If you want to start your own business, you are reading the right article. Being an entrepreneur takes a lot of risk, but it offers great rewards. It is certainly a very stressful commitment, but extremely rewarding and guarantees a strong sense of accomplishment. It's not as difficult as it sounds; as long as you manage to be thorough, patient and, of course, have good ideas, you will be your own entrepreneur before you even think!
Steps
Part 1 of 6: Assessing Your Personality
Step 1. Think about your priorities
Ask yourself a few questions about what you want from life, but also from your business. How do you think you are achieving your life goals? What is important to you? What are you willing to sacrifice?
Consider what you need to do to meet those priorities and achieve your goals. Do you need a certain amount of money? Some free time to spend with friends and family?
Step 2. Determine if you have the right personality to be an entrepreneur
The goal of many people is to become entrepreneurs of themselves, but some individuals are better suited to this lifestyle than others. Knowing your reactions to various situations helps you achieve your goals.
- Do not have problems taking on numerous responsibilities? Entrepreneurs often have no backing and are responsible for the success or failure of their business.
- Do you enjoy interacting with people? Almost all entrepreneurs have a lot of work to do in customer service, especially in the beginning. If you don't know how to relate effectively to people, you may have a hard time getting your business off the ground.
- Can you accept uncertain situations and even failure? Even the most successful entrepreneurs - for example, Bill Gates, Steve Jobs and Richard Branson - have failed several times before finding the right business formula.
- Are you good at solving problems and finding creative solutions? Entrepreneurs of all levels face problems that need creative solutions. Tolerating frustration and knowing how to analyze obstacles and difficulties are other skills you will need to be an entrepreneur.
- Meet with other entrepreneurs to see if you are able to consider yourself as such.
Step 3. List your strengths
Be honest with yourself when considering the strongest and weakest aspects of your personality. When talking to potential investors or selling to clients, you need to have a clear idea of what your strengths are so you can pass them on to others.
Step 4. Define your success
The energy and resolve will help you overcome the many obstacles you will face when starting your business. Be idealistic enough to believe in yourself, but also pragmatic enough to examine the reality of the situation.
Part 2 of 6: Laying the Foundation
Step 1. Come up with a sensational idea
Most businesses start with compelling ideas - whether it's a service to provide to people, a product that would make life easier, or something that combines both. The business world is full of great ideas (although many of them are not that phenomenal). What makes the difference is being able to find a niche to occupy.
- You don't necessarily have to do something groundbreaking or new to be successful. You just need to excel over the competition.
- You are more likely to be successful if you do something you know and are passionate about. For example, by devoting yourself to computer programming, you could make your business quite attractive in sales, but if you don't put passion into what you do you will not have the energy to continue along your path.
- If you have trouble finding an idea, make a list of the things that characterize your target audience, such as the stores where people shop and what they buy. Narrow the list down to about three items, keeping in mind the costs, production times, and distribution of a particular item or service. Find out which is the simplest and most realistic product to offer.
Step 2. Do a market research
The key to starting a business is knowing if there is demand for the product or service you intend to offer. Is what you are able to propose something that could be improved in the current market? Does it represent a need whose supply is not sufficient to cover the demand?
- There are a variety of resources in many business fields that provide free information. Do an online research on your industry and trade associations related to your target market and read both the articles and press releases they publish. You can also get valuable insights into demographic trends by leveraging census data.
- On its website, the Ministry for Economic Development offers a page dedicated to small and medium-sized enterprises, with excellent suggestions on how to promote sustainable growth, foster contacts with the world of research and universities, and how to open up to flows international human and financial capital. It is a valuable and reliable source of information for anyone wishing to start a business.
Step 3. Talk to potential customers and / or consumers
You may have the most amazing product or service in the world, but if no one intends to buy it, your business is in danger of failure. By talking to others, you can also prepare yourself to convince potential investors.
Ask for honest feedback when talking to potential customers. Your friends may try to be nice to you when you come up with your idea, but critical feedback that highlights weaknesses or problems will be much more helpful, even if not always easy to hear
Step 4. Determine the risks you can take
In the world of entrepreneurship, the game that is created is always between risks and profits, but often the risk is greater (especially at the beginning). Evaluate all your financial resources and try to figure out how much money (time and energy) you actually have to invest.
In addition to considering savings, credits, and other resources to make capital out of, consider how long you can stay without generating profits. Small businesses are rarely profitable immediately. Can you afford not to have a source of income for maybe several months or even a few years?
Step 5. Understand the concept of "acceptable loss"
According to Forbes, "acceptable loss" is the idea whereby it is possible to determine the likely negative aspects of a business and, therefore, invest only what you can actually afford to lose if the business trend turns out to be. different than expected. This is a strategy that limits the extent of failure if the business fails.
Step 6. Commit to following a goal, not a plan
One of the most important things to become an entrepreneur is flexibility. You can't control everything about the business, so adaptation is vital to survive. If you are too tied to a plan, there is a risk that you will harm yourself.
Part 3 of 6: Writing Your Business Plan
Step 1. Create a business plan
This is a plan that typically describes how a company should operate (what are its services? What does it provide?), Offers a market analysis, includes a detailed description of the proposed product or service and prepares forecasts on the financial future of the company for the next 3-5 years. If you're hoping to attract investors, they'll want to see a thorough and accurate business plan.
Step 2. Develop a description of your company
This should be a brief summary of what your business produces, the type of need it fulfills, how and why it is superior to other initiatives of this kind. Be concrete and precise, but concise. Think of it as an "elevator pitch" (a speech used to capture the attention of various interlocutors about a project or business idea).
Step 3. Present your market analysis
If you have done a good market research, you will be able to describe in detail the industrial sector or business field you have chosen, your target clientele and the market share you plan to cover with your business. This section should be as detailed as possible, because it needs to convince investors that you know your way around.
One of the most common mistakes among budding entrepreneurs consists in failing to identify the target audience and trying to reach out to too large an audience. While you may be tempted to think that everyone will need and love the product or service you offer, the reality is very different. It's best to start small
Step 4. Include a section on organization and management
Even if your company is in fact made up only of your figure, use this part to give information about who manages it, what their responsibilities are and how you intend to structure your business as it expands. Is there a board of directors? How do your employees organize themselves? Investors want to make sure you have thought about your company's future.
Step 5. Provide information about the service or product you offer
This is the place to specifically analyze what your company can offer to customers. What are you going to provide? What needs do you intend to cover? What competitive advantages does it offer over similar products?
- Provide data from the perspective of prospects. If you have already consulted some people who belong to this customer group, you should have a clearer idea of what their opinions are about your services or products.
- If you intend to sell a patented item or service, please include any information relating to the patent or other ways in which you intend to protect intellectual property. No investor will be inclined to put their money into a business only to see the product outperform the competition.
Step 6. Describe your marketing and sales strategies
This section focuses on how your business plans to attract and retain customers. How do you plan to reach your target consumers? How do you plan to use marketing strategies to grow your business? Do you already have potential customers lined up at your door or will you have to start completely from scratch?
Step 7. Highlight the funding request
If you are looking for investors or a bank loan, you need to indicate exactly what you need to get your business started. You need to include the full amount to invest, how much money you need from the lenders and (most importantly) how you plan to use these funds.
Investors like the details. A loan application that just says "I need a million dollars" will be far less compelling than one that cuts costs and expenses
Step 8. Make your financial projections stand out
If you're just starting out, you won't have a lot of past year financial data to work on. You need to enter any collateral in your possession that can secure the loan, but only list what you can truly afford to lose.
- You should also include information on prospective financials. Apparently it is just a matter of making calculations and estimates, but it is necessary to introduce the data coming from the market analyzes. How does the competition operate? How are their expenses and cash flows? You can use this information to make projections about your company.
- Make sure your financial projections match the figures in your funding application. If your projections indicate that 500,000 euros will be needed, but you are asking only 200,000 euros, investors may think that you have not been able to make the right calculations.
Step 9. Include some appendices if needed
If you have recently started your business, you should include additional documentation to increase your credibility. It would be helpful to include materials such as reference letters that can indicate your qualifications and skills or even credit information.
Step 10. Write an "executive summary"
In reality, it should be introduced at the beginning of the business plan, but you will have to wait before drafting it until you have completed the whole plan. The executive summary is a "photograph" of the company as a whole: its objectives, its mission, the presentation of the owner and the company. As a new entrepreneur, you should highlight your background and experience in relation to the product or service you have chosen to offer. It must not be longer than one page.
Part 4 of 6: Preparing the Speech ("Elevator Pitch")
Step 1. Develop the so-called "elevator pitch"
This type of speech is called an "elevator pitch" because it should be concise and provide the listener with essential information so that they are aware of who you are, what your business is about and why they should be interested - all in the time that it takes an elevator to go up.
- First, consider the problem or needs your business will face. It is usually expressed through a question, which is why many TV commercials often start with questions like: "Did you know that ….?" or "Are you tired of …?" or "Have you ever had a problem while …?".
- Second, consider how your product or service can solve the problem you have identified. You should express yourself in no more than 1 or 2 sentences, trying to be as detailed as possible without using too technical terminology.
- Third, describe the main benefit offered by the product or service you offer. This could be a description of how to accomplish something for the customer or beat the competition.
- Finally, consider what is needed for investors to support your business. This part can be longer, because it has to express your basic needs, your experience and your credentials, but also why lenders can trust your success.
- Try to be concise! Many experts suggest that the speech should not last more than a minute. Remember that attention spans are short. Get the audience's interest quickly, otherwise you run the risk of not catching their attention at all.
Step 2. Create a PowerPoint document that summarizes your business plan
It should summarize all the information in it. Try to explain it, without haste, in about 15 minutes.
Step 3. Practice delivering the speech
You will probably be nervous at the thought of exposing your business at first, so try to loosen up a bit. Try it out by discussing your business plan with friends and colleagues.
Step 4. Ask for an opinion
Chances are you will make some mistakes at first. Ask people who listen to you for an honest opinion. Have you expressed your ideas clearly? Did you seem nervous? Did you speak too fast or too slowly? Which point should you explain better and which steps could you eliminate?
Part 5 of 6: Passing on Your Ideas to Others
Step 1. Form a network of contacts
Participate in commercial events and events dedicated to your business sector, talking to exhibitors. Join professional associations. Build a solid network of social contacts with other entrepreneurs, both online (using social networks and professional sites like Linkedin) and in person.
- Attending social events, such as trade shows organized by the chamber of commerce, is a great way to connect with other entrepreneurs in your area. This knowledge can provide you with support, ideas and opportunities.
- Be generous with others. Do not consider contact with other entrepreneurs only in your favor, considering only what they can give you. If you offer them advice, ideas and support, they will be more likely to reciprocate your help. Nobody likes to feel exploited.
- Pay attention to other people's ideas. Even if you are in direct competition with someone, you will probably always have something to learn from them. You can learn from the mistakes of others as well as from their successes, but only if you know how to listen to them.
Step 2. Develop a strong brand
It is necessary to effectively communicate to others what your business deals with both in person and using the web; this means that your brand must have a strong presence. If your business cards look professional, your website and social network profiles (Twitter, Facebook, Pinterest, YouTube, etc.) provide information about your business in a consistent and inviting way, you'll have additional tools to prove yours is a serious undertaking. Also, all of this will give others the opportunity to get information and learn more about you.
- Look at the websites and brands of some successful companies. See what they have in common, what they do interesting, and try to match that formula with your brand. However, don't infringe on someone else's intellectual property by stealing or copying other people's ideas.
- Consider opening a professional blog, especially if your business is focused on services. It can be a great way to demonstrate your experience and ideas, but also to help investors and clients get to know you.
Step 3. Ask your contacts to recommend you to investors
You will probably know someone who, in turn, is friends with people who are looking for something to invest in. Many investors do not consider "blindly submitted" documents (such as business plans sent uninvited), but are happy to hear a speech from an entrepreneur recommended by people they already know and trust.
Remember to return this favor whenever you can. People are more likely to help if they feel they are reciprocated if you have the ability. Gratitude is a fundamental quality that an entrepreneur must possess
Step 4. Win over the investors
Present your idea to any potential investor so that you can get the money to start your business. The type of business you intend to undertake defines the profile of those who wish to invest. Building a network of contacts is a great way to get advice and opportunities on how to invest.
- Keep in mind that the so-called "venture capitalists" (ie those who make financial resources available in the equity of unlisted companies, newly activated or with projects with high development potential, often referred to in the world of work as "VC") they focus on two things: how much money they will make after investing in your business and how long they will make their profits. Although hundreds of thousands of businesses open each year, only about 500 a year get VC funding.
- If you provide a professional service, for example in the field of consulting, accounting, law or medicine, consider forming a company with someone who already has a stable business in their field. Someone who is comfortable and familiar with your business field may be more likely to invest in your success.
- Starting small and satisfying a limited number of customers at first is the most likely way to succeed. If you can, try starting the business without spending too much money. This may be the best course of action.
Step 5. Sell
Sell and distribute your products. If you see the earnings, then you are good to go! This is the time when you need to test your market theories, find out what really works and what doesn't, and get fuel for further ideas and improvements. Keep being flexible and working hard!
Part 6 of 6: Having a Healthy Mindset
Step 1. Understand that there is no one-size-fits-all solution
Not all successful entrepreneurs need the same hours of rest or go to bed before midnight. Winston Churchill stayed in bed until 11am because he loved working in bed. Albert Einstein slept twelve hours a day because it allowed him to have a clearer and clearer mind. for them everything seems to have gone perfectly.
- Create your own routine instead of following that of some successful entrepreneurs.
- Make time for yourself and your business, especially when you are busy.
Step 2. Adapt the business plan to your lifestyle instead of doing it the other way around
Many of the advice for entrepreneurs is based on finding ways to carve out time for yourself between activities. Instead, adapt the job to your life and find an activity that allows you to do so.
Evaluate whether your personal goals are still compatible with those of your business. If the answer is yes, and you still feel motivated and energized, continue in that direction. If the answer is no, try to find a way that your job fits your life better
Step 3. Avoid loss aversion
Is what you have invested in your business the only reason that prevents you from renewing it? It is a common thought, but rather irrational. The psychological phenomenon called "loss aversion" describes why such thinking is irrational: "In some individuals the perception of loss is two and a half times more acute than that of an equal gain."
- For example, a common mistake made by those who invest in stocks. After buying stocks, it is very likely that the investor will stubbornly hold them even if they lose a lot of value. People hate selling something for less than what it was bought. So they prefer to keep them although it is more rational to sell them to invest the remaining money in more promising stocks.
- Reduce your losses and start again. Find a better strategy and, instead of focusing on what you have lost, focus on what you can gain with the change.
Step 4. Be realistic
Starting a business while you already have another source of income can be less stressful.
- Try to find a part-time job where you can learn valuable things for your job, perhaps in an industry relevant to your business, learn skills like marketing and SEO, or perhaps where you can connect with other entrepreneurs.
- Don't expect to find yourself with an empire overnight. Starting small is perfectly normal.
Step 5. Take a vacation
Take a few days or go on vacation regularly. Take some time to recharge and give yourself the opportunity to regularly re-evaluate your business from a fresher perspective.
Advice
- The world of entrepreneurship is difficult, even when you are successful. Try to maintain healthy relationships with friends and family so that you have the emotional support you need.
- You don't necessarily have to start alone. In particular, for new start-ups, such as law firms or restaurants, relying on a group of people with experience and expertise in the sector increases the chances of success.
- Don't let your guard down once you've achieved some success. Businesses must continually adapt to changing market needs and customer demands, even when they are doing well. Continue to expand your network of contacts, communicate with customers and do not give up on innovation.
