Stage 6. Starting a business (beginning of implementation of the startup business plan)

Starting a business from scratch - this is a rather complicated and not entirely understandable process, especially for beginners. Therefore, many who want to become businessmen do not know where to go and where to start. There are a lot of questions in their heads that they want to find answers to. And the most important thing that new entrepreneurs want to know is how to open their own business from scratch and not go broke.

Content

Pros and cons of starting a business from scratch Starting a business from scratch. Step-by-step instructions Step 1. Making a decision Step 2. Looking for an idea Step 3. Conducting a market analysis Step 4. Drawing up a consistent action plan Step 5. Drawing up a business plan Step 6. Finding money to open a business Step 7. Registering your business Step 8. Choosing taxation system Step 9. Organizing a business Step 10. Starting a business Step 11. Developing your business and active promotion Step 12. Scaling How to understand how effective your business is at the start Opening a business from scratch using a simplified scheme

Before we begin to analyze the step-by-step plan for opening your own business, let’s consider its main pros and cons.

Breakdown stage

At this stage, you can get back the money you spent on opening the business. The business has a minimum profit, and with its help it is possible to maintain turnover: there is enough money from the sale of goods to buy new batches. But the funds may not be enough to make improvements that will allow you to make more profit: you cannot hire new employees or purchase more goods. So businesses still need funding.

How to attract money?

• Take a microloan from an MFO The conditions for microloans for business are very different from the conditions for consumer loans - the annual rate for them is much lower (from 20%). In addition, in each region there are microfinance organizations for entrepreneurial finance that issue loans to businessmen at a reduced rate - from 8–9% per annum. Read our article on how to get a microloan to develop your business.
• Organize a collection of money using crowdfunding At this stage, you can also apply for “collective financing”, especially if you produce goods - a crowdfunding platform can become an additional sales market.

Pros and cons of starting a business from scratch

Before starting a business from scratch, every aspiring entrepreneur should be aware of the main pros, cons and pitfalls of such an undertaking. He must know and understand what he is about to get into.

If you look carefully, there are many advantages to starting your own business. We will look at the most basic and common advantages .

1. Doing what you love

As a rule, beginning businessmen choose the field of activity that they like and in which they are well versed. Therefore, when opening a business, they exchange a job they hate for a job they love, in which they can fully reveal themselves. .

1. Personal growth

Unlike hired work, starting your own business contributes to the growth of both the individual and his capabilities. Nothing promotes self-development and change in all areas of life like owning your own business.

1. Independence

By opening his own business, a person becomes independent from literally everything: from the boss, work schedule, vacation schedule and working day, lunch time, etc.. A businessman becomes his own boss and decides when to come to work and when to leave, what time to have lunch and whether to have lunch at all, when to go on vacation, and when to just go for a walk.

1. Financial opportunities

Starting a business is a great opportunity to become a financially independent and successful person. True, to become one, you need to spend a lot of time and effort, which, with the right approach, will very soon pay off with interest.

In addition to the positive aspects, starting your own business also has certain disadvantages .

1. Responsibility

This is probably the main disadvantage. It is because of the responsibility that many people give up the idea of ​​starting their own business. In business, you will have to solve all problems, from small to large, on your own. Only you will have to answer for your every decision and final result. And the fate of not only your business, but also your partners and staff (if you have them) will depend on your decisions, actions and deeds.

1. Complexity and labor costs

It will be especially difficult at the very beginning, when almost all your time and energy will be required from you. While your business is growing, you will have to invest your entire self into it. You will have to work not 8 hours, as in your main job, but at least 16 hours a day. Owning your own business is extremely stressful. You will have to gather all your mental, moral and moral strength, show tremendous psychological stability in order to maintain peace of mind and your reputation. Lazy and psychologically unbalanced people are better off not even starting.

1. Capital intensity

Opening and developing a business requires investing a considerable amount of money. You have to pay rent, buy raw materials, pay for advertising, invest in development and promotion. Many simply do not have such funds, and therefore novice entrepreneurs take out loans, which significantly delays the return on investment of the business.

1. Financial risks

If you open your own business, this does not mean that you will certainly gain financial stability and become rich after a certain period of time. Maybe everything will turn out exactly the opposite. Owning your own business always involves huge risks, primarily financial ones. Instead of financial freedom, you may end up with a bankrupt enterprise with huge debts, and for a long time you will persistently try to get out of the “debt hole.”

Growth stage

The business’s profits and the number of clients increase: it is possible to pay off debts, if any, hire new employees, and increase production volumes. Additional investments should be spent on improving service and solving problems that hinder development. Let's say your courier service needs not two cars, but five. Or the online store website needs to be seriously reworked.

Also at this stage, there is a high probability of encountering cash gaps: when you have already earned money, but you don’t have it in your hands yet and you cannot put it into circulation or spend it.

How to attract money?

• Include a factor in the payment scheme If you are engaged in trading, right now you have more clients, which means you need to buy and sell more. Many companies sell goods and services with deferred payment: they received or sold the goods today, and the money for it will be transferred only in a month or two. To avoid a cash gap, you can include a factor in the relationship between the buyer and the seller. A special company or bank pays the seller for the goods at the time of delivery, and the buyer has a deferment: he pays for the goods later and to the factor. Read more about factoring in our article.
• Leasing equipment or property And at this stage it is not necessary to buy additional equipment, transport or real estate - you can lease what you need and buy it later, when the equipment allows you to earn more.
• Take out a loan A growing business that has been around for a couple of years is more likely to be approved for a loan. You can get preferential terms or secure loan guarantee support from banks and microfinance organizations that operate under government support programs. Read more about this in the articles “How a small business can get a loan under a state guarantee” and “How to get a preferential loan for a small business.”
• Sell ​​a share of the business This way you will receive not only money for further development, but also a business partner. To avoid possible conflicts and not become a victim of an unscrupulous colleague, carefully approach your choice: be sure to legally record the sale of the business, draw up an agreement that will clearly state what rights the partners have and what their role is in the project.
• Attract co-investors Your business is already successful, which means there is a greater chance that investors will be interested in it. You can look for them among colleagues and acquaintances, on crowdlending sites and industry forums.

Starting a business from scratch. Step-by-step instruction

If you have a great desire to open your own business from scratch, and you are ready to make enormous efforts, invest a huge amount of your time and effort, and are ready to change your life 180 degrees, you can begin to implement the step-by-step plan given below.

Step 1. Make a decision

Of course, without a firm decision, no business will succeed. Before you plunge headlong into the world of business, you need to weigh the pros and cons. Understand for yourself whether you need it or not. Running your own business is a completely different life, where there will no longer be the same stability and confidence in the future. Think carefully and decide for yourself whether it’s worth changing your life so radically, or whether it’s better to live your old life as a hired worker. But a stable life with confidence in the future.

If you decide to start your own business, you must be prepared for the fact that your life will change 180 degrees. Especially at first, you will have to work like a horse and spend all your time on your business. And no matter what happens, you must show tremendous patience, perseverance and be psychologically resilient to any circumstances.

Step 2. Looking for an idea

If you have weighed the pros and cons and decided to open your own business, then you will need to choose which business to open. That is, choose a business idea. There is no need to reinvent the wheel; you can simply use proven business areas. Just choose the idea that you like best and that you understand at least a little about. You shouldn't open a business that you don't know anything about and don't like.

Step 3. Conduct a market analysis

Once you have chosen a business idea, you will need to conduct a market analysis. Identify its main competitors, evaluate their positive and negative sides, prices, quality of service, assortment. It’s good to think about your advantage over your competitors, how you will differ from them, what you will do better. Pay attention to demand, find out whether people need your product at all.

If, as a result of the analysis, you decide that you can compete with existing enterprises, then you can proceed to planning your actions.

Step 4. Draw up a consistent action plan

Drawing up a consistent plan of action does not mean drawing up a business plan, but, namely, drawing up a consistent plan for your actions. That is, you describe in detail and thoroughly, and, most importantly, consistently everything that you need to do to open a business.

This will include drawing up a business plan, registration, advertising, organizing a business, etc. Write everything in detail on a piece of paper or on a computer. This will greatly help you to do everything correctly, without missing or forgetting anything. You will know what, when and how to do. It is important not just to write an action plan, it is even more important to manage to strictly adhere to it, adjusting if necessary.

Step 5. Draw up a business plan

Without a well-written business plan, it is better not to open a business. It is the business plan that will show you whether it is worth opening a business or not. How much and what expenses will you face? What will be the profit and when will your business pay off? And will it pay off at all? Exactly, from a business plan you will see your business from the inside. You will understand him better. You can optimize your expenses and find a way to increase profits. And, most importantly, you will know how much money you will need to open a business.

If the business plan is not drawn up for investors, then it is better to write it in the form in which it will be more convenient for you to work with it. And don’t look for ready-made business plans. They are very different from reality.

Step 6. Finding money to start a business

Here we come to the main problem when starting a business. You can, of course, try to open a business without investment, which in practice cannot be done. Whatever you say, you will have to bear organizational expenses. For example, such as: registration costs, purchase of materials, goods, etc.

Among businessmen, a business without investment is considered to be a business that requires no more than one thousand dollars to open. You should have at least this amount.

So, in any case, you need to think about where you will get the money. It’s good if you have them, but if you don’t have options for where to get money to start a business, read this article . It is strongly not recommended to take out a loan to start your own business, especially if you are a beginner.

You can read about how to get a loan to start a small business from scratch in this article .

Step 7. Register your business

If you have drawn up a business plan and you have the necessary amount on hand for your business, you can start registering it. It's impossible without registration. Any business must be registered.

Depending on the type of your activity, you can choose the legal form of LLC or individual entrepreneur.

Individual entrepreneurship (IP) is an individual who has the right to hire workers.

The advantages of this organizational and legal form include:

• cheap registration;
• For registration, only a passport and TIN are required;
• easy to liquidate in bankruptcy.

Main disadvantages:

• bears responsibility with all his property;
• limited growth and increase in sales;
• it is impossible to sell or transfer the business;
• restrictions on conducting various areas of activity.

A limited liability company (LLC) is already a legal entity that may have several founders. The authorized capital starts from 10 thousand rubles.

Advantages:

• there are no restrictions on conducting various types of activities;
• the founders may be held liable solely to the extent of their shares in the capital;
• business growth and expansion opportunities;
• the business can be sold.

Flaws:

• with a large number of founders, the process of approval and decision-making is delayed and complicated;
• The entry and exit of the founders must be coordinated with the registration authorities.

Step 8. Choose a tax system

It is very important to decide which tax system you will use before starting a business. The amount of taxes and the method of payment will depend on this.

Step 9. Organizing a business

Organizing your own business means:

• searching for personnel, although at first it is better to work alone;
• rent premises;
• create advertising and decide on ways to promote at the initial stage of business;
• organize document flow and office work.

At the stage of organizing a business, it is necessary to pay special attention to marketing and ways to attract customers. This is very important not only at the initial stage, but throughout the entire period of the business’s existence. In addition, in order to make as few mistakes as possible, you can resort to consulting by contacting a consulting company.

Step 10. Starting a business

At the very beginning, you need to test your idea. You just need to make a minimal purchase of goods with minimal advertising, and see how sales go. This is done in order to assess what the demand for your product will be in reality. Based on the results obtained, make the necessary adjustments and improvements to your plan.

TIP: Don't delay launching your business by constantly refining and improving your plan. You need to start as quickly as possible. And then, as things progress and the results obtained, you can make adjustments to your plan.

Step 11. Development of your business and active promotion

If your business has successfully passed testing, then you can begin to develop it, finalize and improve your plan. Your business has already brought in its first profit, with which you can increase the rented space, staff, create a good plan, etc.

Since your business idea has shown its efficiency, if you lack money, you can take out a loan for business development.

At the promotion stage, you should use advertising opportunities to the maximum. Look for clients on the Internet, do offline advertising, engage in direct sales, etc.

Don’t sit still, search, learn and use all the methods, methods and opportunities to develop and promote your business.

Step 12: Scaling

If your business is actively developing and promoting, you can begin to expand. For example, you can open representative offices in other cities, or take over a related area.

You just need to look at your business, and you will definitely understand what you can catch on to.

Psychology of building your own business

Any entrepreneurial activity is associated with certain difficulties and risks, which provokes the emergence of various fears and uncertainty in a novice businessman. Therefore, it is not enough to just want to become an entrepreneur; it is important to have the ability to overcome your own doubts, which is a key skill for achieving success. The easiest way to do this is to identify for yourself the consequences that you fear and find ways to solve the problem. Thus, the most common fears of novice businessmen are:

• Fear of criticism and dissatisfaction . To overcome this fear, you should come to terms with the fact that you will always have competitors or dissatisfied customers, because there is no business that everyone would like. On the other hand, constructive criticism should not be confused with dissatisfaction, which is a source for analyzing your business and shaping your development strategy.
• Fear of ruin . You can lose everything, even if you have a stable job, and therefore, in order not to be afraid of bankruptcy, you should start small, giving up loans and first creating a safety net for your personal budget. If this is your main fear, pay attention to activities that allow you not to give up your current type of employment.
• Fear of making a mistake . Even experienced entrepreneurs make mistakes and make bad decisions, but this only builds their experience and skills to avoid repetition in the future. In order not to be afraid of wrong decisions, you need to constantly study, communicate with more experienced businessmen, attend trainings and practice in your chosen field of activity.
• Fear of taking action . This fear is most often associated with laziness, lack of self-organization and reluctance to take responsibility. You can overcome it solely through self-motivation. At the same time, you can rely on curators, coaches or mentors only during trainings and seminars. Otherwise, it is better for you to postpone the decision to start your own business for a more suitable period.

How to understand how effective your business is at the start

There are several criteria by which you can understand whether your business will “survive” or not.

1. If your profit without expenses and taxes is above zero, then there is every chance of prosperity.
2. If your sales are less than planned, then you need to urgently take action and adjust your work.
3. You should feel comfortable. If it is very difficult for you, then it will be very difficult for you to cope.

Maturity stage

At this stage, the business stops growing rapidly and becomes resistant to external circumstances. Problems in the economy (for example, rising prices for raw materials) or force majeure should not become a death sentence for the company - in this case there should be a financial airbag that will allow it to survive the crisis and find a way out of the situation. Although there are fewer risks, you shouldn’t let everything take its course. If you keep the situation under control, you can stay in this stage for a long time. But you can develop your business further and scale it. For example, expand the geography and sales volume or increase the number of retail outlets in your region. This will require not only effort, but also finance.

How to attract money?

Profit alone may not be enough to scale your business. You can attract additional money using methods already familiar to you. You should choose them based on the specifics of your business. If you have a transport company or a taxi fleet and you need more cars, leasing is suitable. If you have a beauty salon and want to launch an advertising campaign to attract new clients, you can take out a microloan from an MFO. If you need a new point, think about maybe a loan is right for you.

• Take out a loan using crowdinvesting Crowdinvesting is a way to get loans on special Internet platforms. At this stage of the business, the company’s financial statements will most likely not raise doubts among potential investors, and the loan will be taken out quite quickly. Read more about it in the “Crowdinvesting” tab in the article “Crowdfunding: How to raise money using collective financing.”
• Take out a loan For a mature enterprise, a loan is a completely safe way to raise money, if, of course, you understand perfectly well what it will be used for. At the same time, the maturity of the company does not at all deprive you of the opportunity to receive benefits.
• Issue securities Legal entities at the maturity stage can issue shares and bonds to raise additional money. A share is a kind of “sale” of micro-shares of a company: the shareholder gives you money, and in return receives a percentage of possible profits. In addition, the votes of shareholders will need to be taken into account when making decisions on the development of the company. A bond is a debt obligation in which you, figuratively speaking, borrow money from the buyer and agree to pay back more over time.

Opening a business from scratch using a simplified scheme

You can open a business in another simpler way. but a more risky scheme. It is better to launch very small projects using this scheme.

1. Idea. Whatever one may say, there will be no business without an idea.
2. A little planning. A simple plan, even on a notepad, is still needed.
3. A quick test of an idea. Whatever one may say, you still need to test the idea. It’s possible even without investment.
4. Promotion. After sales begin, you can already think about promotion. That is, invest more money to get as much as possible.
5. Registration. If things go well, you can go and register.

What is the shadow economy you can read in this article

Now you know the step-by-step instructions for starting a business from scratch. You know what and when you need to do in order to “survive” and not get into large debts. Realistically assess your capabilities and only then get down to business.

In conclusion, I would like to note that starting a business from scratch is a matter that requires the investment of colossal patience, a huge amount of effort and time. And, if you are confident in your own abilities, in your psychological stability and are ready to put your whole soul into your business, then you can begin to compile your own step-by-step instructions for opening your own business, based on the features and nuances of your business idea. And don’t forget to put aside all your fears and doubts and put your business opening plan into action.

Before you start your business...

There is an idea, and I adhere to it, that all people, in terms of how and where to start their own business, are either doers or dreamers. Everyone dreams, I'm sure, but few do! This is where the answer to the question “ Where to start your business lies?” " Start by becoming not a dreamer, but a doer

. You will never be able to know, have or be able to do EVERYTHING that you seem to need to start your own business. You will always want to read a little more, learn something more... and you will remain a dreamer.

To start your own small business, you have to do it, not want it. Let it be slowly, step by step, but still create your own business from scratch, work on it. There is no other way. This is banal, and you’ve probably heard about it more than once, I understand. But this is the “naked” truth.

Stage 5. Registration with all necessary authorities

Entrepreneurial activity must be properly formalized in terms of legal norms. The choice of organizational and legal form is determined by the type of activity and the permissible form of taxation, the number of founders. For small businesses, two forms are relevant: Individual entrepreneur and limited liability company.

After choosing the legal form of doing business, you need to choose a taxation regime. Tax Code of the Russian Federation For small businesses, special forms of taxation are provided, which imply a simplified format for maintaining tax reporting and preferential conditions for paying taxes.

By working through each stage in detail on the path to creating his own business, and paying sufficient attention to detail, a businessman lays a reliable foundation that will allow him to build a successful and profitable enterprise.

Self-esteem

Any start requires enormous effort, a lot of time, labor and, most importantly, emotions. In addition, business always involves risks. The psychological and emotional attitude is of particular importance. When starting your own business, you need to be prepared for the fact that you may have to sacrifice established family relationships, financial stability from the salary you receive, friendly contacts and personal connections.

But at the same time, you need to be confident in a successful result and give yourself clear answers to the following questions: am I competent in the area where I intend to create my own business? How well do I know the market rules and laws? Is he capable of taking risks? Am I good at getting along with people? Am I firm in making decisions? Do I have enough physical strength and emotional potential to successfully conduct business? Do I plan and organize my affairs well? How confident am I of success?

Of course, it is hardly possible to give positive and reasoned answers to all these questions with complete confidence, but it is necessary to strive to ensure that there are no decisively negative answers.

Attracting resources

To start a business, you need a certain amount of funds. The threshold for entering a business may vary both from the type of activity planned for organization and from the method of its implementation. Establishing your own business requires significant money to purchase raw materials, equipment, rent premises, hire employees, etc.

When you have impressive funds, it is always appropriate to think about purchasing a functioning enterprise. Purchasing an existing organization eliminates many problems. All the necessary resources will have already been collected, the company’s activities will be established and, importantly, the “company’s reputation” will be acquired.

It is also wise to consider doing business through franchising. Franchising is a form of business organization in which the owner of a product (franchisor) licenses or sells its brand, know-how and production system to an independent entrepreneur (franchisee). And the franchisee pays the owner an initial fee and a service fee (royalty) for the right to the business.

Franchising allows you to quickly open your own business using ready-made schemes, and support from the franchisor helps you avoid and overcome problems that often arise at the initial stage of creating a business.

The source of funds for starting a business can be:

• personal savings;
• bank loans;
• funds subsidized by the state;
• loans from licensed financial institutions.

How to “promote” your business?

First you need to take care of the initial capital. The source of financing can be your own funds, money borrowed from acquaintances and friends, investments, loans. The most enterprising young people can even win the tender, but this method is quite complicated. To obtain it, a young entrepreneur will need additional recommendations from experienced “colleagues.”

In general, a small business does not require large investments at first. If you have the desire and a business plan, you can organize your own business with meager funding.

Market assessment

One of the main conditions that must be met for a successful start of a business is a thorough analysis of the niche and the product offered for sale.

When making a decision to start a business, one should take into account the potential opportunities of various types of business depending on their territorial location. Having chosen a niche, you need to conduct a market analysis and understand whether people need your product, evaluate the competition and find your distinctive advantages. It would be a good idea to get advice on this matter from business support services. Matching business qualifications to local market opportunities significantly increases the chances of success.

Before you begin assessing the market, you need to answer a number of questions:

• for whom the entrepreneur will produce his product, perform work or provide services;
• what specific goods or services he intends to produce or provide, and whether he has conditions for this;
• what will be the technical and technological basis for the production of products or the provision of services, at what costs and level of competitiveness;

When answering these questions, you should be guided by the most important market principles, among which are the following:

1. Entrepreneurial activity is aimed at satisfying other people's needs; it is necessary to find needs, identify the possibility and method of satisfaction.
2. When the market is full, it is necessary to produce goods at lower costs relative to competitors, otherwise the market may not recognize the goods, the entrepreneur will not sell them and will not make a profit.
3. When setting prices, it is necessary to take into account the behavior of competitors, customer demand and the level of market saturation.

During market research it is necessary:

• establish the volume of the market and its target audience (form a portrait of the consumer: age, gender, profession, social and financial status);
• determine the location of a potential client;
• establish data on the volume of offers and sales of goods by competing companies. Study the structure and operating methods of the sales network that are used in this market;
• conduct an analysis of external factors affecting the market structure (for example, economic).

As a result of the market assessment, the type of activity, location of the organization and territorial boundaries of the business should be clearly defined.

Most often, entrepreneurs open their own business in an area where they have certain experience and knowledge, and sometimes they create a completely new product or service. But no matter what field a new organization is created in, the most important thing is to be sure that it is commercially viable, and that there are a sufficient number of interested people who will be willing to pay the set price for the goods or services produced.