When people decide to quit their job and start their own businesses, they face many questions. Some can't come up with the original idea of a successful startup, and some don't know where to start. If you plan to create your own business in 2022, you can develop and implement an effective strategy even during the post-pandemic crisis. Here are four useful tips on starting a business from scratch, finding your purpose, and avoiding mistakes.
How to Choose a Direction in Business
When choosing a direction in business, it is necessary to build on personal knowledge, interests, and experience. According to the rating of the financial and economic magazine Forbes, the
Your startup will bring both profit and pleasure if you listen to your desires. Be sure to think about what you would do, even for free, and an ingenious solution will almost immediately come to mind. If the idea has formed in your head, it is necessary to assess its viability. Analyze the following points:
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market situation;
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products in demand;
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the value of your product;
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your financial capabilities;
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original presentation.
Having all the data, you’ll understand whether the offer can compete with similar products and whether it would be in demand in a few years.
You need to approach the creation of your business responsibly and consider getting an MVP first. MVP is a product with only core functions that brings value to the end consumer. Experienced entrepreneurs use this to test hypotheses and check the viability of the conceived product, and how valuable it will be in the market.
The results of testing the minimum viable product and feedback from the target audience help you understand whether you need to develop the project further and what changes you should make to the strategy.
Building a Business from Scratch: Intricacies and Tips
Remember that starting a successful business from scratch is a complex process that requires material investment on your part. Be sure to be inspired by the famous entrepreneurs who have built a business empire with their products but do not think it was easy. Now you will find out some of the intricacies you will likely face on the way to a successful startup.
Consistent Business Plan
If you have already come up with an idea and thought out a strategy, you need to calculate everything in detail. A startup owner, their partners, and investors need a business plan for a quick launch.
The business plan includes a detailed description of the product and the options for further transformation, an analysis of the market and competitors, and the target audience's characteristics. Since the plan should show how much money will be required to launch the project and when the first profit appears, include the following parts in it:
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Analysis of the cost of goods or services.
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The cost of advertising and other types of promotion.
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Salaries of employees and external services (e.g., delivery)
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Funding sources and taxes.
Thus, you will understand the amount of investment and how much you will have to spend at the initial stage of launch. You can proceed to the next step only when the business plan is ready.
Attraction of Investments
Initially, many young startups don't have the money to create large-scale projects. In this case, the entrepreneurs seek financial support from different sources.
If the business benefits the residents of your city or even the region, then you can ask the state for help. Prepare an impressive presentation, talk about the advantages of a startup, and you can count on a loan with a minimal interest rate, concessional leasing, or loan.
Also, many people in business raise money through crowdfunding. Social network users who see your project and believe in it can donate any amount of money and thus support the idea. Conforming to Fundera, the crowdfunding market will grow to
The specialists recommend contacting investors only when you are fully confident in the startup's success. Investors are the people who allocate capital to you and then expect to make a profit. They can be on startup platforms, social media, the private equity market, crowdfunding sites, etc. It would be best to have a brilliant idea backed up by a thoughtful business plan and strategy to get money from them. You need to carefully choose your investors and not agree to a suspicious contract even in despair. Before signing the papers, please find out more about the investor and his reputation, and only then close the deal.
Implementation of IT Technologies
In the context of Covid-19, many entrepreneurs have faced a rapid drop in income and the volatility of the global economy. It forced them to rethink their business strategies and introduce digital technologies. IT automates the organization's tasks in different areas, making it easier for employees.
For example, a software ecosystem for restaurants, where customers can book tables in a mobile application, pre-order dishes, order delivery, etc. Additionally, employees can optimize their workflow and reporting processes.
Business analytics will also be helpful for any startup. Thanks to the collection and processing of Big Data using CRM systems and artificial intelligence, companies can now learn about the buying path of their customers and understand when and where they can be interested.
The use of digital technologies in business will give the company a chance to survive during the post-pandemic times and even allow it to scale.
IT solutions will help assess customer engagement and apply the obtained data to increase growth potential. It will ease employees' tasks and help them focus directly on sales and customer interactions.
What IT technologies a startup can apply at the initial stage:
- CRM;
- mobile apps for customers;
- chatbots;
- booking software;
- SaaS solutions.
The international analytical agency Gartner forecasts that global IT spending will reach
Business Registration
If you have a small business, registering it will not be difficult. Many startups don't want to enroll because they use their legal name. It is the freedom of every person, but by refusing to complete paperwork, you deprive yourself of personal liability protection, and legal and tax benefits. You can become an individual entrepreneur (IE) or a legal entity (usually LLC).
For those who have a small business (clothing store or repairs), IE is suitable. If you open a company with high turnover and plan to withdraw large amounts by bank transfer, become an LLC.
It is easier to register and close an individual entrepreneur than a legal entity. There are fewer reporting requirements for an individual entrepreneur. On the other hand, an IE cannot attract investment - only take loans and borrowings or arrange to lease.
In case of violations, the fines of an LLC are higher than those of an individual entrepreneur. But the LLC is responsible for the debts only with the organization's property. The founder of the IE is responsible for their property, which they own as a private person.
Open a Successful Business from Scratch
Creating a successful business from scratch is not easy, even for an experienced entrepreneur. In this case, you do not need to rush and establish all the processes in one day. Be patient and carefully prepare each step to conquer the market:
- come up with an idea;
- make a business plan;
- find investments;
- make calculations;
- register a startup and hire employees.
It will take a lot of effort, but you will see the result within the first year if you saddle everything correctly. Do not forget to implement IT technologies and trust the professionals. You can do everything - the main thing is to start!