Creating and maintaining your own business is not just a means of achieving economic well-being, it is a method to pursue lifelong dreams and have personal gratification. The path is certainly not easy, but the greatest entrepreneurs in history have had to overcome the same stages. There is no rain on this: having huge financial sources facilitates the project, but it is possible to build a successful business from scratch with a mix of ingenuity, perseverance and determination, even without unlimited resources. If you are ready to work hard and learn from your mistakes, you will have the unique chance to found a successful company that you can proudly call your own.
Steps
Part 1 of 3: Getting started
Step 1. Hold on to your current job
With a reliable source of income, you save yourself the worry of not knowing how you will pay your mortgage and you won't have to face mountains of possible debt. However, you will have to work harder. In theory, as a new project begins to take hold, you can gradually transition from a full-time job at the company where you are currently an employee to a consultant or part-time job. After that, you can move on to running your business full-time. While this process often doesn't go smoothly in real life, it's almost always safer than giving up everything to chase a dream that hasn't materialized yet.
- This first step is especially important if you have a dependent family. Don't jeopardize the future of your wife and your papers by giving up your first source of income to pursue a personal dream. While it is more difficult to balance this external project with daily work and family life, it is much safer.
- If you think you want to start your business in the near future, avoid signing an employment contract with a clause that prevents you from growing other sources of income. Don't be afraid to carefully review the agreement with a lawyer.
Step 2. Create a business plan
How will you earn? If you can't answer this question, you shouldn't go out on your own. The purpose of a profit-making institution is to have income; you must therefore make a detailed plan on how to do it before embarking on this adventure. Try to answer the following questions (they are fundamental, although not exhaustive):
- How much will it cost you to provide your product or customer service?
- How much will the customer have to pay for your product or service?
- How will you increase the volume of business?
- How does your business have more advantageous offers than the competition?
- What types of people should you hire? Can the work be done without them?
Step 3. Do a competitive analysis
What are your competitors? What price do they charge for the same product or service that you would also offer? Realistically, can you provide this good or service at a higher quality level or at a lower price? If so, congratulations, it looks like your idea is valid! Do a research on the slice of the market that interests you, but also on the companies that have found (or not) success within it.
Not all industries have the same degree of ease of access. IBISWorld, an organization that deals with business analysis, recommends certain fields to aspiring small business owners due to the low cost of access and great growth potential. Here are some of them: human resources and administration of benefits for employees of a company, street vending, online auctions and e-commerce, ethnic supermarkets, production of wine or other spirits, internet advertising and so on
Step 4. Do your research and test your ideas
Preparation and planning are vital before finalizing any business initiative. If you can, look for opportunities to take practice tests. For example, if you are thinking of opening a restaurant, first try cooking for a parish or school fundraiser. See if you can handle the hectic atmosphere of a busy kitchen and judge if your food gets a good reception. You could also try conducting a survey of prospects to see if they would be targeting your hypothetical business.
Business plans are evolving documents. If your research or test results contradict your current plans, don't be afraid to change your business plan or even make one from scratch. This change can be frustrating, but it's a lot smarter than risking bankruptcy because you've based the business on an idea that won't get off the ground
Step 5. Find opportunities to acquire skills without breaking the bank
If you have an idea for a business, but you lack the right skills or training to implement it, try to acquire the skills you need as cheaply as possible. Try to make arrangements with institutions that offer courses or companies that prepare you in exchange for your provision of services. Take part in an internship or paid part-time internship. Look for opportunities to acquire practical know-how from talented friends, family and acquaintances. In the meantime, you should maintain a secure source of income - if that means extending the length of the training period a little more, so be it.
If you have to go back to school, apply for any scholarship and financial support package you may be eligible for. Preparing the documents can take some time, but the results (in terms of money saved) are worth it
Step 6. Make the most of your current assets
When starting a business from scratch, you should use the resources you already have at your disposal and make the most of them. For example, use your small car as a company car. Turn the garage into a workshop. Some of today's biggest businesses (including the world-famous Apple and Facebook) have started in modest places: garages, cellars and university dorms, for example. Don't be afraid to make the most of what you have!
If you have space at home, use it to take care of your business at first, don't rent an office. This way, you will save yourself money that you would otherwise have paid for the lease. When it comes to taxes, find out about the deductible expenses for those with a home office
Step 7. Streamline your hiring schedules
It is expensive to pay for staff, especially if you want to hire highly trained professionals. Initially, make sure that the staff is as small as possible to minimize expenses. U. S. Small Business Administration (SBA) recommends not spending more than 50% of profits to pay salaries to employees. If you can handle all the work required by the business without exhausting yourself and giving up having a life, go it alone at first. Otherwise, hire some absolutely necessary professionals who do their job safely and seriously. As the company grows, you will find it natural to call other people.
Keep one thing in mind: Nowadays, depending on where you live and the type of people you hire, they may require you to pay employee health insurance in addition to your basic salary
Step 8. Get a loan from friends and / or family
When trying to build a business from scratch, your creativity and hard work can make up for the need for a substantial amount of money. However, it happens to come to the point where it is just not possible to continue without a minimum investment. For example, maybe equipment has broken and you need to change a certain expensive piece that you don't own and can't borrow. Many small businesses manage to make up for it with the help of a generous relative or friend. Before agreeing to a loan, however, be sure to specify the terms of the agreement in writing: how soon will you repay the money, how much the payments will be, etc.
Having a clause that specifies that you will have extra time to repay the loan (or that you will not have to repay it at all) in the event of a business failure is a particularly good idea
Step 9. Find out about provincial, regional or national concessions for new entrepreneurs
There are programs that offer loans or financing to small businesses so that they can start operating. In Italy, you can contact a specific provincial, regional or national office that manages these programs. There are different plans depending on various needs. To be eligible, you need to meet a number of requirements and prove that your money will be well spent. Each call has its own peculiarities, but, in general, your idea must respect the following:
- Your business is for profit.
- Your business should be small (the notice indicates the exact characteristics that allow you to calculate the size of the company).
- Your company operates in Italy, without crossing national borders.
- It has enough equity (essentially, it should have some value).
- It falls within the categories provided for in the call (there are specific funds for young and female entrepreneurship, etc.).
- You need to be able to prove that you need a loan or contribution.
- You need to be able to prove that you will make good use of the money.
- You must not default on any loans that the same institution has granted you in the past.
Step 10. Get the word out
If no one knows they exist, even the best-managed businesses in the world go bankrupt. Take advantage of advertising to cope with lack of funds - hard work will take you far. If you can't afford to have advertisements on television or rent space for a billboard, try printing flyers at home and hand them out over the weekend. Advertise door-to-door so that your business is known in the neighborhood. Create the sign to hang in front of the shop or company. Wear a cute costume and hold a billboard on a busy street. Any means that allow you to spread the word about your new business is fine, even those that you find shoddy or degrading - try everything you can. If your budget is tight, put your ego aside for a moment in order to implement your first marketing tactics.
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Nowadays, you also have the ability to reach your customers online through a successful social networking campaign. These sites are an effective tool for small businesses, so they can advertise themselves on the web. Open an account on Facebook, Twitter and other social networks, and encourage your customers to add you to their virtual circles (perhaps, offer small incentives to those who do), so you can notify them of offers and promotions.
Either way, keep in mind that web customers are used to being constantly bombarded with advertisements. Try to make your online content genuinely fun or impactful: you will be more appreciated than those who use social networks solely as an advertising platform
Part 2 of 3: Think Like an Entrepreneur
Step 1. Cultivate passion and determination
Taking on an initiative of this type can be quite difficult, especially at the beginning, when you still have to work out the different aspects and understand the flaws of your new business model. If you love this field, if it is a sector that you are passionate about, the work becomes much easier. If your passion for this profession is so great that you feel "guilty" when you collect money, rest assured that you have chosen the perfect job for you. When you have a genuine passion for your work, it comes naturally to always have a strong determination, because you will not be satisfied with yourself until you have given your all.
Identify fields that you find exciting and develop skills in these areas through studies, training courses and the practical application of knowledge and skills. Find ways to make money from your passion, don't force yourself to turn the daily work you do listlessly to pay your bills into the object of your passion
Step 2. Prepare to reinvent yourself
When undertaking such a project, it is possible to realize that it is necessary to make drastic changes to one's habits, and perhaps even to one's own well-established behaviors to keep up with the new needs. If you are the owner of a start-up, flexibility is essential to lead the way, because it may be essential to reinvent yourself more than once in order to find the right orientation and satisfy the niche you have chosen. Remember, starting a business takes a lot of time and focus - change your attitude to make sure you can give your new job the time and attention it requires.
For example, aren't you a morning person? Do you tend to get tired right away? If your restaurant's grand opening is scheduled for a week, you can't afford these habits anymore. You need to change them today: set the alarm earlier than usual and have a huge cup of coffee
Step 3. Take advantage of unusual funding sources
And so you don't have an angel investor or a trust fund. This does not necessarily imply that it is impossible to raise money for the startup of your dreams! Today, for people who have big ideas (but are broke), it is easier to get the attention of those who have the funds (but not big ideas). For example, consider advertising your project on a cloud-sourcing site like Kickstarter. Web pages of this type allow you to present your initiative online on a large scale. If people who see it think it's good and your business plan is solid, they'll have the ability to step in to help you partially with startup costs.
Another way to get funding for your small business is to enter a startup contest. These awards, often offered by prestigious business schools or initiatives designed to support new entrepreneurs, allow young and ambitious people to sell their ideas to wealthy venture capitalists. Usually, thanks to these competitions, the winners get initial funding to start their business
Step 4. Put the customer first
In addition to setting yourself apart from the established competition in the market, a surefire way to start a new business is simply to be friendlier and more personable than anyone else. People adores small businesses that convey a feeling of familiarity and hospitality. Make customer satisfaction your first goal by offering unrivaled quality and service.
- Try to understand what the customer wants. Find the best way to satisfy his needs. The focal point of any business is customer satisfaction (the secondary focus should then be on quality, the relationship between cost and profit, outward appearance, function of the product or service, and so on).
- Remember that the customer is always right, even when they behave in an arrogant or illogical manner. This does not mean that you have to give in to ridiculous requests; instead, you should make every customer feel respected.
Step 5. Offer a higher value than the competition
Money talks. For most average consumers, money is an essential factor in making a purchase decision. This variable influences them in their choice of products and services they are willing to pay for. Customers want to receive valid goods or services for their money, and they hate the idea of being scammed. Take advantage of it! Offer a more attractive offer than your competitors: doing the same job at a lower price will certainly give you a distinct advantage. Either way, make sure your profits are protected when establishing your business's pricing structure - you must always be able to pay the rent.
Keep your promises, and never be tempted to use misleading advertisements, as this will ruin your reputation and that of your company in an instant
Step 6. Let your creativity meet the need for large sums of money
Bring the business back to its roots. In the early days, try to make sure your initiative is as simple as possible. Minimize the need for huge funding, remember that it's hard to get the money you need in the beginning. In the meantime, considerably increase your sales efforts by developing and implementing creative ideas and concepts that you have come up with yourself. Always think big. A great idea can be worth thousands of dollars.
Step 7. Try to be cautious about contracts and partnerships
Be sure to carefully consider any business relationship or cooperation you engage in. Hire or associate only with people you trust blindly. If you decide to make an agreement with a trusted individual or company, you must be sure that the terms of the contract are put in writing before formalizing the relationship.
- It would be very wise to hire a lawyer to help you write these contracts. The legal fees can be high, but a well-written agreement can save you multiple times during the initial investment and ahead of the long term by preventing your partners from taking advantage of you.
- When talking to your collaborators, be careful about your use of the term partner, since, depending on the legal system of the country in which you do business, this could affect you at a later time (your word could supplant a written contract), especially if you start making a profit.
Step 8. Cultivate your ability to negotiate
When all else fails, roll the price, trade and barter. The ability to make safe and well-packaged deals is one of the main traits of a true entrepreneur. It is an important skill to develop, as it strengthens your innate know-how to do business and improves your self-esteem. Whether you need to hire a new employee, buy equipment, or work out a business cooperation, don't be afraid to negotiate and make offers that you think are beneficial to you. The worst that could happen to you is hearing you say no. Take some risks (while protecting your legal rights in the process) and you will be pleasantly surprised with the result.
Try taking a trip to a flea market in your city; in these places, you are usually allowed (and encouraged) to negotiate and pull prices with sellers. This way, you will get great practice without having too high a stake
Part 3 of 3: Living in a Safe and Balanced Way
Step 1. Count on your relatives, friends and loved ones
You don't have to go on this journey alone. While not doing business with the people you love (which can be a smart decision), you can lean on them early on (and even later, in difficult times). Family and friends can offer you powerful emotional support on your entrepreneurial journey. When you're stressed out and can't take it anymore, this support can make the difference when faced with the choice between continuing to strive for success and throwing in the towel.
- Talk to your family members and make sure they agree with the overall business plan, because, at times, you may find yourself absorbing your family's resources, time, money, health and courage. It is absolutely right that they know what is going to happen.
- Once you have taken over your entrepreneurial life, you may be tempted to become bossy even at home. Don't give in to this change. Keep business concerns separate from family concerns; for example, make it a rule not to discuss business at dinner.
Step 2. Know your rights
Having a solid understanding of business law (especially regarding the rules on contracts, taxes and legal requirements for running a small business) is a core skill for a future entrepreneur. If possible, it would be best to familiarize yourself with these branches of the law before starting the business. If you are deeply confident that you have the right skills, you can save yourself some money that you would otherwise have had to spend on getting legal guidance. You will also save yourself from bad headaches when trying to decrypt complex business and tax-related documents.
Instead, if you're not familiar with the law, ask for help. The money spent on a lawyer can save the initial investment many times over; for example, it will prevent you from signing contracts that are harmful to your business
Step 3. Take care of your physical, mental and emotional state
If you lose your health, you risk losing everything. A healthy body, mind and soul are key to being successful as an entrepreneur. Especially in the beginning, the working hours will be exhausting, and the commitment will be particularly hard. However, you should still always set aside a reasonable amount of time for exercise, sleep, and relaxation. These aspects of your life deserve all your attention, because they allow you to stay healthy and not lose your mind. Remember, if you don't take care of yourself, you can't run the business.
Try to take out insurance that allows you to protect your business, especially if the job involves health risks. A person who has just opened a business cannot afford to lose money in the face of this possibility
Step 4. Find the right compromise between work and private life
Do everything in moderation. Live by trying to base yourself on a certain balance, even if you take the initiative without a penny in the bank. Losing your perspective on life will make you poorer in the long run (emotionally, not necessarily financially), so this risk is never worth it. Never spend a sleepless night. Don't work until exhaustion. Always make time for your family, your hobbies and, of course, yourself. Your life should be a source of joy and passion, not just an opportunity to work till you drop.
Also, you should never rely on drugs to boost your performance or replace your regular healthy eating and exercise programs. In the long run, this will destroy you, and lead you to make irrational and emotional decisions. This is never good in business, but also in private life
Advice
- If you can, try to avoid borrowing money. The risks are many. Try to rely on your own strength. If you don't have the funds, don't buy, and don't pay large operating expenses when you can't afford it, at any stage of the project.
- In the beginning, try to avoid signing long-term agreements, such as permanent lease or hiring agreements. Since you're not sure how things will evolve in the first year of practice (testing stage), making bigger commitments of this nature is not wise at all. Don't just do it.
- Don't lightly share your business ideas with others. Have they ever stolen a great business idea from you? If this has happened to you, you probably won't make the same mistake again without thinking about it. A betrayal could completely destroy your safety. In this case, prevention is better than cure.
- Talk to experienced business owners for tips on how to start from scratch.
