can access it through public and private transportation, and of course, provide parking spaces.
Funding is by far the biggest challenge for many startups. At this time the viability of your business will be put to the test. It is time to do calculations and, above all, with economic thinking, assess whether your entrepreneurial initiative is really attractive.
You probably need sponsors, investors from other areas. Now is when you should think about this and seek the necessary help. These are some forms of financing:
- Bank loan. This is a sum made available to the company by a financial institution with the obligation to pay according to a predefined time.
- Venture capital or entrepreneurial capital. It is a person or entity that invests in a new company, with good development potential, in order to make a profit on the subsequent resale of securities.
- Leasing. Under a lease agreement, also called rent-to-own, the company owns the assets purchased with borrowed money for the duration of the contract. This is a simple lease with a promise to sell at the end of the lease.
- Financial leasing. This is a lease contract without purchase option.
7. Legal constitution
Finding the right structure for your business depends on a series of factors: the type of business to be set up, the evolution, the risks, the status of the leader, the capital and the number of people involved.
Let’s look at some commercial companies in some Latin American countries. Be careful, the data is not exact for each country. This is a very delicate step, you should seek advice from a professional, ideally, an experienced accountant. The support of a lawyer is also recommended for projects that require complex arrangements:
|What is the number of partners required?|
|Individual business||Consists solely of an individual entrepreneur|
|SL unipersonal||1 individual shareholder (natural or legal)|
|Limited liability company||2 minimum partners – maximum 100 (natural persons or legal entities)|
|Anonymous society||7 minimum partners – There is no maximum (natural persons or legal entities)|
|Simplified Joint Stock Companies||Minimum 1 partner – there is no maximum (person or company)|
|Collective society||Minimum 2 partners – there is no maximum (natural persons or legal entities)|
|Association||2 members minimum, no maximum|
8. Register your business
Your business name will become your long-term identity. It is important that you first choose a name that will have a positive impact on you and your customers.
The choice of your business name is important because with it your business will face the market and its competitors. It allows, firstly, to identify your company and, secondly, to distinguish it from other companies on the market. In addition, the name or brand of the company must be entered in all official documents related to its professional activity (invoices, purchase orders, business cards…).
In principle, the choice of trade name is free. However, you must ensure that the chosen name is not registered by anyone else.
You can also pre-check whether a name is in use using Internet search engines.
9. Creating a logo for your business
Creating a logo for the business is a very important step for entrepreneurs. The logo is the visual identity of a project. Here are some key points to help you in creating your logo:
- It must attract attention.
- Recognizable, legible, and easily identifiable.
- Significant. Your agency must make relevant creative proposals, avoiding any confusion or similarity with other existing logos.
- It should be memorable, simple and allow instant identification.
- Durable. Your company logo must be able to last at least 10 years.
- It should be easily applicable to all media.
10. Request license
Before opening your doors, be sure to apply for the appropriate license. The steps you must follow will depend on the type of company and the laws of the country. For example, if you want to start a food business , you must acquire a health license and a permit to sell alcohol.
To be fully informed about this topic, go to the ministry, town hall or office that relates to your business idea.
11. Business insurance
It is essential to have insurance when you are starting a business. This may include insuring your business, your revenue, and your business risk. Getting the right insurance will help protect your business and minimize your risk exposure.
The types of insurance needed to run your business will vary depending on:
- The type of business.
- The business structure.
- The size of your business.
- The niche or sector to which it belongs.
There will also be certain types of insurance that are mandatory:
- Workers’ compensation insurance. If you employ people in your business
- Third party personal accident insurance. For any vehicle you own.
- Liability insurance. For certain types of companies.
12. Commercial policy or business rules
Commercial policy is a global strategy in a company. Business rules define which direction to go in a given situation.
Examples of business rules:
- Let’s imagine the scenario of a financial institution that has specific rules for its internal processes. A business rule may be (in this case restrictive) that customers under 18 cannot access loans. This is a classic example of what a business rule is and its application.
The necessary policies in any business are:
- Payment conditions.
- Customer service.
13. Accounting obligations
The entrepreneur, whether a natural or legal person, must keep mandatory accounting . Any registered company is subject to a tax regime. Their accounting requirements are different depending on the size and accounting treatment of the company. The accounts that must appear in electronic or paper documents are: the journal or accounting book (chronological record of all transactions: purchases, sales, etc.), the general ledger (brings together all accounts: assets, liabilities and assets ) and the inventory book (elements of the company’s assets and liabilities).
Note : You must have an accountant to benefit from the technical knowledge and advice of the legal and regulatory environment.
You are already clear about what you want. Now is the time to put it into practice . What strategies will you follow to achieve the distribution of your offers? How will you handle advertising?… These are some of the issues that you must take into account for your business idea to work.
15. Rental or purchase of the premises
Companies that cannot or do not want to buy their commercial premises can resort to renting. The following are different types:
- Individual rental. Is the most usual way. An entrepreneur rents only professional premises and pays all rental costs.
- Shared. Shared rental is booming. In these premises, several tenants divide the operating costs:
Many SMEs and large companies already established prefer to own their own premises. However, a type of shared workspace, highly in demand in recent years, is coworking. Both small and large companies have chosen to move to these premises, thanks to the benefits of these collaborative spaces.
16. Decoration of your premises
A company is a workplace, but also a second home. This is where employees spend most of their day and where they greet your customers. Decorate your new business to make it a nice and welcoming place for staff. This reflects the identity of the place, its personality and its vocation. Here are some tips to decorate your business:
- Consult some decoration agencies. A specialized organization will listen to you and interpret your needs, your tastes in decorating and optimizing your space. You can participate in the selection of the necessary materials: quality, colors, decoration elements (paintings, plants…), etc.
- Don’t go over budget. It is not necessary to buy the most expensive objects on the market to achieve good decoration. Get several quotes before making your choice.
Another question you should ask yourself is if you need suppliers . A supplier is the person or organization that offers a product or service to another company. Perhaps, you make your products yourself or you are enough to offer the service. If so, you don’t need suppliers. Otherwise, if you need to purchase merchandise from other people or companies, it is time to start interacting with them. Finding a reliable supplier that offers competitive prices is vital to the success of your business.
The conditions to be negotiated with your supplier should be based on:
- How to pay: bank transfer, credit cards, foreign currency.
- Potential costs: administration, taxes, transportation and payment transactions.
- Possible risks: supplier late payment, defective, late or undelivered goods.
Tips to improve the supplier-company relationship:
- Get to know the people who will manage your consumption and make sure they can be easily contacted.
- Ask them questions about their development or expansion plans.
- Help your suppliers by placing orders in a timely manner. Be clear about deadlines and paying on time.
- Be alert to any business opportunities that you may convey as part of a good relationship between a customer and a supplier.
- Make your business important to your suppliers. Some suppliers may offer better deals if you promise to do business with them long-term. However, this could cause significant problems if they go bankrupt.
How to find trustworthy people for your company? Hiring employees is a procedure that must be carried out with the greatest possible care. After all, your employees will be the ones who move the company forward. Therefore, it is desirable to have people willing to participate in that growth.
- Define the desired profile. The first step in hiring a new employee is to know well what type of profile you want for the vacancy. It begins by describing the functions that the future employee must perform. It especially highlights the responsibilities assigned to the vacancy, the necessary knowledge and skills that candidates must possess. As well as your rights.
- Vacancy announcement. The next step is to advertise the vacancy in different media. Announce the job offer in newspapers, websites specialized in job boards, work groups related to the position profile and also on the company’s website and social networks.
- Hiring. Report details and benefits such as health insurance, food stamps, transportation vouchers, general insurance, possible salary and bonuses. Explain the company’s salary policy, promotion policy, work hours, and company policy on absences.
- Training and qualification. Finally, it is time to develop the integration of the worker with the rest of the team. Let your new employee perform work tasks little by little until he becomes familiar.
19. Website design
Nowadays, creating a business website has become essential. Having a website will increase sales and get you to more potential customers. These details should not be missing from your business website:
- Provide information: How to buy and how to contact you.
- Provide clear descriptions and prices of your product or service. Having a FAQ is a great idea.
- Include testimonials: Testimonials from your customers on your site is a great idea. A good experience from another person increases confidence when choosing a service or product.
- Incorporate basic SEO concepts. Optimizing a website for search engines is a complex topic. In essence, this involves taking steps to ensure that your website ranks higher in the results pages than your competitors’ sites.
20. Opening Marketing Strategy
One of the last important steps you must take to start a business is to plan a marketing strategy before, during and after opening your business. This will allow you to attract clients and retain them.
Marketing before opening:
- Movement attracts more movement. If there are no customers, it is likely that no one will dare to enter it. However, a crowded place attracts more customers. The main tip in this area is to have a list of guests attending the event and generate the first wave of clients. In addition to friends and family, there are several marketing techniques that can help build a fan base even before opening.
- Promotions help attract attention. The main objective is to attract the attention of customers who are near the store and give them the news and invite them to the store.
During and after opening:
- Collecting data from early customers could be valuable. Since successful grand opening outreach can help bring in a huge wave of customers, why not take advantage of this moment to create a relationship with them? It can be through surveys or by collecting data such as your customers’ email and telephone numbers. This can be a great way to keep the tide high after the inauguration wave.
- Be attentive to external factors: new markets, new products, new trends. Success and failure can be fickle elements. In a globalized market, new developments, ideas and opportunities can emerge overnight. It is important to be flexible, to follow what the competition is doing and what is influencing the market. You must be prepared to adjust your business and evolve it.
- Create a social media marketing plan. Facebook, Twitter and other social networks can help your company make its voice heard. They are ideal channels to promote your brand and allow customers to comment and make recommendations.
21. Opening of your new business
!! Congratulations!! Your business is ready! However, you still have a long way to go before this business becomes profitable. You will go through moments of doubt, frustration, long nights of uncertainty. But, never give up or lose hope.
Requirements to create a company
Before we have discussed in detail all the steps to start a business. In summary, these are the basic requirements to create a company:
1. Define enrollment
As we already said, your company must be registered . Now, you must decide if the registration will be in the name of a natural person or a legal entity . Yes, they are legal terms of which we provide you with the definition:
- Natural person: Refers to an individual person who would be the sole owner of the business.
- Legal entity: It is when several people join together. Each of them will perform different functions within the company.
To start any business activity, you need a license. The scope of this permit and the place to acquire it depend on the country you are in.
Taxes must be paid for the added value. In addition, natural persons will pay the Personal Income Tax and legal entities will pay the Corporate Tax.
4. Human Resources
To hire employees, you must register the company with Social Security and open a Visitor Book in your company.
How to start a business without money
Sometimes you have the idea, but not the budget. And this is no reason for you to stop dreaming. The following tips on how to open a business without money will prove it.
Don’t quit your job
It is a way to have income. Otherwise, you may find yourself without funds to pay the bills, the mortgage, and, on top of that, a lot of debt. This situation is not going to help you with your entrepreneurial plans. Of course, you will have to work twice as hard because you will have to fulfill your work and personal responsibilities, plus dedicate time to your business idea.
Also keep in mind that if you plan to open a business, you should not sign an employment contract that restricts your free time to the maximum or prevents you from earning extra income.
Create a business plan
Above we explain how to do it and why it is necessary. It doesn’t matter if you start with some money or zero, you always have to be organized. The more you prepare and anticipate what will happen, the more likely you are to succeed.
Study the competition
You cannot enter the market or start a business blindly. Study all the businesses that have to do with your idea: those that have been successful and also those that have not. If you analyze where others have failed, you will not make the same mistakes. In addition, it examines how much those companies that have succeeded invest, how much they earn, and what they do to gain publicity. Can you do better than them? If the answer to this last question is affirmative, then you are already a large percentage of the way to success.
Test your ideas
Before diving headlong into your business, test yourself. Verify that your proposals are really accepted by potential clients. For example, if you are going to open a daycare, first try to take care of your friends’ children or the children of your family. How do you get along with them? Are they comfortable with you? What can be improved?
Improve your skills
Once you know what type of business you want to open, work hard to improve the skills that will be useful to you. Returning to the daycare example, it may be very helpful to read books or take online courses on child psychology. Also, you can improve yourself in profiles that every entrepreneur should know: economics, marketing , human resources…
Optimize your assets
If you are going to start from scratch, you must make the most of the resources that are already in your hands. Let’s stay in the nursery: your living room can be the first to receive the children and your car, the first in the company.
Ask for help from your friends or family
Yes, the time has come to talk about money. At some point, your ideas will need financial support. You can turn to friends or family to obtain a loan. In any case, make sure that the conditions of this agreement are very clear to both parties.
You should also cover your back, in case the business fails. Thus, in the contract there may be a clause that indicates that, if the company fails, you have a certain period of time to return the money.
Look for other sources of financing
There are government offers that support new entrepreneurs with loans to start a business. Of course, the specifics of the contract depend on the country. However, there are some more or less invariable requirements that your business idea must meet to access these loans:
- Field of action in the country that grants the loan or in territories that belong to its domains.
- Have this offer as the only way to obtain financing.
- Ability to justify the amount of money to invest.
- Not have debts with the government.
How to start a business at home
When it comes to making money, we create different alternatives: opening a home business is one of them. To do it successfully, we give you the following tips:
Identify your resources
You must be clear about what you have at hand. Those resources you can count on. We talk about money, energy, time, people, experience, and everything that can help you open a successful business.
Select the right business
Once you are clear about all the resources at your disposal, develop the business ideas that best adapt to your environment and possibilities.
Prepare a business plan
It doesn’t matter where you want to start your business or what type of entrepreneur you are. If you have in mind to open a company, you must design a plan. Above we detail everything you should consider when preparing it. Since your business is from home, you also have to pay special attention to the location of your house and the number of people who circulate in that area.
Be careful with the investment
You can’t throw all your money at your business idea. No matter how cool you think it is, you should always protect yourself. To do this, you must be clear about what you really need to get started. From there, and depending on the profits, you start investing more money.
Have a land use license
Normally, homes have a land use license for housing purposes. That is, they are residences. To open a business in your home you must also obtain a commercial land license . This is very important, because breaking the law would cause you big problems. So, take help from the relevant office in your area to obtain the necessary documents.
Mistakes when starting a business
We all make mistakes. Especially if we are newbies. Opening a business means taking risks and risk increases the possibility of mistakes. That is why we provide you with a list of mistakes that you should avoid if you have a business venture initiative in mind.
Great investment and loans
Make sure you have enough capital to start a business. Don’t invest everything, walk slowly. First, test the terrain and when you start to get your footing, then put in a little more money.
If you need investors or loans to begin with, always try to acquire only the amount you need. Pay attention to the terms of the contracts.
Not doing a market study
Market analyzes are essential to understand the competition, potential customers and advertising resources. Not doing them correctly can give you wrong ideas. Whether what you initially thought has a chance of success or not is an answer that only in-depth market research can give you.
Differentiate profits and income
To be clear about the numbers, you must know the difference between these two concepts. Income refers to the total money you acquire from the sale of your product or service. Profit, on the other hand, is the capital that remains after paying bills, taxes, suppliers, etc…
Create a work team
It is not enough to have workers, you need teamwork. Manage group activities that make individual tasks much easier and more bearable.
Ignore customer opinion
Even if your business begins to succeed, do not fall into self-sufficiency. There is always room to improve. And those who can best tell you what your clients are like. Always keep an open ear for whatever they have to tell you. Their opinions, their complaints, and their suggestions can be the difference between the success or failure of your business.
Starting a business can be exciting and intimidating at the same time. This requires a lot of work, a lot of preparation, research, and effort. However, remember that the world belongs to entrepreneurs. Modern times offer different paths to carry out your business idea. You can start it online or choose a point in the city to open it. You can create it from home and even start it with no money in your pocket.
The important thing is that it is possible. Starting a business, growing economically, personally, and professionally is within your reach.