Business

How to start a business: 7 tips for a novice entrepreneur

We help businesses at all stages of development with direct and venture investments, offer lending and participation in management. Among the clients are many fledgling entrepreneurs at the stage of a promising idea or MVP (minimally viable product).

Here are 7 tips for budding entrepreneurs that will increase their chances of starting a strong business.

1.  Understand the law

If you want to build a serious adult business with the prospect of scaling, it should be official. To do this, you need to familiarize yourself with the legislation of the country in which your company will operate.

Time, patience and effort are needed to open a sole proprietorship or register a legal entity, choose a taxation system, obtain all permits, licenses, extracts and certificates, organize documentation. When it comes to starting a business, entrepreneurs are so consumed with ideological issues that they forget about friendship with the law or postpone it until the last moment. Then the “paper” red tape takes away strength, tires and eats away some of the enthusiasm and motivation, and their reserves will be needed more than once at the next stages.

I advise you to have the contacts of a familiar lawyer by your side, who will enlighten you on all the subtleties of the case and will be able to explain them at your fingertips, so that you can prepare your business for legal activity quickly and painlessly.

2.  Plan your activities

90% of the success of the enterprise depends on numbers, plans, calculations and only 10% – on the inner intuition of the owner. We all like to go our own way, but starting a business is better with a proven scheme.

Analyze the market

You don’t necessarily have to be a super innovative startup and invent a bicycle. A new, unfilled niche where there are no competitors is a minefield. Think about why this happened. Perhaps there are still no players there, because no one needs a similar product or the market volume is too small for the future.

There is no need to do something that absolutely no one has done before. If this is your first business, set yourself the task of creating a product that will surpass the competition in something specific. This will be your unique selling proposition.

Make a business plan

A business plan will help not only to assess the potential of the project for yourself. Usually, this is the first document that people pay attention to when you want to take a loan from a bank, get government grants and subsidies, and attract investors.

By the way, when drawing up a business plan, I advise you to keep the following thought in your head: we overestimate what we can do in a year, and underestimate what we can achieve in ten.

Calculate the financial model

Many businesses fail precisely because of financial losses, for which the owners then settle for years. The financial model brings order in budgets. Here you need to take into account income, expenses, investments, prices, etc.

It is important to be flexible and create different development scenarios: optimistic, basic, pessimistic.

Write down business processes

Each business process has a specific purpose, subordinate to the general purpose of the enterprise; the employee who is responsible for it; resource; quality control and error correction system; your KPIs. It is the processes that determine how the company works: looking for employees, solving customer problems, producing products, scaling.

Young entrepreneurs especially need clearly defined business processes: this will help avoid chaos and immediately start effective work.

3. Do what brings money

Often, novice businessmen try to grasp everything at once and from the first day build a “beautiful” business – with a pathetic mission, vision, strategy; creative identity. Moreover, companies with well-thought-out communication have the greatest success today.

I would not advise you to focus on abstract things in the beginning. It should be remembered: the primary task of business is to make money by solving the consumer’s problem. Coming up with the perfect brand name, finding the right logo, setting up social media and Folsom SEO, and reading a few more popular business books as a team is helpful, but it’s not what makes a business profitable quickly.

Start with an MVP. In the beginning, it is important for you to find out one thing: can your business sell at all and make a profit? Does the target audience need your product or service?

4. Rest

When a person starts a business, he starts working 24/7. Especially at the start-up stage, when everything needs to be thought out and foreseen for everyone, and the responsibility for success lies only with you.

This is one of the non-obvious, but common mistakes. Enthusiastically, the entrepreneur overworks, fills the entire thinking space with thoughts about business – and this is the first stage of burnout. Irregular work schedule and excessive workload leads to the fact that a person is exhausted and loses any desire to continue.

In employment, income determines the amount of time spent in the office. In business – the number of things done during this time. Determine the limits of your working day and try to work as productively as possible during this period. As an example, set clear tasks: instead of finding a supplier, make a list of 10 potential suppliers and contact the most suitable candidate.

Allocate the rest of the time for rest, hobbies, resource recovery. I advise young entrepreneurs to learn to abstract and distance themselves from work: business needs a fresh leader.

5. Delegate

Another tip is not to take on too much. Beginners want to keep everything in their hands, but the main resource of an entrepreneur is time. You should not handle every process with your own hands: learn to delegate.

A good business is one that can continue to operate efficiently when its owner changes. For this, you should build a strong internal infrastructure, invest in people, and accumulate talented specialists around you. Remember that looking for people for vacancies is not always a winning strategy. If you see a valuable specialist on the market who will be useful to the company, take him to the team.

6. Find a mentor

A mentor is an experienced businessman with an unbiased outside view. He will see weaknesses and suggest opportunities for growth. In addition, it is networking: useful acquaintances and new contacts.

Usually, mentors have also been helped in their time, and now they want to share their knowledge. Some entrepreneurs engage in mentoring when their business is off-season. You can find such people through acquaintances, in social networks, on paid services or with the help of competitive accelerator programs.

7. Do not forget about training

Making mistakes and empirically gaining experience in practice is good, but having a theoretical basis is even better. Improve your qualifications at courses and trainings, gradually understand all aspects of running a business: marketing, finance, management, sales, communications, recruiting, etc.