How to create your own business from scratch: a practical guide. Business process diagram for the impatient If you liked the thoughts in this note, then it will be great
Every entrepreneur comes to the idea of starting his own business for different reasons. Someone was disappointed in their partners, someone was tired of working for an outsider, and someone had been hatching a unique project all his adult life and now decided to bring it to life. Business projects from scratch always require special attention, since the most difficult thing is to take the first steps and direct the work in the right direction.
Rules for starting a business from scratch
Very often, novice businessmen do not fully possess the knowledge that is necessary to launch an idea, even the most successful and ingenious one.
In order for a business to prosper and not suffer the fate of a quick liquidation, it is necessary to strictly adhere to some rules:
- If you have no experience in opening even the smallest business, never take loans.
- At the very beginning, it would be nice to ask yourself the question “What will I lose if I burn out?”.
- Work out two scenarios at once - successful and unprofitable.
- Never invest in an enterprise money intended for other global purposes - educating children, treating, repaying loans.
- Carefully study the market in which you are going to occupy, and compare this information with your capabilities.
- Don't take on projects you don't understand.
- Consult with those entrepreneurs who have already achieved some success in this area.
- Pick an idea that really piques your interest.
- Be sure to write down all your plans and draw up a clear strategy for their implementation.
- Recharge with optimism and do not give up at the slightest setback.
And most importantly: never enter the open spaces of entrepreneurship with the only thought of how to earn money quickly in order to pay off debts. This incentive is sure to lead to collapse.
Business Creation Algorithm
To ensure success at the very beginning, it is important to understand what the whole process of starting your own business looks like. So that the question of how to write a business project does not confuse you, follow the following instructions.
Choosing an idea
Relatively speaking, your activity should become a barter exchange of your skills and knowledge for money. For example, you are an excellent driver, and someone is looking for an instructor. The result of such an exchange will be mutually beneficial to both parties: you teach driving, and they are ready to pay you for it.
If it's not so easy with the choice of an idea, take a pen and a piece of paper and write down everything that you know how to do, and, most importantly, what you like to do. Arrange this list in descending order, and the direction that you should develop will remain on the first line.
We analyze the market
Having decided on an occupation, you should understand how in demand it can be in the current conditions and in the place where you are. To do this, you need to conduct a market analysis of those goods or services that you will sell.
Identify your main competitors. Maybe even get in touch with them to learn about successes and pitfalls.
We draw up a business plan
It must take into account all the factors that can directly or indirectly affect your company. A diagram of how to make a business project, if you do not have the appropriate education, can be represented as follows:
- define goals. Simply put, answer the question why you are doing this;
- try to foresee risks and opportunities to overcome them;
- highlight the strengths and weaknesses of your idea;
- make a development forecast for the next five years;
- draw graphs of profit growth, customers, assortment increase, and so on;
- calculate expenses;
- consider advertising options.
Of course, this model is given in a very compressed form, but it will be quite enough if we are not talking about creating a large holding.
We develop advertising moves
To find the first customers, it will be enough to notify your closest relatives and friends about the opening of your company. They can become your first audience, which will attract other consumers.
Do not forget about printed materials - leaflets, announcements, business cards. This method is not the most effective, but it also does not hurt.
Don't forget your own website. It is the Internet resources that today allow to achieve significant results. If your business is not very big, you can limit yourself to groups in social networks. For more significant success, you will already need your own page on the Internet.
Registering an enterprise
In order for your reputation to remain bright, and work to proceed without unnecessary difficulties with regulatory authorities, it is better to formalize everything and calmly think about development, and not about your own safety. Moreover, today the state is meeting newcomers halfway and offers a number of programs to support small businesses.
Having received and completed the first orders, do not be too lazy to analyze the passed stage. You may have to adjust something somewhere, and completely exclude or replace something. In general, think more and do not get tired of acting, and success will definitely knock on your budget.
Where to start your business. How to start a small business from scratch: Video
You can complain every day about the unstable economic situation. You can wait until the crisis is over. Or you can just create. Online. No one dares to raise the rent, there is no need to be afraid of a currency jump. But what is the point of business on the Internet? We decided to get the details from an expert in this field, the founder of the Knigogo portal and a graduate of the business camp Made in Ukraine by Sergey Fomin.
Knigogo - an online library that presents e-books of various formats, fragments of audio books, a selection of stores for bargain purchases of literature.
Sergey Fomin, founder of Knigogo, graduate of Startup Ukraine
We have been planning this project for a very long time. It was created from our first student project and an online library. I came to Startup Ukraine with plans to do something cooler with the knowledge I had about online promotion.
When I went to a business camp and talked to entrepreneurs, they supported the idea of the project. This inspired me. I started doing it. Studied many foreign competitors, studied their structure and functionality. After that, we sat down with the team and created the backbone - the design of the project as we see it. During the week, we sat for days with leaflets, drew the structure of the site, came up with the main functionality. Then we got together with programmers who develop websites, and began to create the Knigogo project in stages. Additionally, we are very confused about its automation inside. We wanted to make the placement of content almost automatic - this would accelerate the growth of the project, reduce the number of employees and the likelihood of mechanical errors. So we created the framework of the project.
Online business is an area of darkness. When thinking about creating your own platform, a lot of questions arise. Let's take a step-by-step look at how an online business begins.
Analysis of Ukrainian and foreign markets
In Ukraine, online resources have an outdated design and navigation, so a focus on foreign markets can play a decisive role. Product design, branding and identity trends come from Western markets, so it is important to keep abreast of new trends in order to be leaders. At the same time, we should not forget about the specific features of the Ukrainian market: you need to understand what the audience is ready for, what is worth trying, and what will never become a trend. Sergey says that to start the Knigogo project, he researched the market quite deeply,
I analyzed the Ukrainian market and realized that it is not busy. The sale of e-books in Ukraine is practically not developed. The plans are to develop this business. My experience is that somewhere around 65% of people who love to read are willing to buy e-books. Statistics show that the number of consumers who buy this format of books is growing. Copyright is becoming an increasingly protected area, so resources that try to distribute books for free are being stifled. Therefore, it is important for the project to promote the culture of purchasing books. Moreover, they are quite cheap.
Before launching a product on the market, whether online or offline, you need to make sure that there will be a long-term demand for the product.
Capital
It is common to think that an online business requires less attention and capital investment. This is wrong. Creating a high-quality Internet resource is a laborious and costly process that will work for you in the future.
It cost me 5 years of my life - 5 years of experience. I tested different technologies for promoting online libraries, different website design options, different functionality to come to what I have created now. If we talk about money, then the initial capital amounted to about 200 thousand hryvnia. This is just the development of the site framework itself. The same amount will need to be invested in the development of the functionality of personal pages for each user, the so-called mini social network for book readers.
Since the niche is competitive on the Internet and social networks, I think that it will take six months - a year to reach the minimum profit.
How does the business make money?
The uniqueness of the resource
There are an abundance of websites on the Internet. Resources in one direction are similar to each other, so there is no point in entering a crowded segment. Only if you give the consumer some kind of “bun” or create a stylish site with the most convenient navigation.
The uniqueness and idea of the project was to make it very simple and understandable. So that you can do everything on it: from reading book reviews and biographies of writers, to taking notes on the book and saving quotes in your account. Now we are developing personal pages for each user, with the ability to write down their notes, book reviews, add quotes, create lists of books to read and communicate with other readers. We also want to collect and write detailed reviews of ALL the books in our library, and not just annotations, as is done on almost all competitor sites. The plans are to collect the largest database of reviews on literature.
Design
A picture sells, so visual content is very important. Take photos yourself, hire a good graphic designer to make your visuals stand out for their quality and uniqueness.
For online resources, such a concept as UX / UI design is important. Its goal is to create a selling look of the page where the product is placed. For example, where is it better to place information about the product and the “Buy Now” button, under the photo or on the right? Or maybe it’s better to add a video review of the product and place a button for the purchase in the video. This task is solved by the UX / UI designer. He must come up with solutions that will affect sales.
Format
The resource can be transformed into a marketplace. Popular sites such as Prom.ua, Rozetka.ua, Lamoda.ua, Modnakasta.ua, Shafa operate according to this principle. Marketplace is an electronic market, the advantage of which is the placement of a huge number of positions, the ability to cooperate with other brands.
In such a business model, there are three parties: you, as the company implementing the project, the supplier of goods and the buyer. The two main features of a successful marketplace are conciseness, an intuitive interface, and the availability of the offered product.
Promotion
Ideally, you get organic traffic when you do not pay for advertising and the user returns to your resource on his own.
First, you need to do technical optimization on the resource, that is:
- It is ideal to study the help of search engines. There are ready-made solutions on the Internet.
- Check the site for common mistakes.
- Pick up people's requests. That is, you must find out how consumers are looking for the product they are interested in on your topic.
- Check whether the request really meets people's expectations.
Briefly, it looks like this: analyze requests - create a site structure for them - optimize internal pages by adding keywords to the necessary tags (in the title and description) - launch the project and monitor the results.
Promotion is a must do in any business. But each project is unique due to its product, target audience and other aspects that affect the way of promotion.
The more you want to sell goods through the site, the more resources (money and time) you need to use. As soon as sales begin to grow, it will be necessary to hire a sales manager, a marketer who will provide new directions for promoting the product. You can always use affiliate marketing. Then it will be possible to use each other's assets and, as a result, receive a common benefit.
Team
I don't have partners, it's just me and my team. These are my assistants, seo-optimizers and copywriters. There are about 10 of us in total. The number of employees most often depends on the ability to invest in the further development of the project. There are a lot of reviews of books and texts. Unique reviews from people who read - this is one of our biggest advantages over others.
Long term goals
We will work to make the Knigogo resource one of the leaders in the CIS market. We plan to create our own social network for those who like to read books, in which users will share selections and reviews. We want to create three projects in three languages: Ukrainian, Russian and English.
Difficulties
When we first started making project preparations, we did not see the overall result. But as soon as we started developing the site, we ran into problems that some ideas could not be implemented. Then I had to redo some things, refine the functionality. It was also a matter of time: I thought that the implementation of the project would take from 2 to 5 months, but it turned out that the development dragged on for a whole year.
At the business camp Made in Ukraine From Startup Ukraine, I received knowledge that I didn’t have enough before or I just didn’t pay enough attention to it. For example, to systematize and automate business, to manage people and to develop the product itself (how to improve it, how best to show it, what needs to be done for this). I began to ask myself more questions about the product, began to work it out more scrupulously. I worked with the team, fired those who simply didn’t follow the current standards or simply didn’t want to grow with us. As a result, this knowledge greatly influenced the current product, and what I now have.
The realities of the modern world make more and more people think about their own business. I don’t want to work for my uncle, because the level of salaries is not high, and the requirements are too high. Then you understand that it is better to use your knowledge, skills and abilities for the development of your own company. But where to start? Probably, this question is asked by every novice businessman. Someone immediately looks for business ideas, someone already paints potential profits, someone begins to analyze the market and competitors. All of this is good and has its place. But initially you need to choose a niche and type of business. Let's say that you have decided on the sphere, and what's next? Experienced entrepreneurs are advised to draw up a business plan. Of course, you can do without it, because about 3% of people manage to raise a company without clear planning. But you're willing to take the risk, relying on luck, your own genius, and a 3 percent chance? We are sure not. Therefore, any business begins with the preparation of a detailed, clear, correct business plan.
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In this article, we will talk about how to write a business plan. Let's consider each of the stages, analyze in detail where you need to start drawing up, what points you should pay the most attention to, and what can be ignored when drawing up a business plan. The advice given in this article is based on the experience of dozens of entrepreneurs who have managed to develop their companies to a certain level. Someone owns a small store, someone has a regional company, and there are those who sell throughout the country and neighboring countries. We talked to more than 30 businessmen, asking them one question: “What should be included in a business plan? What is the most important? After analyzing their answers, we tried to derive a certain formula, a kind of algorithm for drawing up a good business plan. We are sure that if you read this article to the end and take all our advice, then it will not be difficult to draw up a business plan.
A good business plan is the basis for the success of a novice businessman
So, you are about to write a business plan. A lot of ideas come into my head, but there is no clear structure. We offer you a step-by-step guide, an algorithm for writing a business plan.
- Business plan for yourself and for the investor
You need to understand that if your business requires investment, you will have to draw up a separate business plan for the investor. Here you need to focus on the issues of costs, income, profitability, payback rate, prospects for the development and operation of the business in the market. Remember that the business plan for you should be broad and describe everything to the smallest detail. The investor should describe in detail only the financial side of the matter and the company's prospects.
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- Calculate the initial investment
The first thing to start with when writing a business plan is to calculate the initial investment. In order to start a business, you will definitely have to invest a certain amount of money. As a rule, the main item of expenditure is the purchase of equipment and equipment, the creation of a website or writing software, renting a room for a long period or purchasing a large consignment of goods. During the operation of the company, you will also invest money, but they will be less than what you need to open. Calculate everything to the smallest detail, do not miss any moments. Our advice - after calculating the initial costs, add another 20% to this figure. In this way you will create a certain reserve, a certain reserve. In the process of calculations, you can make a mistake, not take into account something, forget about some points. These 20% of the reserve will help you avoid getting into a difficult and uncomfortable situation.
- Monthly costs
Next, you need to calculate the approximate monthly costs. This may include renting premises, remuneration of employees, taxes, purchase of goods. If you are engaged in an Internet business, then the monthly costs will be website support, hosting fees, etc. You need to understand whether the business will be profitable. Perhaps the monthly cost will be ten thousand dollars, and the potential income will be three times less.
- Calculate the cost of services
The next item in your business plan should be a miscalculation of the cost of the services provided. Think about what you need to run your business. These can be Internet, telephony, security services, cleaning services for office space, rental services for some equipment for meetings and presentations. It all depends on the specifics of your chosen niche.
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- Average turnover calculation
You will not be able to display a specific figure, but you can calculate the approximate turnover. To do this, analyze the activities of companies similar in profile to yours, look at their profits, at the monthly turnover of funds. This is necessary in order to roughly understand what you will work with, what amounts to operate, etc. Turnover is not yet profit, but it is also a very important value that must be taken into account when drawing up a business plan.
- Definition of income
Here, as with turnover, you will not be able to give an exact figure. It is necessary to approximately determine the maximum possible income, based on personal experience, analysis of the niche, demand, and activities of competitors. It is also necessary to determine the possible minimum income, taking into account all kinds of risks, failures, fines, penalties, etc. Based on these two figures, derive the average monthly income of your future company. We also recommend reducing the estimated earnings by 10-20%. Very often, novice businessmen overestimate their capabilities and the realities of modern business. So it turns out that the potential income is overestimated by at least 20%.
- Breakeven point calculation
Simply put, you must clearly understand at what profit your business will be profitable. At the initial stages, you should not count on big profits, if any. It is very good if in the first months of operation the business reaches the break-even point, or it works at a minimum loss.
- Calculation of the return point of investment
Each investor must understand how long it will take for him to make a profit from your company's activities. You must submit a business plan for the company until the moment when all investments are returned in full. This data is needed both for you, the organizer of the business, and for the investor, a person who is ready to invest in a developing company.
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- Miscalculations for the investor
As we said above, if your company requires additional investments, and you decide to draw up a business plan, then you need to do two of them - for yourself and for the investor. The offsets for investors will be slightly different. Focus on profits, on the prospects, on the profitability of the business, but do not forget to talk about the risks of the business. Comprehensively cover the idea, and prove that it is worthy of attention.
- Description of the business idea
The next step is a detailed description of your business idea. Someone may ask, why did we put the description of the idea as the tenth step? Shouldn't this be done at the very beginning? Quite a logical question, but I would like to note that this is a detailed description, with all the nuances, subtleties and consequences. At the very beginning, you should only briefly describe the idea, its novelty, relevance and prospects. At this stage of drawing up a business plan, you need to take into account everything, everything, everything to the last detail.
- Process description
The idea is described, now you need to move on to the process of implementing this idea. Describe all your possibilities, how you see the implementation of the idea in life, how the transition from theory to real actions will be carried out. Also try to describe every step, every moment, every action as scrupulously as possible.
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- Goals for a specific period
Set goals for yourself - both short-term from several months to six months, and long-term, from one year or more. You must understand where and in what direction to move, what tasks you face and what still needs to be implemented. If you have goals, a specific list of tasks for a certain period, then this will greatly simplify the development of the company. Then every day you will understand what is being done and why, and what the result should be in the end. If there are no goals, then the activity is likely to be ineffective.
- Definition of a global goal
Setting goals for a certain period is good, and very important. But you also need to have a global goal. When compiling a business plan, you cannot ignore this item. Any investor asked you: “Why are you going to do this business? What is your goal?”, and if you say making money, you are unlikely to get an investment. As John Rockefeller said: "If your main goal is to make money, then you will never get it." Always set yourself more global goals, and consider profit as a pleasant "side" effect of activity.
- Studying competitors
In the business plan, you need to identify the main competitors in the niche, analyze them in detail. The analysis can be carried out in a separate document. Nobody needs to underestimate the competition. First of all, they can be an excellent springboard for understanding your chosen business area. You can learn from their mistakes, analyze activities, methods and approaches to doing business. Competition is good, because it always stimulates development.
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- Determine the pros and cons of your business
Here you need to answer honestly. You should not deceive yourself, especially when drawing up a business plan. Clearly define the advantages of your chosen field of activity. But pay special attention to the cons. Understand what you have to work with, what difficulties you will face, what to sacrifice in order to bring the company to the proper level.
- What is the competitive advantage of your idea
When creating a new project, you must understand why your company is better than others. What are its advantages, where is its “trick”, due to which you are going to move most of the competitors and “bite off” a tasty market share from them. Always have an ace up your sleeve, and preferably several.
- What will you do if the business fails
And the last point of the business plan is the so-called escape routes. Of course, you must set yourself up for the fact that everything will work out, that the idea will go with a bang, that the business will be successful and profitable. But things don't always go as smoothly as planned. Write what you will do if suddenly the idea does not materialize. This is no longer part of the business plan, but a small educational program for you personally. Why is this necessary, you ask? So that you are not afraid to do what you want every day. If there is an awareness that even as a result of failure, life will not end, then everything will go much easier.
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That, perhaps, is all that we wanted to tell you. We are sure that now you know how to draw up a business plan, and this process will not cause you any difficulties. Do everything according to our advice, and then your business plan will turn out to be complete, clear, and useful. Just remember one rule - do not lie to yourself, if you write about income and expenses, then indicate real numbers, and not those that you would like. A business plan is not a report to the boss, where you need to curry favor at any cost, it is a strict document on the basis of which you will build your business, your company.
15Jul
Why I decided to write this article
Because many who ask me questions ask something that at first you shouldn’t even bother at all. There are even questions that a person may never face at all. In general, “Woe from Wit” occurs in the minds of many novice entrepreneurs, and we will “eliminate” this grief in this article. At least I'll try my best. Now let's talk about mistakes, and then I will give a step-by-step plan as I see it.
Some errors and their solutions
1. Break-even point not calculated
Many start a business without even considering how much in what period they need to sell in order to break even. This is important because many business models are cut off at this stage.
Calculating the break-even point is easy. You consider how much you incur expenses per month and then consider how much you need to sell goods or provide services per month in order to recoup these expenses. If the figure is too large and seems unrealistic to you, then it is better not to take on such a business. If you think that you can sell the right amount of goods to cover expenses or start covering expenses in a few months, then you can think about this business further.
Conclusion 1: Until you have a complete financial picture of the business in your head, you can’t borrow money or even use your savings.
2. Everything must be perfect
At the beginning of your business, you want everything to be right and beautiful: the most modern equipment is bought, the most functional website is created, the office is repaired, etc.
Striving for the best is useful, but there is one “BUT” - before you spend money, check the performance of your business model. If you are going to make an expensive website design, first make sure that your services or products are in demand at all.
Or, if you're opening a cafe, before making expensive renovations, try to start selling in the premises that are available with minimal investment. If sales go on and a place in this area of the city will bring at least some profit, then you can expand or make a cool renovation.
Conclusion 2: Don't invest a lot of money until you're sure people want the product. And you don’t need to bring everything to perfection, thereby delaying the start. Start with what you have and gradually develop and improve.
3. Not understanding your future business or simply no love
I personally think that a business should at least like it. For example, I love each of my business projects, and if I didn’t love them, they wouldn’t turn out to be profitable.
Some start-up entrepreneurs write me questions like “What to sell”, “What services are profitable to provide”, “What kind of business is profitable to do”, etc. I answer everyone: "Open your own bank." And no one likes my answer, although it answers all these questions. Each entrepreneur has a different life situation, different interests and different knowledge. If one likes selling toys and the other likes selling men's suits, then they won't be able to switch businesses and be as successful. This is because they do not understand the model itself and simply do not feel interested.
Conclusion 3: You can't build a business on an idea just because you just know it's profitable and you're not interested in it. Business needs to be understood, loved and “be in the know”. For example, I could not open a massage parlor and lead the business to success. Not because I don't have enough money, but because I don't understand anything in this business.
How to start your own business - 10 steps from scratch
To begin with, I want to say that below I will give 2 plans on how to start your business: complete and simplified. Let's start with the complete.
Step 1. Business Idea
Of course, to start a business, you need to know what to start. I have always said, I say and I will say that an entrepreneur must have an idea. If you can't even come up with an idea, then what kind of business are you talking about. It is not necessary to be an innovator and come up with something unimaginable. You can take an already working idea, look around, find flaws in it, or simply improve it the way YOU see it and it will be a different business. It is easier to enter a formed market than to form it yourself. And the idea should not be global, you can start a micro business or.
In order to come up with or find a business idea, read the following articles and after reading you will 100% decide on the idea:
After the articles are read, the ideas are thought up, you can proceed to the next step.
Step 2. Market Analysis
After choosing a business idea, you need to analyze the market, find out if people really need your product. Evaluate the competition, identify the positive and negative sides of competitors, find in yourself what will make you different from your competitors. Compare prices, quality of service, assortment (if it is a commodity business) and look to the maximum for what you can be better at. It is necessary. Why? Read!
Once you have assessed the supply and demand and realized that you can compete with existing companies, you can move on.
Step 3. Business Planning
Step 5. Registering your business
This step cannot be missed, because the business must be registered. You can use LLC or IP. It all depends on your activity. This article will help you:
Once your business is set up, you can move on to the next step.
Step 6. Taxes and reporting
I indicated this step right away, because you must initially decide on which taxation system you will work with. This must be done immediately, because the amount of taxes and how they are paid depend on it. To do this, read the following articles:
And also read other articles of the rubric, because there you will always find up-to-date and complete information about tax and accounting. You can also ask your question and get an answer from a specialist.
Step 7. Quick idea testing
Someone will say that you can test without registering a business. And you are right! It is possible and so, but it was not in vain that I wrote at the very beginning that there would be 2 scenarios for the development of events, and in the second I will talk about it. Now let's move on to testing itself.
Initially, you need exactly quick testing - “testing in battle”. With your own money, test the idea, give minimal advertising, make the smallest possible product and try to sell it. Study demand in practice so to speak. You have to look into your plan, estimate what you need at the minimum in order to get started and start right away. Why is this being done. At the very beginning, I wrote about one of the mistakes of novice entrepreneurs, which consists in delaying the start, in constant improvements, etc. You don’t need to bring it to perfection, you need to start as soon as possible in order to test the idea in action, get the first sales and be inspired to continue development.
If the start does not give the first sales, then you need to revise the plan, idea and look for errors. A quick start is also done so that in case of failure you spend less time, effort and money. Agree, it would be more annoying to prepare for a year, and then fail? It is less offensive to realize your mistakes right away, while you still have little time to do. So you can make adjustments along the way and everything will start to work out!
To test ideas and your business can help you. It is more for testing ideas on the Internet, but it is also suitable for the real sector (offline).
Step 8. Business Development
After the tests have been carried out, the plan has been adjusted and sales have started slowly, you can develop your business and refine everything that you wrote in the plan to perfection. Now you can improve the site, increase warehouses or office, expand staff, etc. When your idea and business model has shown its performance, it is easier for you to set more global goals. Moreover, you have already received the first money from the first orders or sales and can reinvest them in development.
If there is not enough money, then here you can already resort to loans and borrowings, because business brings money and you can borrow with a clear conscience for its development. If you don't need much money, even a credit card might work. In I told how you can use credit card money for your business without interest.
Step 9. Active promotion
This step could be attributed to development, but I took it out separately. After you have wider warehouses, more powerful equipment and site, more employees, etc., you need to make it all work. This requires aggressive advertising to the maximum. You have to use a lot of promotional opportunities. Look for clients on the Internet, do offline advertising, do direct sales, etc. The more advertising tools you use, the better the result. But be sure to record the results and filter out ineffective advertising tools so as not to waste your budgets.
Step 10 Scaling
Your business is doing well, making money, you are constantly developing, everything is great! But there are also adjacent areas or neighboring cities. If your business model is successful in your city, then you can make representative offices in other cities. If there is no desire or opportunity to go to neighboring cities, then you can simply capture an adjacent direction, if there is one at all.
For example, if you sell household appliances, you can simultaneously open a repair service and provide paid repair services. If your client's equipment is beyond repair, you can always offer him to buy something from your store in exchange. In general, look at your business and I am sure that you will find something to cling to.
What else can you pay attention to
During the launch of a business, there are several parameters that allow you to evaluate how effective your business is at the start, take them seriously:
If the net income of your business is above zero, excluding equipment costs and taxes, then your business will survive because it generates some money. If it is below zero, it means that your business is burning money, and it will not have enough loans and investments;
If you planned sales for 200,000, and sell for 50,000, then this is an occasion to seriously adjust your work and, possibly, the plan itself;
You should be comfortable. Business is hard. If you, too, are constantly having a hard time, then it will be difficult to cope with the tasks of the business. Give yourself enough comfort so that you don't feel left out because of your own business.
How to start and open your own business in a simplified way
As promised, I will give another simplified diagram of how to start your own business. Because I have already written all the points above, so I will refer to them here so as not to repeat myself.
I myself have used this scheme more than once, because before I started very small projects in which a lot could be missed. So the schema looks like this:
- Idea (it should always be);
- Easy planning, you can not paint, but fit the main points on a sheet of notebook. It is done in order to draw a model;
- Quick idea test. Perhaps even without investments and search for money. Or very little money will be required and they will simply be in your savings;
- Development and active promotion. After the first orders are, you can start active promotion and bring everything to mind;
- Business registration and scaling.
As you can see, I missed registration at the very end, because some business projects can be implemented without registration, because during the test you don’t get so much money to immediately run for them to report to the tax office. But if the business model has shown its performance and, after active promotion, it is growing, then the design should be instant.
But you still can’t do without registration even at the first stages if you need a retail space, an office or work with companies under contracts, because for this you need at least an individual entrepreneur.
Conclusion
In this article, I told you how to start your own business, talked about the mistakes that beginners often make and I made, and now you know what to do before starting your own business. Read my site, subscribe to it, and try to start doing your own thing. We will not leave anyone on the site without help. Thank you for your attention!
Sincerely, Schmidt Nikolai
21. General conditions for creating your own business. Some principles for starting your own business.
Creating your own business in Russia is carried out in accordance with the current civil legislation, federal laws on individual organizational and legal forms of business participants and regulations governing the entire process of creating and functioning of business organizations. Creating your own business in one or another organizational and legal form involves the following prerequisites: 1) the availability of property for the formation of initial capital; 2) the availability of a certain amount of financial resources necessary to form the minimum amount of the authorized (share) capital; 3) the availability of non-residential premises necessary to accommodate the office of the future organization and the implementation of the intended activities, or the availability of opportunities for renting non-residential premises; 4) a preliminary study of the proposed market in which the entrepreneur will offer the result of entrepreneurial activity for sale; 5) formation of a team of qualified founders (partners) of their own business, who are well aware of the technology for carrying out certain types of activities, accounting and tax accounting, etc.
It is important for the entrepreneur himself to objectively answer the following question: do I have everything necessary to run my own business? Since the entrepreneur will be the most important worker in his company, he needs to give an objective assessment of his positive and negative features. Here are a few questions he should ask himself: Can I start my own business? How can I get along with people? How firm am I in making decisions? Do I have enough physical strength and emotional potential to successfully conduct business? How well do I plan and organize my affairs?
You also need to answer the question: what type of business should you choose? Usually the best type of business is the one in which the future entrepreneur is most interested, as well as the one for which there are already certain skills. You can consult with business support services about the potential of various types of businesses in your area. Matching his qualifications to local market opportunities will increase the chances of success
The future entrepreneur must be competent in the field in which he intends to create his own business.
An entrepreneur must be able to calculate the expected consequences of risk, keep business secrets, have all the information about the activities of his own enterprise, consumers of products, customers, suppliers, competitors in particular. A positive business environment has not yet been formed in Russia, bureaucracy and corruption are thriving, and an aggressive external environment is operating, so a future entrepreneur needs to be able to anticipate decisions of federal and local authorities that often infringe on the rights of entrepreneurs, learn how to protect not only their property and assets from the encroachment of aggressive strength, but also your life.
Principles. Having decided to create his own business, the future entrepreneur must answer a number of questions:
For whom will his company work, who are his future consumers (buyers), is there a place for him under the “sun of the market”. Therefore, the process of making an entrepreneurial decision should begin with the formulation of an idea - for whom to produce products, goods, perform work, to whom to provide services (depending on the type and type of market);
What to produce, what specific goods, what specific services to perform, and then determine whether it has the conditions and factors for its activities. At the same time, it should be remembered that entrepreneurs have the right to engage only in legal and (or) licensed activities;
How to produce products (goods), perform work, provide services, on what technical and technological basis, with what quality characteristics, at what costs, with what level of competitiveness. Therefore, it is very important to know what is the relationship in the market between the demand and supply of the goods that the entrepreneur is going to offer (in any field of activity - production, trade and intermediary, financial and credit) in the market, and not in the market in general, but in a certain territorial market . If the demand is large and stable, then it makes sense to create your own business and produce these goods.
A future entrepreneur, when planning to create his own business, should be guided by the most important market principles, among which are the following.
First, you need to find a need and satisfy it, since entrepreneurial activity is aimed at satisfying the needs of others.
Secondly, goods should be produced at lower costs (cost), otherwise the market may not recognize these goods, and the entrepreneur will not be able to sell (sell) them and get the planned profit.
Thirdly, an entrepreneur, setting the price for manufactured goods, must take into account the behavior of competitors, the consumer demand of consumers, the level of market saturation. The problem of pricing plays a significant role in the mechanism of creating and functioning of one's own business, the general algorithm of which can be expressed in the following brief scheme: entrepreneurial idea -> goals of the entrepreneur -> development of an entrepreneurial project -> its implementation in the form of creating one's own business -> functioning of the organization (the first stage of life cycle).
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