How to start a business
Owning your own business is what many dream of. However, after deciding to open your own business, you need to realize the full responsibility of this step and think through many nuances, each of which can significantly affect the course of the business.
If you want to start your own business, it is also important to understand that you assume financial, moral, social and other responsibility for all your actions.
How to start a business
Of course, there is no clear and only true instruction on how to open your own business. Much depends on the type of business, on your financial capabilities, on your goals. But we can offer you the most generalized scheme for starting a business and it consists of the following steps:
Choosing a business idea
The modern world is full of many opportunities and ideas that can be realized. To choose “your own” from them is not an easy task, and many fall into a state of stupor when they begin to think about it. All you need to do is gather your thoughts and identify two main things: what you like to do and what you know how to do. A business idea that perfectly fits both the first option and the second is what you need.
Many beginning entrepreneurs make a big mistake at this stage – they think exclusively about the financial possibilities of the business, and completely forget that the business they are involved in should be fun. Otherwise, very soon there will be a loss of interest in activities and, accordingly, such a business cannot become successful.
Collection of information
Entering the market is necessary only with a sufficient amount of knowledge about it. You will spend a lot of time studying both the basics of doing business and the specific market you have chosen. However, this time will not be wasted – because you are creating the foundation on which you will organize your business.
It is important to soberly assess the opportunities and prospects of the market in which you are going to conduct your business. Perhaps, when collecting information, it turns out that the market is already oversaturated and consumers simply will not accept you. Or the market is no longer relevant and has no development prospects. In such cases, it is worth revising your goals and thinking about another area of business.
Drawing up a business plan
This is an important step towards the successful start of a business. Many studies have proven that companies that started with a business plan ended up being more profitable than those that did not. You can use the services of companies that are engaged in the preparation of business plans to order or try to cope with this task yourself.
For more details on how to draw up a business plan and why it is needed, read the article “How to draw up a business plan. Example”.
Identification of sources of capital
Some types of business require large sums of money to start, others require more modest ones. But you cannot do without start-up capital. Its sources may be the following: your own savings, bank credit or investor investments.
Many businessmen take a loan already at the first stage (this is especially common in the restaurant business, and business related to real estate), but it is important to understand the degree of financial risks. The business may burn out, and the loan taken will remain with you. It’s good if you have a certain amount of money before starting a business that will help you cope with possible financial difficulties and not get into debt.
Choosing a company name
In what legal form to register your company depends on the expected scale of activity, cash flow, the number of founders and employees, the availability of property, etc. The most common forms are an individual enterprise, a limited liability company, a joint-stock company. They have a number of fundamental differences, and the registration procedures are also somewhat different.
If you are going to open an enterprise together with partners, it is important to assess the degree of relationship between you. Even if you trust your partner 100%, you can never be responsible for the actions of another person.
Organization of an accounting system
At this stage, you need to consider how accounting will be conducted. If you have sufficient knowledge in this area, then you can do it yourself. Otherwise, hire an accountant or resort to the services of an audit company. Correct accounting is something with which you will always know how things are going with the financial part of the business in your company.
Opening a bank account
It doesn’t matter what kind of business you want to start, whether it is construction or vending, flower or restaurant, you need to have your own bank account. Each bank offers its own conditions, so you need to spend a little time and choose the most suitable for yourself.