How to start my own business?

Who is an entrepreneur and why is it important?

Why starting a company is not enough to become an entrepreneur?

What are the basic conditions to start any business and why money is never the main issue.

In this article, we will delve into the major challenges of how to start your own business.

How to become an entrepreneur.

Let’s imagine we have a business idea worth our attention.

If we have many ideas, we should forget about all of them except the one which is the easiest to do.

Our attention and efforts should be focused onto the one and one only idea – it will simplify work and raise our chances for success.

So when should we start our business?

Wrong approach of ignorant people.

The common approach of the startup industry is “to start as soon as possible“. Then inevitably fail, smile and move on with a new idea.

Obviously, it is a very wrong approach and nobody should act like that. Even if there are some free money, which we could burn for nothing.

We are reasonable people, and failing should not be anywhere on our to-do list.

We start a business to provide value, not to waste our attention and efforts.

Only ignorant and low-intelligent people could advise something like “fail, fail, fail till you succeed”.

In startup industry you are expected to fail

Crucial skills for a true entrepreneur.

First of all we should ask ourselves if we already possess entrepreneurial qualities and skills.

Entrepreneurship can be compared to a tournament. And we want to be well trained and prepared for it.

The truth is simple:

To run a sustainable business, you should become a reliable entrepreneur first.

We are all born as free entrepreneurs and we possess entrepreneurial skills by definition. Still, such skills have to be developed enough to allow as to be successful with our business ventures.

Let’s observe some of those skills.

1. Natural drive for challenges. We call it the inner engine. Without inner engine, we will not be able to keep path with the business tempo.

2. The ability to create work is one of the key qualities of an entrepreneur. We think about our work, we plan it, track the progress, record results. We are the main people to make things happen.

3. Confidence – the core of entrepreneurship. It is a state of mind when we are ready to deal with any outcome of any situation. Confidence can only be achieved through ability to focus and concentrate.

4. Tolerance to stress. Doing business is a lot of pressure. It’s like building a railroad in front of a moving train. Our skill to handle that stress defines the overall success of our ventures.

5. Keeping order and being efficient. Order is everything. Particularly when dealing with people. And we can effectively organise others only if we can organise our own efforts.

6. Personal responsibility for everything. If we cannot rely on ourselves only, we will spend too much time waiting for other people’s assistance, which will never come.

To be successful with a business activity, we want to develop our entrepreneurial skills.

Basics of doing business.

To start with a commercial adventure, we should make ourselves clear about three basic things:

1. Our product. We know how to produce value.

If we can not provide any value, then what do we expect to get paid for?

2. Our customers. We know who is ready to pay for the value.

If there are no people ready to pay for our value, then where will our revenue come from?

3. Our promotion channels. We know the right way to inform our customers about our product.

If nobody knows about our value, then how could anybody find us?

These are the 3 pillars of any business venture in any industry and company of any size.

In other words – developing a business it is always a development of product, customers base and promotion channels.

Every business consists of product, customers and promotion channels

How to start a company.

We always start with defining our commercial value.

Without detailed knowledge about our value, we cannot understand our customers, neither the right way to address them.

By the value we mean something which can be exchanged for money. We do not mean our personal value as individuals.

Our first value is our skills.

The simplest value to proceed with is our present knowledge and skills.

You know accounting – start an accounting business, you can do coding and programming – become an IT freelancer, you can play badminton – become a coach and start a badminton school.

In this scenario, our commercial value is already ready, we do not need to create it from scratch.

It is also the most affordable option to start with. We do not have to invest additional money into development of a product.

We want to keep it as simple as possible. In this way we considerably increase our chances for success.

Start solely or with a partner.

To start solely or with a partner depends on a specific situation.

Starting alone gives more flexibility and freedom in decision making.

Having a partner increases initial value of a business and significantly helps to reduce the stressload.

Finding a good partner is not that easy, though. There is always a risk of personal mismatch or direct dishonesty.

Still, good and productive partnership will always work better, than dealing with the pressure of entrepreneurship totally alone.

Skillful and reliable partner is always a win

Organise workload properly.

Work is a focused effort to achieve specific results.

Any work can be organised in a form of a task, an event or a project.

We take the work we could think about and organise it into tasks, projects and events. We want to have a clear picture of how our business is working:

• which resources we need;
• how we produce;
• how we deliver;
• how we keep books;
• how we hire & dismiss etc.

The better understanding we have about the work involved, the better quality you can provide. Which is good for business.

For tasks, particularly for recurrent ones, it is very useful to create a step-by-step description of the way to perform them. We call it algorithms.

Work algorithms considerably reduce efforts and bring better results.

Organising is a work on its own and many entrepreneurs tend to skip or reduce it. Still, the stronger organising routine we are able to create and maintain, the further we can reach.

Starting a company is not starting a business.

To finalize, we should mention such step of business organization as establishing a company.

Despite the common misconception – formal establishment of a company has zero to no impact on our value, neither on bringing customers nor creating stable communication.

Starting a company is a legal requirement we have to comply with at some point, but we should not confuse it with starting a business itself.

How to determine our customers.

Our customers are people who want our value and they are ready to pay for it a fair price.

Determining which people are your customers and why exactly they want your value, is something that a smart entrepreneur would do.

If we do not understand our customers, we put our business under serious risk.

We might overlook some crucial details and lose ourselves in a world of illusions. We will expect some customer behavior which in fact will not happen.

By understanding our customers we mean collecting practical data about their needs and characteristics.

Businesses and private people.

First, we clarify the nature of your customers.

Who buys the most: businesses or private persons? These are two very different types of customers and they tend to spend money in a very different way and specific attitude.

If our main customers are businesses, then which size and for which purpose they will use your value: resale, consumption or investment. It will considerably affect their purchase decisions.

Private persons mostly purchase for their personal consumption. In this case, the accessibility and convenience will play a great role. Lots of promising businesses with outstanding products failed only because they were not accessible enough.

Business and private customers expect different approach.

Customers also make decisions based on their specific situation. In some cases, they will value the price, in some cases – quality, in some cases – customer support etc.

It is meaningless to describe to our prospects about high quality and rich functionality of our product, if they care only about price. And vice versa.

Loyal community or random customers?

Another crucial point which we want to clarify is the loyalty of our customers.

Do we target random people, who buy and go. Or are we building a stable community, which stay with us for a long time, buy repeatedly and create personal connections.

It is obvious enough that our business model would work differently in both scenarios. With random people, we should invest into the first impression and be more intense with promotion.

With a long-lasting community, customization for specific needs of particular people and stable communication will play the biggest role.

All customers are people and all people are different.

It is rarely a case that a business has only one specific group of customers which all behave the same way.

Normally, it is a mix of different groups with different needs and attitudes.

So it would be a good practice to create a written description of common groups of customers and record particularities in their behavior.

Keeping records helps a lot in understanding our customers and making correct business decisions.

Detailed records help to make good decisions

How to build communication.

Our value and our customers need to meet each other in the time-space to make to make our business working.

For that purpose we want o build an efficient system of communication: informing people about our value, negotiations, customer support etc.

Basics of sales.

Old school approach is build upon aggressive sales – approaching prospects with an undeniable proposal of your value for a reasonable price.

And this is a wrong approach.

The more pressure we inflict on our customers, the more resistance we will get in response.

It is much easier to sell something that people like and need, than something that they do not like and do not need.

We all like to buy freely, and we do not like to be tricked or suppressed into buying.

Customers should be allowed to make purchase decision, since they are the ones spending their own money.

That is why smart entrepreneur does not develop sales.

Smart entrepreneur develops stable communication.

Sales Funnel & Sales Pipeline are common technics to lead the process of sales.

Communication means exchange of information.

Instead of pushing our prospects, we want to keep them informed and we want to collect data about them.

The more data we collect the closer we get to the transaction itself.

Moreover we can always evaluate our prospects by the way they provide information about themselves.

People with genuine interest will give detailed description about their situation and their needs. While people with no interest will limit communication to short general responses.

Exchange of information leads to exchange of values.

Find the working promotion channel.

We can communicate with our customers in different ways.

We can invest into ads or SEO, send direct messages, list our business on Google Map, make our business location look attractive, spam thousands of accounts with “tailored e-mails” and so on.

At the beginning of our business journey, we never know which channel will work the best for creating stable and meaningful communication.

There are different ways to locate a working channel. We can think logically, make experiments, check similar businesses, ask people with expertise in our industry.

To organise this process we recommend to create a table where on one axis we record all types of our customers and on another axis – possible communication channels.

We take one specific category of customers with one specific promotion channel and exploit it for some time.

Then we evaluate the results and make a decision to proceed with the current option or to try another one.

One way or another, there should be a channel which will draw attention of our customers to our value and create opportunity for stable communication.

Promotion channels – examples from real life.

1. One entrepreneur decided to propose an apartment for short rent in the Old Town of Tallinn. He renovated premises and made announcements on the local real estate platform and Airbnb. During July-September (high season), he got 3 guests who stayed for 6 days in total (out of 92). Things changed after he listed his property on booking.com – even in the low season of October-November he got 60% days booked. Business existed for 4 more years with 85% of bookings coming from booking.com.

2. Another entrepreneur decided to start a legal company and, since she was a smart girl, she made the table of customers and promo-channels as described above. From all the options available, she decided to proceed with big legal companies and address them with a simple e-mail informing about her services and asking for a short meeting. She got enough responses to hold introduction meetings and eventually got requests for legal services. Further promotion happened by writing to the same database and by recommendations of satisfied customers. After a year of running the business, she opened the table again and decided to address agricultural companies with the same e-mail. She sent 400 e-mails and got exactly 0 responses.

3. One lady finished massage school, got her certificate and worked as a massage therapist for couple of years till she decided to open her own parlour. As the main promotion channel, she decided to choose visual announcements placed on the property. So only people who were passing by her place could see the visuals and get informed about her services. Since accessibility was bad, she got 4-5 customers per day in a high season and 1-2 customers in a low season. Business was barely surviving, despite the fact that she provided high quality services. Luckily enough, she got some assistance from an experienced entrepreneur, and they settled an account at Google Map. That happened to be the right move, and now she gets 12-15 customers in a high season and 5-8 customers in a low season.

There is no way to overestimate the crucial importance of the right promotion channel for business success.

Our delightful value and our awesome customers can only find each other via correct and stable communication.

Money is never the issue.

It is difficult to overestimate how common a statement is that money are the main reason for not starting a business.

And it is difficult to overestimate how false this statement is.

Business is never about money.

Foremost, let’s think about the nature and purpose of any business.

And no – it is not making as much money as possible, despite another widely spread misbelief.

The idea of any business is to provide high quality products or services for a reasonable price.

As we already know, business is the process of exchanging values. We provide the value of our product and our customers provide the value of their money in return.

In this respect, each and every business works the very same way.

If our value fits with quality expectations of our customers, and it is reasonably priced, there will always be people willing to make a “money for value” transaction.

Good business creates good value, which can be exchanged for good money.

What money can do and what money cannot do for us.

Imagine, we have One Million Money (OMM).

It is a large amount of money to be honest. If we talk about decent currency, not about coloured paper.

Is it enough to start a business?

Well. No.

One million dollars it is not something bad

We already know that each business stands on 3 pillars:

1. Value.
2. Customers.
3. Promotion channels.

Let’s find out how money could help us here.

Value.

Does OMM mean that we have a value that people are ready to pay for immediately?

Of course not.

Our product might need some investment to be commercially valuable. Still, normally money do not produce value of our business.

Commercial value is produced by the creative and focused work of your team. Value is produced by skills, technologies, diligent people.

Money has nothing to do with that. If we have OMM and we do not have skilled reliable teammates – we do not have value.

Customers.

Can OMM describe to us the people who are ready to start buying our value straight away?

Unfortunately not.

At the start of our business venture we can barely imagine which people will actually become our clients.

Money can neither determine our customers nor affect their purchasing decisions.

Surprisingly enough, skilled teammates can do that.

Promotion channels.

For good promotion, business demands good money.

That is true.

Advertisement is the engine of commerce. Some research shows that the global advertising market size was valued at USD 667 Bln in 2022 and will reach USD 871 Bln in 2028. But.

Would OMM help us to establish meaningful and stable communication – no.

Would OMM help us to actually sell something – no.

Would OMM help us to find the correct promotion channel – no.

This all will only be achieved with our focused and diligent work.

Still, let’s not speak about OMM as if it is something bad.

Some industries have a sort of entrance ticket to be paid for, before we could even start a business.

• For example, in Estonia we have to establish a company with a charter capital of at least One Million Euro, to get a license for fuel trade.
• If we want to open a small coffee-shop selling weed in Pattaya, Thailand, our starting investment would be estimated to be around THB 400K (~10K Euro).

In other words, the amount of money we possess determines the types of businesses we are able to proceed with. The bigger the amount is, the wider is our choice.

But money itself do not determine our current entrepreneurial skills and therefore our ability to start and run a business as such.

If I have no money at all.

If we have no money at all, it does not mean we do not possess any commercial value. It does not mean we do not know your customers. And it does not mean we are not able to build stable communication.

It only means that we are restricted in your business choices. Most likely, we should proceed with our personal knowledge and skills as our major value.

When do not have any knowledge or skills, then we are not ready to start our business. We have not completed our homework.

In this case we should go to the labor market, earn our living, use our free attention to get some useful knowledge and skills.

And by “useful knowledge and skills” we mean the ones which could be exchanged for the value of money.

Lack of money is rarely the main obstacle for starting a business.

Lack of knowledge and skills is.

Our value, our customers and our promotion channels are decisive factors for our business success.

Money can help us, money can spoil us, but money can never do business for us.

One million dollars it is not something bad

ByCycle tool to start our own business.

Each activity is more simple and joyful when we use appropriate tools.

If we want to write a note, we use a pen. If we want to drive a nail, we use a hammer.

If we want to start and run a sustainable business, use ByCycle.

In case you have questions or proposals, feel free to contact us.

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