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When a person decides to start his own business, he is faced with a huge number of questions. Is there a chance for success? What is a business plan and how to write one? What to choose: individual entrepreneur or LLC? What is the easiest way to pay taxes? Here's what a budding entrepreneur needs to know and where to start if you want to start your own business.
Evaluate the viability of the idea
So far, you only have an idea, so it's worth starting with it. To assess whether starting a business is worth it or not, answer yourself a few questions.
If you end up evaluating the business idea as promising and capable of generating profit, test it on your target audience. After the first tests, your idea may transform a little more.
The outcome of this initial analysis should be a business strategy that will help you turn an idea into a concrete action plan.
Stepan was fond of art forging all his childhood. Now he decided to open a silver jewelry store. Most of his audience is girls. He arranged a survey on his social networks among girls he knew to find out whether they liked his sketches, how much they were willing to buy such products and whether they would go to a sleeping area for them. As a result, it became clear that an online store would be sufficient at first.
Write a business plan
After you have drawn up the general strategy, you need to calculate everything in detail. A business plan will help you with this. You and your business partners and potential investors or lenders will need this plan.
The business plan should contain a detailed description of the product with options for its further transformation, market analysis with a description of all groups of competitors and the characteristics of potential buyers.
Without numbers, a business plan certainly won't be convincing. You need to understand in advance how profitable the business will be. Therefore, a business plan must include several mandatory components:
In order to draw up a business plan, you can use, for example, a form developed by any bank.
Consider attracting investment
Now you can think about how to attract money to your business. This can be done in different ways:
Register a business
You can conduct business as an individual entrepreneur (IE) or as a legal entity (usually LLC).
Select the form of taxation
Take care of the details
After you have decided on the main questions, there are many more details to deal with.
If you are starting a business remember
There are many challenges for any aspiring entrepreneur. But your business, which will bring you money and satisfaction, is worth it.
The text was prepared with the support of experts from public organization of small and medium-sized enterprises Support.
Evaluate the viability of the idea
So far, you only have an idea, so it's worth starting with it. To assess whether starting a business is worth it or not, answer yourself a few questions.
- What do I offer clients?. Try to make an unbiased assessment of whether your product or service is needed by customers and how it will differ from similar products and services. Be sure to look at what your competitors are offering and evaluate what they are doing well and what they are not doing well - try to find your niche in the market.
- Who will I offer my product to?. Find your target audience - those who might be interested in your product. Find out what their explicit or still latent need he will help satisfy. You need to introduce your potential buyer: gender, age, marital status, social status. Ideally, you also need to understand the problems and desires of the client, the features of his behavior and character, imagine situations when he may need your service or product. This will help you at all stages - from the choice of premises to advertising and promotion.
- Where will I sell my product?. Perhaps your audience is used to buying everything on the Internet, or maybe your product needs to be touched or tried on - then you will need a space for a store. Where should it be located - in the center or in a residential area? Think, perhaps, you still need a warehouse or an office. If you are going to sell your product exclusively online, then consider shipping. Jewelry delivery and pool delivery are different services.
- How much is it?. Consider at what price you will sell the product. Estimate the approximate cost of goods, analyze at what price your goods will be ready to buy. Remember that you must cover all costs and make a profit. At the same time, it is important not to make an excessively large mark-up on your goods or services, otherwise there will be no demand and you can burn out. Focus on the market.
If you end up evaluating the business idea as promising and capable of generating profit, test it on your target audience. After the first tests, your idea may transform a little more.
The outcome of this initial analysis should be a business strategy that will help you turn an idea into a concrete action plan.
Stepan was fond of art forging all his childhood. Now he decided to open a silver jewelry store. Most of his audience is girls. He arranged a survey on his social networks among girls he knew to find out whether they liked his sketches, how much they were willing to buy such products and whether they would go to a sleeping area for them. As a result, it became clear that an online store would be sufficient at first.
Write a business plan
After you have drawn up the general strategy, you need to calculate everything in detail. A business plan will help you with this. You and your business partners and potential investors or lenders will need this plan.
The business plan should contain a detailed description of the product with options for its further transformation, market analysis with a description of all groups of competitors and the characteristics of potential buyers.
Without numbers, a business plan certainly won't be convincing. You need to understand in advance how profitable the business will be. Therefore, a business plan must include several mandatory components:
- production plan and calculation of the cost of goods or services;
- promotion plan and cost estimate for advertising and other types of communication with clients;
- an organizational plan and an assessment of the salaries of employees, as well as external (for example, courier) services;
- a financial plan that takes into account all sources of funding and income, as well as everything, including one-time expenses and taxes.
In order to draw up a business plan, you can use, for example, a form developed by any bank.
Consider attracting investment
Now you can think about how to attract money to your business. This can be done in different ways:
- Seek government support. If your business is important for people from your region or even the whole country, then the government can help you with guarantees, inexpensive loans or loans, preferential leasing and rent.
- Raise money through crowdfunding. If you are sure that your project will be interesting and useful to a large number of people, you can try to reach them directly through special Internet sites. The crowdfunding format will depend on the type of your business.
- Attracting an Investor. Private investors sometimes invest in startups, most often in technology ones. There are also special Internet platforms for searching for venture investors.
Register a business
You can conduct business as an individual entrepreneur (IE) or as a legal entity (usually LLC).
- IE is suitable for those who have a small business - for example, a small store or production.
- LLC is a company that you can open yourself or together with partners. Suitable for those who are planning a business with high turnover, and for those who will transfer large amounts by bank transfer.
Select the form of taxation
- General taxation system. Suitable for those who need VAT (value added tax).
- Simplified taxation system. Suitable for small businesses.
- Patent. Suitable for those who find it easier to pay a fixed amount than to deal with documentation.
- A single tax on imputed income. Suitable for those who have business premises (but not in Moscow). Not suitable for those with more than 100 employees.
Take care of the details
After you have decided on the main questions, there are many more details to deal with.
- Open an account at the bank.
- Start an online checkout. By law, many entrepreneurs (mainly those involved in trade) had to start using the online checkout. But some businessmen were given a reprieve. On the website of the tax office, you can take the test “Do I need a cash register?". So you will find out if you can take advantage of the deferral or you need a cashier now.
- Check the compliance of the premises with fire safety requirements.
- Clarify sanitary requirements if you plan to work with food.
- Study consumer rights.
- Verify that your product meets government standards.
- Find out whether you need to certify, declare or register goods if you import them from abroad (lists of such goods are available on the websites of certification companies).
If you are starting a business remember
- You should start by evaluating the idea and drawing up a general strategy for your business.
- If the idea is worthwhile, you need to write a detailed business plan. It will become your main reference point for the first six months to a year. Then you may need to adjust it.
- Find sources of funding.
- Decide on a convenient form of doing business and reporting to the tax
- Pay attention to detail. Connecting an online cash register, fire safety and certification conditions are the subtleties that need to be taken into account in order not to pay fines later. If you can't figure out the nuances yourself, seek advice from a more experienced entrepreneur who works in the same field as you. Or contact a business consultant to help resolve difficult issues. Consultants can offer both partial and full support for your business.
There are many challenges for any aspiring entrepreneur. But your business, which will bring you money and satisfaction, is worth it.
The text was prepared with the support of experts from public organization of small and medium-sized enterprises Support.
