Why Should You Start A Business?
Everyone in this day and age needs to some sort of work in order to sustain. Some people work 9-5 jobs, some people are self employed and some people run their own businesses. Now you would be thinking what is the difference between starting and running your own business and working 9-5. Well, the difference is very big. Unlike the conventional jobs your salary or the money you take home is fixed. It doesnt depend on aything (except your boss’s mode) on the other hand in business the money you take home is directly linked with the effort and the work you put in. You can work 2 times harder in a job but would be still making same money as you did before but if you work 2 times harder in business you can potentially make 5 times more money. Thats why they say “Real Money Is In Busines”. Now if your goal is to make money and achieve your goals you would need to start a business. But here is the catch; statistics show that 20 out of every 100 businesses fail in just their first year. You never want to be another statistic. So here is how you actually start a business.
Idea Generation
Start With Identifying A Problem.
The first step should be to identify a problem. A problem that is either a pain of people, struggle of people or the fear of people. Keep in mind this problem should be such that people are willing to give you their money in exchange of solution that you will provide. Look around your environment and note down every problem that you are facing or people might face.
After you have 10-15 good problems, shortlist some problems that are realistic to solve. Consider in factors such as time taken to solve the problem, cost of solving the problem, will you buy the solution? etc.
Now pick the one you that suits your passion, has all the green flags and people will pay money for its solution.
Find a solution
As soon as you have a problem that 1. Has a need of solving, 2. Is pain, fear or struggle of someone, 3. People would pay money for the solution. You have your self a business idea. Figure out how you can solve it. How you can help people go through the pain, and the struggle. Your main focus should be to figure out a solution that is less costly to solve and but not very easy so the entry level barrier is high and you have less competition in future. For in depth explaination I highly suggest you go through this video where we explain everything on how to pick a business and start it!
Sell the problem
In business the only thing which will make you able to have money is selling. Thats the only way you are going to make money from your business. You have the problem, and the solution now you just need to tell people about the problem and sell them the solution. People arent going to buy from you untill they know that yes i am facing the problem which he talking about. Remember, people dont know their problems as much as you think they do. When i was in starting to sell websites, I had to tell business owners that they are facing the problem of low brand visibility on google which website will help solve it.
Quick sales tip: Show them how another client of yours had the same problem but he didnt knew he was facing it, but when you solved it he then understood the magnitude of the problem.
Legalities of Starting A Business
It is better to talk to a financial consultant about the legalities of starting a business because laws vary province to province but here are the key things you have to get in order to start a business.
Choose a Business Structure
- Sole Proprietorship: Simple to set up but offers no personal liability protection.
- Partnership: Involves two or more people; can be general or limited.
- Limited Liability Company (LLC): Provides liability protection with flexible management options.
- Corporation (C-Corp or S-Corp): Offers liability protection but comes with more regulations and possible double taxation (C-Corp).
- Nonprofit: For charitable, educational, or social purposes; must meet specific criteria.
Register Your Business Name
- Doing Business As (DBA): If operating under a name different from your legal name or the legal name of your LLC/corporation.
- Trademark: To protect your business name and logo on a national level.
3. Obtain Necessary Licenses and Permits
- General Business License: Required by most cities and counties.
- Professional and Trade Licenses: For certain industries (e.g., healthcare, legal services, construction).
- Health and Safety Permits: Especially if dealing with food, beverages, or hazardous materials.
- Environmental Permits: If your business impacts the environment.
4. Register for Taxes
- Employer Identification Number (EIN): Issued by the IRS for tax purposes and required if hiring employees.
- State Tax ID Number: For state tax obligations.
- Sales Tax Permit: If selling taxable goods or services.
Costs & Profits
Before diving into the world of business it is very much better to have an idea of what your cost and profits are going to be. It is far better than just going into running a business without knowing how much could you expect to pay from your own pocket if you want to start your business. This will also help you in the investor pitch where you will ask how much you need.
Costs and Expenses
Here is the step by step way on how to figure out your costs and expenses.
1. Make a spreadsheet
2. List all possible costs and expenses you think you are going to have; for example: employee salaries, electricity bills, office rent, laptop etc.
3. Write their prices and and the approximate costs
4. Once listed this for one year calculate how much you are going to be spending in the first year
5. Do the same for the second, third and the forth year as well.
Profits
Now here is the tricky part. The profits. You will be only writing how much customers you think you can get in the first year and multiply it by the price of your solution. This will get you your estimated progits which you can expect coming in your bank account.
Some Tips To Find & Get Investment
Three Types of Investors
- Angel Investors: are individual investors who did not know you before you founded your company. They will invest in your startup because they believe in your idea and the potential for you and your cofounders to execute on the promise of that idea..
- Friends and Family: Friends and Family investors are individual investors who knew you before you founded your company. Broadly speaking, they will invest in your startup because they believe in and are supporting you as an individual.
- CrowdFunding: Crowdfunding is the practice of funding a project or venture by raising money from a large number of people, typically via the internet. Crowdfunding is a form of crowdsourcing and alternative finance.
Tips of getting investors:
- Any investor only invests because they want you take make them money. No one gives you money for free, not even friends and family. If you could convince them that this will surely work and make me money then make you money.
- Your idea should be amazing and resonates with the person.
- When pitching your business pitch, tell them why you are the one who can pull this off! If you are running a tech startup, tell them your passion with tech and experience.
Tips to Reduce & Kill Your Competition
Some Extra Tips From What I Learned
- Do everything fast. Moving quickly will get you ahead of all. Everyone is lazy, you dont be one.
- There are two types of staff. One makes you money and one saves you time. If they dont do any, fire them.
- You have to look around you for business opportunities. When I was starting out my business. I use to look around lawn signs, advertisments because these people are already spening money so this made me know that i can sell a website to them easily.
- If selling, play on people’s insecurities. What i used to do and do now when selling someone my websites. I say “Your business wont succeed without a website”. Now either they dont want to make their business successful or they will buy from me.
- Confidence is key. People will give you their money if you they see you as confident.
- If still figuring a business idea. Give society what it doesnt know how to get – Naval