Thinking of starting your own business? Do you have the right business perspective to take the market by storm? But you've hit a bit of a snag. You don't have any money to invest or any former experience of starting a business. Keep reading to know how you can build a business from scratch with no prior experience.
A Profitable Business Idea
Every business needs an idea that sells to make a profit. Let's look at some creative ways to come up with a fantastic business idea:
Get Ideas from Life or Friends.
Look into the problems you face or talk to your friends and find out what annoys them in their daily life. Make a list of your findings and find solutions for issues you might be able to solve. Several business founders get inspiration from things that frustrate them or their friends.
For example, Travis Kalanick and Garret Camp started Uber when one of their friends complained to them about the hassle of getting a cab in New York City.
Andrew Kortina and Iqram Magdon-Ismail founded Venmo after one of them had trouble paying the other by check.
Chris Riccobono launched UNTUCKit - a line of premium shirts that look professionally untucked after getting frustrated with his wrinkly business shirts.
Look to the Future
As the world changes, people need new technologies and products to make their lives easier. For instance, the rise of ride-sharing apps like Uber, Careem, and Bricklane created a demand for third-party apps that calculate the cheapest fares at an exact moment.
Go online and check out how other startups are doing to get your idea machine into gear. Go to Product Hunt, a website that features curated lists of the newest apps, websites, and games. Or log on to Kickstarter to get ideas on physical products.
Remodel an Existing Idea
You don't always need to develop something brand new to be profitable. Suppose you offer a reconstructed existing product, which is cheaper and better than the current competition. A product that makes a person's life better will always be profitable.
Target a Growing Category
"Focus on categories that are growing well and is receptive to innovation," recommends Stephen Key, a licensing expert, and CEO of InventRIght LLC. Furthermore, picking a category that fascinates you but isn't overly competitive ensures that you don't get lost in the competition.
Meet fellow entrepreneurs at startup events on Meetup or Eventbrite. Networking with entrepreneurs helps build business relationships, find prospective customers, and give you business ideas.
Validate Your Business Idea
Excellent! Now you have a business idea. Don't quit your full-time job yet. Before you decide to be the CEO of your business, you need to determine if people will want your product. (Friends and family don't count).
Here an idea of a Minimum Viable Product (MVP) comes into play. An MVP is the most straightforward, most basic idea of your product or service. An MVP should be functional enough to satisfy early customers and receive feedback.
Let's say you want to create an app for college students to connect with virtual tutors. To get your product off the ground, you need to create a bare-bones version of the app. After creating an MVP, you need to invite a few hundred tutors to join and connect with a local university to get students to join the app. If you get a decent number of signups, it shows that it's an idea to move forward. If you don't get enough signups, you should consider rethinking the concept or start afresh.
Hire A Co-Founder
Conventional wisdom says that a new business owner should look for a co-founder when starting a venture. Having a co-founder makes it easier to get funding. Whether you look for a single large investment or multiple small investments, having co-founders inspires an investors' confidence. Most venture capital investors are reluctant to back solo-founders as it is one of the leading causes of startup failures.
In his blog on the Causes of Business Failure, Paul Graham, the co-founder of Y Combinator, writes, "Have you ever noticed how just one person founded a few successful startups? It seems unlikely this is a coincidence." Running a company is stressful, and having a co-founder in your business matters as you have a partner that looks out for you and provides emotional support. If you're by yourself, you won't have anyone to celebrate when the company achieves a new milestone or survive a setback.
A co-founder provides unique skills, experience, industry knowledge, and connections different from yours. Maybe you're great at the technical stuff, and your co-founder is great at sales. Picking a co-founder who complements you is an excellent way to boost your odds for success.
No Money to Invest?
Every company needs money to run. To fund your startup, consider the options mentioned below.
Ask your Friends and Family to Invest in your Firm.
Many entrepreneurs rely on their family and family for an initial investment.
Apply for a Small Business Grant.
Federal, state, and local governments have funding programs to help small businesses. A grant is the best way to fund your business without the hassle of approaching investors or paying back interest on loans.
Use a Crowdfunding Platform.
GoFundMe, Kickstarter, Indiegogo, Fundable, and other crowdfunding platforms help get backing through an online campaign. This method also enables you to get early product feedback, brand awareness in the B2B sphere.
Use a Credit Card.
Using a credit card is best for quick monetary solutions. However, you must pay credit card bills on time to avoid a negative credit score, impacting future loans.
Get a Microloan.
Approach Microlenders and nonprofit lenders for funding in your first year of business as most banks do not provide loans to early-stage startups. These lenders often seek out disadvantaged entrepreneurs, and their terms are usually very fair.
Self-funding until sales revenue compensates business costs.
Setup Your Business
At one point, you need to decide if you want to incorporate your business.
Once you establish, your business becomes separate from you. From a legal standpoint, it can buy and sell property, incur taxes, sue and be sued, and set up contracts. Choose Commitbiz to incorporate your business anywhere in the world. Are tax havens for your business.
- Incorporation protects you from your business's debts and obligations. Creditors can typically only solicit to repayment from the corporation's assets, not your assets (like your house, bank account, car, etc.).
- You are not legally liable for the company's actions.
- Having incorporation lets you transfer shares. You can sell some of your ownership in a business. If you want to receive external investments or bring a partner on board, you require the expertise to divest.
- A status of incorporation gives you credibility, which helps you attract investors.
- Incorporating can help you deduct business expenses before calculating your yearly tax returns.
Anyone with the right business idea, hard work, and vision can build a successful company. The only question is where to begin.