6 Steps to Creating Your Own Business: Start-up for Beginners
So, you’ve got an idea. And it’s a great idea. And you think that it can work. But for one thing. You know next to nothing about business (or about starting your own business). And who could blame you! I mean, it can be a complex process. Coming up with a business model, preparing for every contingency, making it work! Behind that ingenious, innovative idea, is a whole lot of details waiting to jump up like a B grade horror movie.
But fear not aspiring entrepreneur, for in this article, we will attempt to make the starting process much easier to… well, to process. Beginning with step 1:
What is Your Idea?
Well of course you know your idea. Now all you must do is put it down in words. That will help bring your idea from a concept floating around inside your head, to the beginnings of a plan. Write down the main concept, for example, a platform where singles can meet and mingle (ripping off Tinder here).
The Next Stage in Details
Then, we move on to the details; How? An app. Where should the profit come from? Who would be your customers? You get the idea. You can download our PANDO Canvass here to help you get started. The categories are mainly self-explanatory and will help you begin tackling the key details that can make or break your prospective business.
SWOT analyses can be useful as well to identify the strengths, weaknesses, threats and opportunities that can arise in the course of planning your business.
Writing it all down will also help to solidify your plan and turn it into something tangible that you can begin to work with.
Now How Much Money Do You Have?
This is naturally a very important question, I mean we are not all rolling in cash. The traditional idea is that businesses need very high starting capital to get off the ground. And that is still true if you intend to open a restaurant or create a new product, for example.
However, the good news is that internet based start-ups can require significantly less money to initiate. Especially if you employ bootstrapping techniques like we do here at PANDO. Bootstrapping is basically a technique employed by founders who aim to start their companies on as little starting capital as possible. As for how to bootstrap, I will address that in another article.
Starting a business can be fun but sometimes you don’t want to do it alone. If that is the case, then you might want to throw in with a business partner (I will address that in another article), or you might want to seek the help of a start-up incubator or accelerator like PANDO.
Incubator and accelerator programmes help new entrepreneurs with the process of building their company in exchange for equity, percentage of profit for a specific period, or a flat fee. Some incubator/accelerator programmes are commitment intensive, requiring full time commitment from the founder like our PANDO Ventures program. Others like the 8-week company program
provide guidance via digital means and are less intensive, allowing you to casually pursue your entrepreneurial ambitions in your own time.
They provide technical assistance (finance, legal, marketing, etc.) and the benefit of experience to guide their ventures to acquiring their first external investment or first revenue. These could take the form of brainstorming sessions, investor pitch training, and or mentoring sessions.
Now that you’ve gotten started, it’s time to take to the streets and find those customers! Market research can take many forms. The simplest would be to first reach out to your social circle. Ask your friends, families and acquaintances if they would buy your product or use your service. What do they think of the idea? Do they have suggestions for improvement?
You could also go to where your target market would usually hang out (like the cinema or bars for example) and randomly poll the people there. The idea is to get as much information and feedback as possible to know if your idea could actually work; and if the people want it. With this method, you may get plenty of rejections but you will also get a lot of information. Tough it out entrepreneur. To be in this business, you gotta be brave! And it’s all for a worthy cause.
And last but not least, social media. You can very quickly and cheaply create a page and or campaign for your venture and start spreading the word. You can even use this method to test the markets in later stages of development to gauge public response to your design, logo, app, brand image, etc.
So, you have a plan, now you need the company. Incorporation methods will vary from country to country. The GmbH is the most common form of company. It is a limited liability format and creates a legal entity for the company. So, you will not be personally liable for your company’s debts.
A regular GmbH requires 12,500 Euros of capital upon incorporation with the remaining 12,500 injected into the capital reserves over the next 5 years, totalling up to 25,000. However, you can also incorporate as a UG, which is typically called a mini GmbH. You can incorporate a UG with the small capital sum of 1 Euro but a quarter of the company’s annual profits will have to be placed into the company’s capital reserves until it reaches 25,000 Euros at which point you can choose to turn it into a regular GmbH.
Obviously starting your own company is a bit more complicated than that. That’s why many people get help. But above is a good beginner’s guideline to give you an idea of what is involved and to help you get started. It may be challenging but it is ultimately rewarding. Good luck and stay hungry!
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