The world has changed dramatically in the last year, and as a result, many people, both forcibly and voluntarily, have already changed or started thinking about their careers. Maybe this is the time to focus on your growth and realize your dream of how to start a business?
Developing a business is not easy, but it can provide satisfaction, joy and completely change your life. Below, we’ve created a guide to help you understand how to start your own business step by step.
Do your research and choose a business idea
To understand what kind of business you want to start, you must first conduct a detailed research of a potential business idea. Consider aspects such as market demand, target audience, competitors and others.
Also evaluate your existing skills and knowledge and what their role would be in starting and developing your business. It may be worthwhile to gain an in-depth understanding of company management and other areas by investing resources and time in training. Remember that credit for education makes it easier to achieve this goal nowadays !
It is no less important to evaluate what the expenses will be for starting a business, what is the overall picture of the industry and the financial resources available to you.
Target your audience
This is a particularly important step to consider if you want to start your own business. If you don’t know who to offer your product or service to, you won’t be able to take a step forward. Do a thorough market research to find out your target audience, its age, gender, income, level, occupation and other parameters.
Getting to know your audience will allow you to tailor the company’s offerings, as well as ensure that marketing and sales strategies are designed to reach the right people. For example, one of the steps is to understand whether the business to business (B2B) or consumer market (B2C) segment will be relevant to you.
Choose an appropriate company name and logo
Of course, you also want customers to respect and remember your business. The company name and logo will play an important role here. Try to find a name that clearly identifies your field of activity, while being short and easy to remember.
When creating a logo, it is desirable to attract a talented designer or you can do it yourself using online tools such as Canva.
Your goal is to be original, so find out what the names of other companies in this niche are not only in Latvia, but also in other countries.
Create a detailed business plan
A business plan will help you check the relevance of your idea, as well as define it precisely. There are several sample business plans available online for budding entrepreneurs to help you understand what the structure of this document should look like.
When creating a business plan, pay special attention to the research of competitors, as well as SWOT analysis, which assesses the strengths and weaknesses, opportunities and threats of a particular business.
The business plan may also include answers to the following questions:
Choose a business form and register your company
To start a business, it is necessary to choose the most appropriate form of business for you. Detailed information on how to do this is available on the website of the State Revenue Service (SRS) . You will first have to choose whether to do business or any other type of business. Economic operators must register with the SRS, but sole proprietors (IK), partnerships and capital companies (SIA and AS) – in the Register of Enterprises of the Republic of Latvia.
You will then need to select a tax payment method. For the self-employed (natural persons), it is most often a micro-enterprise tax (MUN) or a full regime tax (both mandatory state social insurance contributions (SSIAI) and personal income tax (PIT)). In turn, companies or legal entities are subject to corporate income tax (CIT), as well as PIT and SSIAI. Depending on the type of business, vehicle maintenance tax, real estate tax and others may also apply.
Next, the company must register employees, the workplace and tools, such as a cash register, in the SRS Electronic Declaration System (EDS). Cooperation with the SRS, including company taxes, must also be paid in the EDS system.
In order to register a company, for example, SIA, in the Register of Enterprises of the Republic of Latvia, costs starting from 150 euros must be taken into account. A number of documents must also be submitted, including the decision on incorporation, the articles of association, proof of payment of share capital, a request for payment of share capital and others. You can find more information here how to start your business.
Attracting financing for business
This is a particularly important step, because without stable funding, starting a business is unlikely to succeed. Think about how you plan to raise money for your business. In the beginning, young entrepreneurs often use personal capital, such as savings, apply for state support or apply for a business loan.
But there are other options, such as investors and partners. To attract them, young entrepreneurs need to carefully plan their strategy and find ways to reach these people to convince them of the value of their business idea .
Keep track of your company’s cash flow
Every business operates for profit, which means that financial flow control is an integral part of this process. There are entrepreneurs who start their business with very little capital, but there is also no shortage of those who invest impressive amounts in the business from the beginning to develop the production process, purchase equipment, rent premises and provide other business start-up needs. However, before you spend at least one euro, treat this step responsibly, because you need to understand how you will keep track of your finances.
The organization of accounting should be one of the primary financial objectives. Accurate recording and analysis of all income and expenses will allow you to fit into the set budget, as well as avoid problems related to taxes and other payments. Therefore, carefully choose professional and knowledgeable accountants who will be able to do their job at a high level. These people will probably be the most important elements in the development process of your company.
Build a successful team
Business success is not just about hard work, leadership skills or great ideas. It is also important for the “staff” or people with whom you develop a business idea, work and move forward towards success. The task of a successful entrepreneur is not only to promote your idea and offer it to customers, but also to hire people who will help turn ideas into reality.
The people you may need to open your business are: skilled sales gurus, marketing professionals, IT professionals, financial professionals, and more. Entrepreneurs need to be able to select people in their team who will facilitate the business development process, especially in its early stages.
At this point, you have learned the most important things that new entrepreneurs need to know if they want to open their own company. All that remains is the last step – to allow your goods or services to be available to a wider audience, so that the target audience can see your offer, and the work invested will pay off. Remember that getting started will not be easy, be prepared for the fact that you may need extra funding, work hard and invest a lot of nerves. But in the end, everything will be worth it!