How to start your own business from scratch (complete step-by-step guide)

Start your first business

Starting a business is not only a necessity when for some reason we cannot get a job but also an opportunity to obtain benefits that probably with a job we could never obtain.

Compared to having a job, having a business allows us to have the possibility of having a high income, setting our own hours, using our full potential, and having the satisfaction of having created and carried out something on our own.

If we add to this that today, due to the high rate of layoffs and the instability of pension systems, having a job is no longer something safe as before, starting a business becomes something that we should all consider at some point.

Whether you can’t find a job, you have finally agreed to the advantages of having a business, or you have a revolutionary idea that could change the world, in this complete guide we will show you the steps you must follow to start a business from scratch. and without the need for you to have more prior knowledge.

But also, in case you consider that you do not have much capital or are afraid of losing your money or leaving the security that your job gives you, we will offer you various tips that will help you reduce your investment as much as possible and have a successful business.

Advantages of having a business

If you are already convinced of starting your own business, you can move on to the next subtitle; But if you are not yet, here are the main advantages of having a business compared to having a job, which will convince you:

  • Have high income: with a business you can have high income depending on your ability and effort, unlike a job, where you are limited to the salary that is assigned to you, which is often determined by someone who does not recognize your true performance.
  • A lot of free time: with a business you can have a lot of free time, although as long as you are able to create a business capable of operating efficiently without depending on your presence, unlike a job, where you have to meet your hours of work even after you’ve finished your day’s work.
  • Establish your own hours: with a business you can establish your own hours and thus, for example, start working or stop working when you see fit, unlike a job, where you are subject to the hours established by another person.
  • Being your own boss: with a business you are your own boss, which implies that you do not have to be accountable or give explanations to anyone, unlike a job, where you are under the orders of another person who is sometimes less qualified than your.
  • Use your full potential: With a business you can use your full potential, express all your creativity, and make the most of your skills and knowledge, unlike a job, where you are limited by the routine and the rules established by another person.
  • Have the satisfaction of being an entrepreneur: with a business you can have the satisfaction of having created and carried out something that you started from scratch, unlike a job, where you work in a business that has been created and carried out by someone else.

The vast majority of wealthy people in the world began their path to wealth by creating their own businesses.

How to start a business

Once you know the advantages of having a business compared to having a job, and you have convinced yourself to start your own business, now we present the steps you must follow to start one:

Before learning the steps required to start a business, let’s quickly look at some guidelines that will help you get the most out of this guide:

  • This guide is divided into two parts: the planning stage, which includes the steps related to business planning, and the start-up stage, which includes the steps related to starting the business.
  • you can make use of this guide as you see fit; However, we recommend that you read all the steps in succession the first time, from the first to the last, and then read them more carefully as you apply them.
  • the order of the steps is established in such a way that the guide is easy to follow; however, it is only referential, so you can change it (for example, do step 10 before 9) if your circumstances warrant it, or according to your preferences.
  • the content of each step is summarized in such a way that the guide is easy to read. If you need more information about a certain step, you can click on the different links that you will find in this step so that you will be directed to articles on our site.

Planning stage

In this planning stage, we plan the start-up of our business, but we also check its feasibility; that is, we determine whether the business is feasible (and therefore we should proceed to the next start-up stage), or not feasible (and therefore we should look for new business ideas).

The planning stage begins with the search for a business idea and ends with the development of the business plan.

1. Find your business idea

If you already have your business idea (that is, you already know what business you are going to start) you can go to the next step, but if you still do not have it, of course, the first step to starting a business is to find a business idea.

There are several ways to find a business idea, among which we can highlight:

  • Identify your passion: identify what you are passionate about in life or what you really like to do, and then think of a business where you dedicate yourself to doing it, or that is related to it.
  • Identify your talents: identify where you excel or stand out from others, and then think of a business where you dedicate yourself to doing it, or where you can take advantage of it.
  • Identify your advantages: identify where you have an advantage over other people or companies in terms of abilities, skills, knowledge, experiences and/or resources, and then think of a business where you can take advantage of it.
  • Identify your knowledge and experience: identify what you know or know how to do very well, and then think of a business where you dedicate yourself to doing it, or where you can take advantage of it.
  • Identify a need: Identify an unmet need in consumers, and then think of a business, product or service with which you could satisfy it.
  • creates a new need: think of a product or service that other businesses do not offer and that, due to its novelty and innovation, could be well received by consumers and, therefore, create a new need in them.
  • Identify a problem: Identify a problem with consumers or businesses in your locality, and then think of a business, product or service with which you could solve it.
  • Identify a product that you could do differently or better: Identify a product or service that other businesses already offer, but that you could add something to it that allows you to differentiate yourself or from them, or do it better.
  • Look for lists of business ideas: finally go to websites dedicated to entrepreneurs where you can find lists of business ideas that you can develop or take as inspiration to develop your own ideas, such as our Profitable and Low-Investment Businesses, and Ideas businesses that you can start with little money .

A tip at this point is that your business idea is related to what you stand out or stand out from others since only then will your business stand out from so many competitors that you will surely have.

But, above all, that it is related to what you are passionate about or really like to do, since only then will you be able to have enough motivation to carry your business forward despite all the difficulties that you will surely find along the way.

Keep in mind that to start a business you do not necessarily have to find a business idea that involves starting from scratch, but you could also, for example, buy a business that is already in operation or acquire a franchise.

To learn more about the different ways to find a business idea that exist, you can visit our article: What business to start?; and to learn about various business ideas, you can visit our articles: Profitable and low-investment businesses, and Business ideas that you can start with little money.

2. Do a pre-feasibility study

Once you have your business idea, before going any further, it is recommended that you carry out a pre-feasibility study.

A pre-feasibility study is a small research or market study where market information is quickly collected and analyzed in order to get a preliminary idea of ​​the feasibility of a business idea before moving on to a more formal study.

To carry out the pre-feasibility study you could, for example:

  • visit shopping centers, galleries, market and other places where products or services similar to the one you want to sell are sold, and analyze if there is enough demand for these, or see how many businesses similar to the one you plan to create exist, and analyze how competitive they are .
  • do small interviews with family, friends and acquaintances to find out if they would be willing to purchase the product or service you plan to sell, or entrepreneurs to find out their opinion about your idea and its chances of being successful.
  • make a quick estimate of the resources and knowledge you would need to produce your product or put your idea into practice, and then analyze if you have these or are in a position to acquire them.
  • Go to the Internet and find out how much competition exists for your product, how sought and demanded it is on the Internet, and analyze the web pages and profiles on social networks of the companies that would be your competition.

Once you have done your pre-feasibility study, if you come to the conclusion that your business idea is not feasible, you should look for other business ideas; And if you come to the conclusion that it has a chance of success, you should proceed to carry out a feasibility study.

The feasibility study is a more formal study than the pre-feasibility study, and it is the one that will effectively allow you to know if your business idea is feasible before putting it into practice.

The feasibility study begins with the definition and analysis of the target market and ends with the development of the business plan.

Remember that the objective of a pre-feasibility study is to have a first idea of ​​the feasibility of your business idea, so you should not spend a lot of time doing this.

3. Choose the name of your business

Once you have come to the conclusion that your business idea may be feasible or has a chance of success, the next thing you could do is make one of the most important decisions you must make when starting a business: choosing the name of your business.

To choose the name of your business, the first thing you should do is identify two or more words that are related to it, and that you would like to include in the name; For example, if you are going to create a taxi company, and you would like to highlight the safety of your services, you could name it “Safe Taxi”.

But in addition to words that are related to your business, other considerations that you should take into account when choosing the name of your business are:

  • Personal tastes: the name you choose for your business will be something that will accompany you for as long as it lasts, so you should choose a name that is to your liking and with which you feel a certain affinity.
  • Positive image: you should also choose an attractive name that generates a positive image, and that does not have a negative connotation or mean something bad in any language or culture.
  • Informative nature: it is recommended that the name not only be related to your business, but also that it communicates or transmits something that you would like to highlight from it.
  • Easy pronunciation: it is also important that the name of your business is preferably short and easy to pronounce and remember.
  • That it is not registered: in order for you to be the only one who can use it, you must make sure that the name you have in mind is not already registered by other businesses.
  • Internet domain available: taking into account that today it is essential that your business has a website, you must also make sure that there is a domain available for the name you have in mind.

To get ideas for the name of your business, you could look at the names of your competition and pay attention to the ones you like the most, or go to business directories on the Internet that are the same type as your business, and look for names that serve as inspiration.

If you find it difficult to find the ideal name for your business, keep in mind that there are specialized companies that you could hire to help you with this task.

4. Choose the location of your business

Unless you already have your own premises or are going to start your business at home or on the Internet, once you have chosen the name of your business, the next thing you could do is choose the location of your business.

To choose the location of your business, the first thing you should take into account is your type of business; For example, if you are going to set up a retail business such as a clothing store, you should look for a commercial area; but instead, if you are going to start a manufacturing business, you should look for an industrial zone.

The 3 keys to the success of a retail business: location, location, location.

But in addition to your type of business, other factors that you should take into account when choosing the location of your business are:

  • Public influx: in general, in the case of a retail business, the greater the influx of public in the area, the greater the chances that the public will visit it.
  • Visibility: in general, in the case of a retail business, the better visibility you have, the greater the chances that the public will visit it.
  • Accessibility: you must ensure that the location of your business is easily accessible; that is, it has easy access routes or sufficient access routes for your customers and / or suppliers.
  • Easy location: you must also make sure that your business is easily located by your public, that the street is easily located on a map, and that there are close and known references.
  • Consumers: in general, the closer a business is to where the consumers that make up its target audience live, work or frequent, the more likely they are to visit it.
  • Competition: in general, locating a business far from the competition helps prevent it from taking customers away; But in some cases, locating it close to competing businesses makes it possible to take advantage of the influx of people generated by other businesses or the existing cluster.
  • Environment of the area: you must make sure that the area and the surroundings have a pleasant atmosphere and in accordance with the concept or style of your business.
  • Infrastructure of the premises: you must also make sure that the premises have the necessary elements for the proper functioning of your business, and with enough space so that you can operate efficiently.
  • Local parking: you should also make sure that the local has enough parking spaces or parking lots for the vehicles of your clients and your workers.
  • Local costs: in general, the more central or more commercial the area where a store is located, or the greater the influx of people into it, the higher the cost of the store (cost of sale or rent).
  • License: finally, you must make sure that you will be granted the operating license for the type of business you are going to put up.

To find locations for your business (premises or offices for sale or rent), you could go to websites specialized in the purchase and sale of real estate, or to the classified ads of the newspaper, or visit the areas where you would like your business (for example, areas where there are businesses similar to yours).

Not only if it is purchased, but also if it is rented, a large part of the investment of a business is usually made up of the place where it will operate, so if your objective is to reduce your investment, you should make sure to look for a place whose price of purchase or rent is not so high.

To reduce your investment, it is recommended that you look for a place whose location is not so central, but neither that is so far from commercial areas; although keep in mind that if you are able to offer a good quality product or service, and you do an adequate promotion, consumers will visit you wherever you are.

If despite taking the above into account, it is difficult for you to find a place whose purchase or rental price is not so high, you could consider the following alternatives:

  • Set up your business at home: depending on your type of business, the location and other conditions of your home, in order to save on the purchase or rental of a premises, consider the possibility of setting up your business at home.
  • Set up your business on the Internet: depending on your type of business, in order to save on the purchase or rent of a premises, but also on products (since you would not have to have these physically at the time of selling them), also consider the possibility to set up your business on the Internet.
  • Set up your business in a stand or stand: instead of looking for a place, consider the possibility of setting up your business in a small stand or stand (for example, located in a gallery or market), or even in a vehicle where you can sell your product.
  • Partner with another entrepreneur or businessman: also consider partnering with another entrepreneur or businessman who sells similar or complementary products to yours to rent together (and, therefore, share) the same premises, stand or stand.
  • Rent a small space within a premises: consider renting a small space within the premises of an established business that sells complementary products to yours, for which it is not necessary to wait for the owner of the premises to rent a space within your premises that you are not using or are not being well used, but you could propose it yourself.

5. Define your target market

One of the most important steps in starting a business that many entrepreneurs often overlook is defining you target market; that is to say, the set of consumers to which they will be directed.

Clearly defining your target market will allow you to adapt your product and orient your marketing efforts to the consumer that makes it up, and thus achieve greater efficiency than you would if you were targeting all the consumers that exist for your type of product.

For example, by defining your target market, you will be able to design a product that adapts to the tastes and preferences of the consumer that makes it up and, therefore, a more effective product than one aimed at all consumers that do not take into account tastes and preferences. of none.

To define your target market, it is recommended that you first segment the total market that exists for your type of product in different homogeneous markets made up of consumers with similar characteristics, and then choose the most attractive one from among the resulting markets to enter.

Some examples of target markets are:

  • women 18 to 35 years of age with an average income of $500 to $1,500.
  • Internet users looking to learn how to start their own businesses.
  • young students who tend to frequent discos and bars.
  • older adults who do not have family members with enough time to care for and care for them.

One piece of advice at this point is that you define a target market that is not so broad since it would practically be as if you had not defined it; but not so specific either, since it would not be a market with enough buyers and, therefore, a sufficiently profitable market.

6. Analyze your target market

Once you have defined your target market, the next step is to analyze it.

The idea that you analyze your target market is that you better know the characteristics of the consumer that makes it up; but also that you have an idea of ​​how willing they would be to acquire your products or services.

By knowing its characteristics better, you will be able to make decisions or formulate marketing strategies that may have better results in it; for instance:

  • design the product that best suits your tastes and preferences.
  • set the right price taking into account your financial capacity.
  • use the points of sale that are most accessible to them.
  • write the advertising message that can have the greatest impact on it.

And by having an idea of ​​how willing they would be to acquire your products or services, you will be able to have an idea of ​​the feasibility of your business idea, in addition to helping you with the forecast of your sales (which you will develop at the time of making your projection. income and expenses).

To collect information from the consumer that makes up the target market that allows you to analyze it, you could use one of the different market research techniques that exist.

For example, you could do a survey where you ask questions such as:

  • Do you use this product?
  • What are your favorite models?
  • What features would you change or add to it?
  • How much do you usually pay for it?
  • Where do you usually buy it?
  • Would you be willing to try a new brand?

Or, for example, you could use the observation technique and go to the places where your type of product is sold, and observe the products they look for the most, the questions and objections they make to the sellers, the products they finally buy, etc.

The analysis of the target market is something that you should do permanently and not only when you start your business, especially in today’s changing world where the needs, tastes and preferences of consumers are constantly changing.

7. Analyze your competition

In addition to analyzing your target market, it is also important that you analyze your future competitors; that is, the companies that will compete with you.

The idea that you analyze your future competitors is that you can get to know them better; but also that you know if you are really in a position to compete with them.

By knowing them better, you will be able to make decisions or formulate strategies that allow you to compete with them in the best possible way; for instance:

  • lower your prices if you have discovered that they are unable to keep their prices low due to their high operating costs.
  • Focus on the design of your products if you have discovered that the design of their products is not the best.
  • improve your customer service if you have discovered that they provide poor customer service.
  • Take as a reference the advertising strategies that they are using and that are giving them good results.

And by knowing if you are really in a position to compete with them, you will be able to have an idea of ​​the feasibility of your business idea, in addition to also helping you with the forecast of your sales (which you will develop when making your income projection and expenses).

To collect information from your future competitors that allows you to analyze them, you could also use one of the different market research techniques that exist.

For example, you could use the observation technique and visit their stores to observe their processes or the attention they provide to their customers or buy their products to be able to analyze them better; or do small informal interviews with people who work or who have worked with them, or some of their clients.

Competitor analysis is something that you should do permanently and not only when you start your business, especially in today’s competitive world where companies launch new products to the market with increasing frequency, and where more and more companies appear. competitors.

8. Calculate your investment

Once you have analyzed your future competition, the next thing you could do is calculate your business investment; that is, calculate the capital or money that you will need to start it up and make it work during the first months of life until it generates enough income so that it can continue operating without requiring more investment.

Calculating the investment of your business will allow you to know how much capital or money you will need to start your business and, taking into account the capital or money you have or to which you can access, to know in part the feasibility of your business.

To calculate the investment of your business, you must first make a list of all the elements that will be part of your investment, along with their respective monetary values.

Some of the elements that you should include in this list are:

  • furniture and fixtures (tables, chairs, desks, shelves, computers, printers, telephones).
  • machinery and equipment (production machines, drills, lathes, welders, tools).
  • conditioning of the premises (remodeling, installations, painting, finishes, decoration).
  • constitution and legalization expenses (legal constitution, obtaining licenses and permits, registrations).
  • Start-up expenses (search, selection and training of personnel, opening marketing, promotion and advertising).
  • supplies, products for sale, packaging.
  • basic services (water, electricity, telephone, Internet).
  • remunerations (wages and salaries).
  • advance of the rent of the premises.
  • insurance.

Once you have your list of the elements that will make up your investment, you must add the monetary values ​​of each element, and the final result will give you the value of your investment.

When starting a business it is common that the real investment, due to hidden costs and other unforeseen events, ends up being greater than the one initially calculated, so when calculating your investment it is recommended that you add a small capital to your investment list of emergency that you can use before any unforeseen event.

However, before adding a small emergency capital to your investment list, to avoid that in the end you end up lacking capital, you must ensure that the calculation of your investment is the most accurate possible, making sure to include in your list all the elements that They will be part of your investment, and calculate the most accurate possible value for each one.

Another tip related to the calculation of the investment is that you try to make your investment as low as possible, but without this meaning that you have to sacrifice the quality of your products or services, or get to the point of giving the image of a poor business and austere.

Some tips that will help you reduce your business investment are:

  • Buy only what is strictly necessary: avoid getting carried away by the natural emotion that comes with starting a new business, which makes us want to buy everything that is within our reach, and buy only what you really need.
  • Search and compare well prices: avoid buying the first thing you find and compare well prices before buying, for example, in the case of machinery, equipment and furniture.
  • rent instead of buy: whenever possible rent instead of buy, for example, in the case of the premises or office, and some machines, equipment and furniture.
  • make agreements with suppliers: for example, to provide you with machines, equipment or furniture in exchange for keeping the advertising included in these assets, or working exclusively with them.
  • Offer few products or services: Start by offering few products or services in order to reduce your production costs (later, as your capital increases, you could increase the supply of these).
  • simplify your business process: for example, have your products manufactured to third parties, sell through intermediaries, or take orders or sell only through the Internet in order to reduce your operating and personnel costs.

The calculation of the investment of a business is usually specified in the business plan, so you can find an example of how to do this calculation in our article: What is a business plan and how to make one?, specifically in the section: The study of investment and financing.

9. Project your income and expenses

Once you have calculated the investment of your business, the next thing you should do is a projection of the income and expenses that your business will have for a certain period of time, which is usually 1, 3 or 5 years.

Making a projection of the income and expenses that your business will have will allow you to know the viability of your business (if future income will be greater than future expenses), its future earnings or profits (the difference between future income and future expenses), and its profitability (the relationship between profits or profits and investment).

To make the projection of the income that your business will have, basically you must make a forecast of the sales that it will have.

To forecast your future sales, you could include some questions in your target audience analysis survey to help you with this task, such as, for example:

  • Would you be willing to try this new product?
  • How much do you usually pay for similar products?
  • How much would you be willing to pay for it?
  • How often do you buy similar products?

But in addition to the survey, you could also use the observation technique and visit the stores of your future competitors and calculate the average number of customers they have as well as the average consumption that each one makes.

While to make the projection of the expenses that your business will have, you must make a forecast of the costs and expenses that it will have.

In the case of costs, you must consider the costs associated with the manufacture of the products (in the case of a business dedicated to the manufacture of products), with the purchase of the products (in the case of a business dedicated to the purchase and sale of products), or the costs associated with the provision of services (in the case of a business dedicated to the provision of services).

While in the case of expenses, you must consider sales expenses (salaries of sales personnel, advertising, packaging, transportation), administrative expenses (salaries of administrative personnel, rent of the premises, office supplies and supplies, insurance, taxes, basic services), and financial expenses (interest payments).

Making a forecast of the income and expenses of a business (especially that of income) can sometimes be a complicated task; However, to avoid future problems, you should try to make the most accurate forecast possible, avoiding being carried away by the natural emotion that comes with starting a business, which makes us want to overestimate future income and underestimate future expenses.

The projection of the income and expenses of a business is usually specified in the business plan, so you can find an example of how to make this projection in our article: What is a business plan and how to make one?, specifically in the section: The study of income and expenses.

10. Make a business plan

It does not matter if it is a large company or a small business, an important step that every entrepreneur should do when starting a business is to make a business plan.

Making a business plan is what will ultimately allow you to check the feasibility of your business idea and, therefore, know if you could put it into practice or should you look for other ideas; But it will also allow you to have guidance to start and manage your business and, in case you are looking for financing, demonstrate the attractiveness of your idea to banks, lenders, investors or potential partners.

Some of the elements that you should include in your business plan are:

  • The definition of the business: the basic data of the business (name, location, type of company), the description of the business and the products or services that you are going to offer, the business objectives and the strategies that will allow you to achieve them.
  • The analysis of the target audience: a summary of the analysis of the target audience that you have previously carried out, including the main characteristics of your target audience and the conclusions you have reached.
  • Competitor analysis: a summary of the competitor analysis you have previously carried out, including the main characteristics of your future competitors and the conclusions you have reached.
  • The technical study: the physical requirements necessary for the operation of the business, the description of the production process, and the description of the business premises, the production capacity and the plant layout.
  • The organization of the business: the legal and organic structure of the business, the areas or departments, the positions and functions, the personnel requirement, the personnel expenses and the information systems.
  • The calculation of the investment: the investment that you will need to start the business according to the calculation of the investment that you have previously made, and the sources of financing that you will use.
  • The projection of income and expenses: the projection of the income and expenses that you have previously made, including the projected cash flow and the projected income statement.
  • Financial evaluation: the financial evaluation of the future business taking into account the required investment and the projection of income and expenses, including the investment payback period, and the profitability of the future business.

It is often thought that making a business plan is a complex task; But the truth is that it is a task that anyone can do if they know the parts or sections that make it up, know their business idea well, and always bear in mind the objectives of the plan when preparing it.

When making your business plan, it is not necessary that you make a complex business plan of more than 200 pages full of details that probably nobody will read, but a simple business plan that simply allows you to meet the objectives of the same, either know the feasibility of your business, have a guide for its start-up, and/or present it to third parties.

Start-up stage

In this start-up stage, we put into practice all those aspects that we have indicated in our business plan that are necessary to start our business, but also other aspects that we might not have included in the plan.

The start-up stage begins with the purchase or rental of the premises where the business will operate and ends with the opening of the business.

11. Seek financing

The ideal thing when starting a business is that all the investment is made up of own capital, and later when the business begins to grow, just look for financing; But if the capital you have available is not enough to cover the investment, and you do not want to miss the opportunity to have your own business, you should seek financing.

looking for financing

The first sources of financing that you could turn to are your family and friends, who could lend you the money you need without charging you interest or pressuring you to pay it back quickly; But if you don’t have family or friends who can lend you money, or you just don’t want to bother them, you should go to other sources of financing.

In addition to family or friends, other sources of financing that you could go to finance your business are:

  • Banks: banks are a source of financing commonly used by entrepreneurs; However, it is difficult for a bank to loan you money for a new business, especially if you do not have a good credit history.
  • Financial institutions aimed at SMEs: an alternative to banks is financial institutions aimed at small and medium-sized companies, which are usually more accessible than banks, but lend a lower amount and charge more interest.
  • Partners: looking for a partner is looking for a person who is interested in investing in your business and working with you in its creation and growth, in exchange for sharing ownership of the business and receiving a percentage of the profits it generates.
  • Investors: looking for an investor is looking for a person who is interested in financing all or part of the investment of your business, in exchange for receiving a percentage of the profits that it generates.
  • Contests: contests on business plans or ideas organized by government agencies, universities or other entities dedicated to supporting small and medium-sized businesses, where the best business plan or idea is awarded with full or partial financing of the business.

If you go to a bank or financial institution to get a loan, keep in mind that assuming a debt implies a risk and a great responsibility, so before requesting the loan make sure that you really need it, and that you will be able to pay it in a timely manner.

Another tip is that you take your time looking for and analyzing the different financial offers that exist in the market, and once you choose one, make sure that it is regulated by the corresponding government body, analyze the loan conditions well, and read the loan carefully. contract before signing.

Banks are usually the source of financing most used by entrepreneurs; However, it is difficult for a bank to loan you money to start a business, even when you have an attractive business idea and a solid business plan to back it up.

So if you are looking for a loan for your business, keep in mind that today there are non-bank financial entities specialized in small and medium-sized companies that could lend you the money you need.

Some requirements that these financial entities could ask of you are a business plan, one year of experience in the type of business you want to start (one year of previous experience in a company equal or similar to the one you want to create), and assets in guarantees for a value equal to or greater than the loan amount.

In addition to asking you for fewer requirements than banks, another advantage of these financial institutions is that many of these provide you with advice to determine how much capital you need, and later, to create and manage your business.

The downside is that the amount they lend is usually small compared to what banks could lend you (although it is usually more than enough for the creation of a small business), and the cost of borrowing is usually high.

12. Buy or rent your premises

Once you have chosen the place where your business will operate, if you have not already done so, the next thing you could do is buy or rent it.

If you still have doubts about whether to buy or rent a premises, keep in mind that buying a premises allows you to own a tangible asset that you can take as a long-term investment, and that you can sell at any time (for example, in the event that your business does not prosper), as well as having greater control over the premises (for example, to do all the remodeling you want), but it requires a high initial investment.

The usual thing in the case of a single entrepreneur or a small business is that buying a premises is out of their reach.

While renting a premises allows you to considerably reduce the initial investment, but requires that you have to pay a constant high amount as rent, and do it for the entire period of the rental contract even if you close your business earlier.

In general, the ideal would be to buy premises, but if you do not have enough capital to do so, renting premises is also a good option:

In case you choose to rent a premises, in addition to the rental price, other aspects that you should consider in the rental contract are:

  • Duration of the contract: in general, it is recommended that you sign a contract of at least two years renewable, in order to ensure that you do not have to vacate the premises so quickly in case the owner does not want to renew the contract.
  • Possibility of selling the business: in order to minimize the losses you may have if your business does not prosper, try to include in the contract a clause that gives you the possibility of selling or transferring the business to a third party.
  • Possibility of transferring ownership of the contract if you sell the business: likewise, in order to minimize losses, also try to include in the contract a clause that gives you the possibility of transferring the contract to the new owner in the event that you sell your business.
  • Agreements on works and improvements: finally, make sure to include in the contract the agreements that you have reached with the owner of the premises regarding the execution of works or improvements in it; for example, about which ones you can do and which ones the owner of the premises should do.

One piece of advice at this point is that you hire a lawyer with experience in the matter to advise you on the rental of the premises; but above all, to help you avoid making mistakes when signing the rental contract, as well as to get the best possible conditions.

Another tip is that you not only study the rental agreement well before signing it but also investigate the landlord (for example, investigate his police and credit history), in order to avoid any inconvenience that may arise later.

13. Remodel and decorate your premises

Once you have bought or rented a place where your business will operate, you must remodel it to suit your type of business, and then decorate it according to the concept or style that you want to give it.

To remodel your premises, unless you are an engineer with experience in the field, it is recommended that you hire the services of a professional to help you with this task, and if possible also hire the services of an interior designer who has experience. in the type of business, you are going to start.

If your goal is to reduce your investment, when looking for a place for your business, in addition to its purchase or rental price, you should also take into account the remodeling that you would have to do to adapt it to your business.

While decorating it, you could also choose to hire the services of an interior designer preferably with experience in the type of business you want to start, to help you with this task; However, unlike a shop remodel, decorating a shop is not something you can’t do if you have enough creativity.

It is often thought that to make a good decoration it is necessary to invest a good amount of money, but the truth is that it is also possible to make a good decoration with a small budget.

  • use plants: place, for example, pots made of plastic or other inexpensive material at the entrance or in the corners of your premises, or small pots in the windows.
  • exhibit the works of local artists: contact local artists and propose to exhibit their paintings, sculptures or crafts in your premises in exchange for the promotion they would have.
  • Use inexpensive decorative items: Go to places such as flea markets, thrift stores, and yard sales where you can find inexpensive decorative items.
  • use common objects: there are common objects such as antique equipment and furniture, bottles and even stones that, when used well, can perform the function of decoration well.
  • Stick decorative material on the walls: stick decorative material such as posters, posters, decorative papers, decorative vinyls, stickers or colored ribbons on the walls.
  • paint the walls with decorative motifs: paint the walls with decorative motifs such as words, quotes or a drawing related to the theme of your business.

When decorating the premises of your business, always keep in mind the principle of all good decoration, which is to combine decorative elements in a harmonious way capable of projecting the concept or style of the business.

14. Buy and install your machinery, equipment and furniture

Once you have remodeled and decorated premises, the next thing you could do is buy the machinery, equipment and furniture that you will use to run your business, and then install them.

As we have already mentioned, to save on these assets, and thus be able to reduce your investment, you must buy only what is strictly necessary, avoiding being carried away by the natural emotion that comes with starting a new business, which makes us want to buy everything we need. is within our reach.

Likewise, you should avoid acquiring the first machines, equipment, or furniture that you find, and rather take your time, research the market and compare prices well, bearing in mind that it is common for the same machine, equipment or furniture to be sold in one place. , is sold in another at a much lower price.

To look for these assets at good prices, you could ask other entrepreneurs or businessmen with experience in your type of business where you can find them, and/or go to the Internet and, for example, look for these in your search engine or consult them in specialized forums directed to your locality.

In addition to buying only what is strictly necessary, and looking for and comparing prices well, other tips to save on the purchase of machinery, equipment and furniture for your business are:

  • rent instead of buy: rent instead of buy, for example, in the case of the machines necessary to produce your products, some furniture such as tables and chairs, or even the computer where you will work.
  • buy used machines, equipment and furniture: buy used machines, equipment and furniture in some cases, always making sure that they work well and look good in case they are going to be in public view.
  • make agreements or exchanges with suppliers: for example, if you are going to set up a restaurant, look for suppliers that supply restaurants with drink dispensers, tables, chairs, napkin holders, glasses and cup holders, in exchange for keeping the advertising included in these assets, or exclusively use or sell your brand or your products.
  • use little furniture: for example, if you are going to set up a clothing store, use few windows and mannequins, although always making sure to give your place a good decoration despite having little furniture.

If your objective is to reduce your costs, when buying the machinery, equipment and furniture for your business, in addition to the price, you should also take into account the expenses that you would have to make after the purchase, such as expenses on spare parts or in maintenance.

15. Search and select your providers

Once you have purchased and installed the machinery, equipment and furniture for your business, the next step you could take is to find and select the suppliers that will provide you with the supplies, products or services necessary for the operation of your business.

To search for suppliers, you could ask other entrepreneurs or businessmen to recommend theirs or tell you where you can find them, go to the Internet and search for them on Google, in supplier directories or in the yellow pages, visit commercial areas or wholesale markets, or attend to fairs or specialized exhibitions in the sector of your business.

While selecting the suppliers with whom you are going to work, you should take into account mainly the quality of their inputs, products or services, and their prices; but also other factors such as:

  • payment facilities: the payment facilities that they offer you, if they ask you to pay in cash or give you the possibility of paying them on credit.
  • Delivery times: the time that elapses from when you place your orders until they are delivered to you.
  • Supply capacity: the greater the supply capacity they have, the greater security you will have that they will be able to supply you with your orders in a timely manner.
  • guarantees: the guarantees they offer you and the duration of these.
  • discounts: the discounts they offer you; for example, by volume of purchase or by prompt payment.
  • agreements or exchanges : the agreements or exchanges offered to you; for example, to supply you with machines, equipment, furniture or fixtures in exchange for keeping the advertising placed on these assets, or exclusively selling their brand or products.
  • experience and reputation: your experience in the market, and the references or testimonials that exist from your clients.

One piece of advice at this point is that you always have the contact details of several suppliers at hand in case the supplier you work with at some point cannot cope with your orders, or cannot meet the deadline. delivery you require.

16. Search, select and train your staff

Once you have searched for and selected your suppliers, the next step you could take is to find and select the staff you will hire to help you run your business, and then train them.

To search, select and train personnel for your business, it is recommended that you follow the following process:

  • Definition of the applicant’s profile: defines the competencies or characteristics (for example, knowledge, experience, abilities, skills, values, etc.) that a person must fulfill in order to apply for each of the positions that each of the areas will have of your business.
  • Search for applicants: search or recruit people who meet the profile you defined in the previous step; for example, by asking family, friends or acquaintances of trusted and trained people for recommendations, or by posting ads on Internet job sites such as Bumeran and CompuTrabajo, on Internet classifieds sites such as OLX and Locanto, or in the section of newspaper jobs.
  • Applicant evaluation: evaluate the applicants you have recruited in order to choose from among all of them the most suitable for the positions you have available; for example, through knowledge tests and interviews.
  • Selection and hiring of applicants: select the applicants who have had the best performance in the tests and interviews you have carried out, and then proceed to sign a contract with them.
  • Induction and training of personnel: finally, try that the new personnel adapt as quickly as possible to your business (for example, telling them where they can find the necessary tools for their work, and introducing them to their new colleagues), and train them to have perform well in their new positions.

A tip to reduce your personnel costs is that you try as much as possible to hire independent workers or freelancers instead of hiring permanent workers who work full time in your business; for example, in the case of your accountant or your manager of social networks or community manager.

Another tip to reduce your initial costs is that you consider starting by hiring salespeople who, instead of paying them a salary, you pay sales commissions (a percentage of the sale of the products they make or the orders they get).

A good accountant will not only help you with the accounting of your business and file your taxes but also with the planning and financial analysis of your business, so even if it is an external accountant make sure you hire one with experience.

17. Formalize your business

Another important step that every entrepreneur must take when starting a business is to formalize it; that is, to legally establish it.

It is possible to start a business without having to formalize it, as some people do to avoid paying taxes, or the paperwork and expenses that this implies; But the truth is that if you also choose the path of informality, you will not be able to benefit from all the advantages that come with having a legally constituted business.

Legally establishing your business will allow it to be legally recognized and thus, among other things, that you can qualify as a credit subject, issue payment vouchers, and produce, sell and promote your products with authority and without restrictions.

The following are the steps necessary to formalize or legally establish a business (keep in mind that these steps vary according to the country where you are going to establish your business, so you should only take them as a reference):

  • Determine if you are going to establish it as a Natural Person or as a Legal Person: the main difference between these entities is that as a Natural Person you personally assume all the business obligations, while as a Legal Person it is the business that assumes its own obligations.
  • Choose the type of company or partnership: depending on the legal status you have chosen, the number of partners your business will have and other factors, you must determine if your business will be, for example, an EIRL, an SRL, an SA, etc.
  • Search and reserve the name in Public Registries: if you are a legal entity, you must go to the Public Registries office, verify that there is no name or company name equal or similar to the one you want for your business in the market, and then reserve it.
  • Prepare and raise the minute to a Public Deed: in case of being a legal entity, you must prepare the constitution minute with the help of a lawyer, and then take it to a notary public to review it and raise it to Public Deed.
  • Register the Public Deed in Public Registries: in this step you must take the Public Deed to the Public Registries office where the necessary procedures will be carried out to register your business in the Public Registries.
  • Choose the tax regime and obtain the taxpayer code: finally, you must choose the tax regime to which you are going to accept for the payment of taxes, and then go to the tax office to process the obtaining of your taxpayer code.

If you consider that legally formalizing a business is a tedious or expensive task, keep in mind that there are centers or institutions dedicated to supporting entrepreneurs that can help you carry out all the necessary procedures for it, in a short time and at a low cost, and that you will surely find in your locality.

18. Obtain your operating license

In case your business is going to have commercial premises, in addition to formalizing it, you must also obtain an operating license or municipal license so that it can operate.

The following are the steps necessary to obtain an operating license (keep in mind that these steps vary depending on the country or municipality where you are going to open your business, so you should only take them as a reference):

  • Go to the municipality of the district where your business premises will be located.
  • Submit the required documentation (which varies depending on the municipality in question, and you will surely be able to find out what it is on their website).
  • make the corresponding payment to obtain your operating license.
  • Fill out and submit an application for an operating license.

A tip at this point is that before acquiring the place where your business will operate, make sure that they will give you the operating license, taking into account that it is common for entrepreneurs who after having invested time and money in setting up their business, they are surprised that for some reason they do not want to give it to them.

Depending on the type or line of business of your business, keep in mind that in addition to the operating license, you may also need other special permits to be able to operate your business, such as permits to sell certain types of food.

19. Register your brand

In case you are going to create a brand for your products or services, in addition to obtaining your operating license, you must also register your brand so that others cannot use the same or similar one, or copy it in order to take advantage of your reputation.

The following are the necessary steps to register a trademark (keep in mind that these steps vary depending on the country where you are going to register your trademark, so you should only take them as a reference):

  • Go to the trademark and patent office (the name of this office may vary depending on the country where you are going to register your trademark).
  • do a trademark background search to make sure others have not registered a trademark the same or similar to the one you want to register.
  • make the corresponding payment to register your brand.
  • Fill out and submit a trademark registration application where, among other things, you specify the name of your brand and the products or services that it will identify.

One piece of advice at this point is to hire a trademark and patent attorney to help you carry out these procedures and, above all, to help you make sure that there are no registered trademarks equal to or similar to the one you want to register.

20. Promote your business

Once you have everything ready for the operation of your business, before its opening it is recommended that you promote this, but also that you prepare the promotion that you will carry out once you have opened your business.

The objective of promoting the opening of your business is to let as many consumers as possible know that you are going to open a business soon, that a “rumor” about your business is generated, and that expectations are created for it and for the products or services that you are going to offer.

Some strategies to promote the opening of your business that you could use are:

  • Organize an inauguration: organize an inauguration event for your business where, for example, you exhibit or give to try your products or services (if you do not have experience in organizing events, you could hire an event organizer with experience in the subject to help you with this task).
  • Send invitations for the opening of your business: send invitations by email or postal mail for the opening of your business to family, friends, acquaintances or potential clients, in case you are going to make one.
  • create sales promotions for opening : create and communicate sales promotions for the opening of your business, such as discounts for your first customers, or discounts on all your products during your first month of operations.
  • place posters or posters on the facade of your store: place posters or posters on the facade of your business premises that announce the soon opening of your business, your main products or services, and the sales promotions that you will offer for the opening of your business.
  • distribute flyers or brochures  distribute flyers or brochures where you also announce the soon opening of your business, your main products or services, and the sales promotions that you will offer for the opening of your business.

On the other hand, the preparation of the promotion that you will carry out once you have opened your business aims to have everything ready to promote your business once it happens.

Nowadays, the first thing people do when they want to buy a product or service is to go online to find information about it, find out where they can buy it and compare prices, so the first thing you should also do to promote your business is creating a web page for you.

To create a web page for your business you could use one of the different platforms to create web pages that exist on the Internet, which help you create one easily and, in some cases, for free (you can find a guide to create a web page with the help of one of these platforms in our article: How to create a web page step by step).

However, if you do not have enough time to create your website yourself, remember that you always have the possibility of sending it to a freelance designer that, for example, you could find on sites for freelancers such as Freelancer, TrabajoFrelance and Fiverr.

In addition to creating a web page, other actions that you could take to promote your business are:

  • create a Facebook page: depending on your type of business, a Facebook page can be as or more effective than a web page when it comes to promoting your business, but as long as you regularly publish content of interest to your audience and constantly interact with it (you can find a guide to create a Facebook page in our article: How to create a Facebook page step by step).
  • create a YouTube channel: also depending on your type of business, a YouTube channel can also be an effective means to promote your business, but as long as you regularly upload videos of interest to your target audience capable of generating a good amount of reproductions.
  • Design and print flyers or brochures: have flyers or brochures designed and printed that include the description of your main products or services, your main sales promotions, and your contact information, and that you would then distribute to the people who pass through the front of your local, around it, or in the areas where your target audience frequent.
  • Make alliances with other businesses: make alliances with other businesses that preferably target the same type of target audience, but that are not your direct competition, so that they help you promote your business in exchange for you also promoting them or provide any other benefit.

In addition to the ways of promoting a business that we have mentioned, keep in mind that the most effective way to get customers is to offer a very good quality product or service capable of making the customer not only buy or visit you again but also recommend you to other consumers.

Once you have opened your business, an effective way to get your first customers is to advertise your website through the Google Ads advertising program, which allows you to serve ads in Google search results and pay only for the clicks they receive.

21. Opening your business

Finally, after a long planning and execution process, and having overcome various problems, difficulties and unforeseen events, the long-awaited day of the opening (or inauguration in case you have planned one) of your business has arrived.

On this day you must coordinate well with your staff the functions or tasks that they must perform, ensure their good performance, and correct all the mistakes that both your workers and you will surely make on this first day of operations.

And then, strive every day to grow your business, make sure you always maintain the quality of your products or services and always provide excellent customer service that not only makes your customers buy or visit you again but also recommend you to other consumers.

Tips for starting a business with little capital

It is often thought that to start a business it is necessary to have a good amount of capital; But the truth is that it is also possible to start a business with little money without this meaning that the business cannot become quite profitable.

As a complement to our guide to starting a business, in this section, we provide you with some tips that you can follow to start a business with little capital or money.

Set up your home business

In order to save on the purchase or rent of premises or office, and thus reduce your investment, consider the possibility of setting up your business in your home.

If your house is not located in a commercial area or on a street with a good influx of public, keep in mind that if you are able to offer a product or service of very good quality, and you do an adequate promotion, consumers will look for you wherever you are. They are, and that if you set up your business at home, it does not mean that later on, you can move to a local.

If your home is not located in a commercial area or on a street with a good influx of people, keep in mind that if you are able to offer a product or service of very good quality, and you do an adequate promotion, consumers will look for you wherever you are. They are, and that if you set up your business at home it does not mean that later you can move to a local.

Trade over the Internet

To reduce your costs and, therefore, your investment, also consider the possibility of operating your business over the Internet, either in its entirety or only in the case of some processes.

For example, instead of setting up a physical store, consider setting up an online store in order to save on the purchase or rental of premises, on remodeling, decoration and furniture, on staff who serve the public, and even on products, already that you would not need to have these physically at the time of sale.

Or, for example, consider that the purchase of your products or the reservation of your services can only be done through the Internet, and thus reduce your operating and personnel costs, since these processes are automated you would not need to have someone to be in charge of serving the public.

Offers few products

Offering few products would not only allow you to reduce production costs, but also have a more efficient business process, specializing in the products you offer (and thus be able to offer better products), and project the image of being an expert in what you offer (and so they have a better chance of being bought from you).

If you consider that the ideal in your business is to offer a good variety of products, and thus give more alternatives to consumers and/or attract more types of these, you could start with a few products, and over time, as you acquire more experience in the market, increase the supply of these.

For example, if you are going to set up a restaurant, you could start by offering a few dishes on your letter or menu, and over time, as you gain more experience and better understand the preferences of your audience, increase the number of dishes offered.

Offers few services

An alternative that you have to offer few products is to offer a few services, which would also allow you to reduce operating costs, have a more efficient process, specialize in what you offer, and give the image of being an expert in it.

For example, if you are going to open a hairdresser, you could start offering only the basic services or those most required by your audience (for example, cuts, hairstyles and dyes), and over time, as your experience increases and you know the needs better. of your audience, increase the number of services offered (for example, also offer facial cleansing and massage services).

Use few inputs

To reduce your costs, you could also choose to reduce the number of inputs used in your products or services or, in any case, look for low-cost inputs, although always making sure they are of good quality.

For example, if you are going to set up a business dedicated to the manufacture and sale of clothing, for the manufacture of clothing you could choose to reduce the amount of fabric used (for example, by using simulated pockets), the number of labels, and/or the number of accessories.

Send your products to third parties

Depending on your type of business, you could also choose to have the products that you are going to sell to third parties manufactured (outsource production), instead of buying or manufacturing them yourself.

For example, if you are going to set up a business dedicated to the sale of clothes, instead of buying the clothes or setting up a workshop where to make them, in order to reduce your operating and personnel costs, you could choose to have them made with your own brand to an external tailoring workshop.

Sell ​​through intermediaries

In addition to having your products manufactured by third parties, you could also choose to sell your products to the public through intermediary businesses, instead of selling them on your own premises.

For example, if you are going to set up a business dedicated to making clothes, instead of selling clothes in your own store, in order to save on the purchase or rent of premises, decoration, equipment and furniture, as well as reduce operating, personnel and marketing costs, you could choose to wholesale them to intermediary businesses such as stands, bazaars and clothing stores who then sell them to the public.

Rent instead of buying

Renting, in the long run, is more expensive than buying, but in the beginning, it can also help you reduce your costs and, therefore, your investment.

Nowadays you can rent practically anything, so in addition to renting instead of buying the premises or the office where your business will operate, to reduce your costs you could choose to rent, for example, the necessary machinery to manufacture your products, some furniture such as tables and chairs, or even the computer where you will work.

Make agreements or exchanges with suppliers

You can also reduce your costs by looking for suppliers with whom you can make agreements or exchanges to supply you with machines, equipment, furniture, fixtures, supplies and/or products.

For example, there are suppliers that rent you machines, equipment or furniture at fairly competitive prices, or even lend them to you in exchange for keeping the advertising included in these assets, or using or selling exclusively their brand or their products; or that they supply you with some equipment, supplies or products in exchange for guaranteeing that you are going to work with them, or provide your services to their workers.

Conclusion

Our goal with this guide has been to provide you with all the information you need so that you can start your own business, but also to encourage you to do so.

The two main reasons why a person who wants to have his own business does nothing to achieve it are usually lack of capital and fear of failure.

During our guide we have included various tips for starting a business with little capital; But if after having followed them, the lack of capital is still a problem for you, keep in mind that there are several businesses considered profitable and that require little investment that you can consider, and that in the last case you always have the alternative of looking for financing.

Likewise, during our guide we have also included various tips so that you can have a successful business; But if despite having taken them into account, the fear of failure still paralyzes you, one piece of advice we can give you is to arm yourself a little courage and act despite the fear or uncertainty that you may have.

Keep in mind that once you take the first step the fear will gradually fade away, that as you walk the path you will be able to correct the course you have taken and, above all, that it is in the mistakes and failures where you go the most. to learn and grow as an entrepreneur.

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