Where to start a business
How to start your own business
Of course, there is no clear and only correct 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 your own business, and it consists of the following stages:
Choosing a business idea
The modern world is full of many opportunities and ideas that can be brought to life. It is not an easy task to choose “your own” from them, and many fall into a state of stupor when they begin to think about it. All you need to do is collect your thoughts and define two main things: what you like to do and what you know how to do. A business idea that is perfect for both the first option and the second at the same time is what you need.
Many start-up 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 doing should be enjoyable. Otherwise, very soon there will be a loss of interest in the activity and, accordingly, such a business cannot become successful.
Collection of information
It is necessary to enter the market 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 – after all, you create the foundation on which you will later organize your business.
It is important to soberly assess the opportunities and prospects of the market in which you are going to do your business. Perhaps, when collecting information, it turns out that the market is already oversaturated and consumers simply will not perceive you. Or the market is no longer relevant and has no development prospects. In such cases, it is worth reconsidering your goals and thinking about another area of business.
Drawing up a business plan
This is an important step towards a successful business start. 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 drawing up business plans to order, or you can try to cope with this task yourself.
For more details on how to draw up a business plan and what it is for, read the article “How to draw up a business plan. Example”.
Determination of sources of capital
Some businesses require large sums of money to start, while others are more modest. But you can’t do without start-up capital. Its sources can be the following: your own savings, bank loans or investments of investors.
Many businessmen take out a loan at the first stage (this is especially common in the restaurant business and real estate business), but here it is important to understand the degree of financial risks. The business can go bankrupt, and the loan you have taken will remain yours. It is good if before starting a business you have a certain amount of money that will help you cope with possible financial difficulties and not get into debt.
Choosing a company name
The correct name is actually very important. An unusual name will help you stand out from the crowd of competitors. The name should capture the essence of your activity, but at the same time be aesthetic and attractive.
Where to start a business
Choosing a legal form and registering a company
In what organizational and legal form to register your company depends on the expected scale of activities, money turnover, the number of founders and employees, the availability of property, etc. The most common forms are a sole proprietorship, a limited liability company, and 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 a company with partners, then 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 the accounting system
At this stage, you need to think about how the accounting will be conducted. If you have sufficient knowledge in this area, you can do it yourself. Otherwise, hire an accountant or use the services of an auditing company. Correct accounting is something with the help of which you will always know how the financial part of the business in your company is.
Opening a bank account
It doesn’t matter what kind of business you want to start, be it 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 acceptable for yourself.
Obtaining licenses and permits
Some types of business require a license to operate, some do not. The same goes for various approvals from government agencies. To sell weapons legally, for example, you will need to collect many permits and obtain a license.