What does an entrepreneur need to know? - How to make money

What do you need to know when starting your own business? What are the pitfalls and what is the key to success? What an entrepreneur needs to knowto start earning quickly and not lose all your money? There are no universal answers to these questions, but we have collected some proven tips in the article.

First, accept the fact that things will never be the same again. We will have to say goodbye to the usual schedule, a clear plan and paid vacations. Your business requires more participation, discipline, energy, at least in the beginning. Second, accept the risks: try not to make hasty decisions, but know that there is always the possibility of failure.

Each transaction and each new stage of development will be associated with a risk, there will be no other way. These few reasons are the answer to the question of why not everyone wants to start their own business. However, if you are ready to change your way of life and your way of thinking, start doing it and don't stop – then you will get a result that is well worth the effort.

Knowledge of economics and ability to work with numbers

The economy is the foundation of everything in business. You need to know the basic definitions, indicators and formulas. For example, profit is the money left over after deducting costs, revenue is the money a company receives for providing services or selling a product, costs are the amount the company spent on producing goods or services. development.

Every company strives to increase profits. Some do this by scaling the business, others cut costs, and still others choose a niche with low competition and high demand.

The macro market situation affects the profitability of a business: what are the economic growth rates, exchange rates, inflation? What is the unemployment rate, the average wage, the most likely changes?

This analysis must be carried out constantly so that the business remains relevant.

The laws

You must know your country's laws if you want to avoid excessively high taxes and fines. For example, what does a food business entrepreneur need to know? These are, as a minimum, requirements for points of sale, rules for storage, labeling and sale.

You need to know the basic forms of ownership:

1. Sole owner – in this case, one person owns the business, i.e. assumes all responsibility, risks, receives all profits.
2. A limited liability company is a company that employs several founding partners. Each of them invests money, risks his share and makes a profit. Not everyone is required to manage, but one of the participants.
3. A corporation is a company that sells its shares. It is managed by a board of directors and top managers elected by the owners of the public limited company – shareholders.
4. Cooperatives are often created for the joint consumption of goods and services – they are, for example, credit unions.

Learn about tax systems and legal ways to pay less, monitor information about subsidies, subsidies and government support.

Production and partnerships

Let's start with the services. For example, you work as a guide and show tourists around the city. A competitive guide is a person who knows the best places and has negotiated the best conditions for visiting them. He takes visitors to a restaurant where they receive a discount and dessert is served on behalf of the institution, shows a viewpoint that is closed to the rest and passes without queues where they are.

This specialist will earn a lot, because he knows how to negotiate with people. It increases the profits of restaurants, museums and other places, reaching the top itself.

And that, it seems, is in the service sector, where production capabilities are not needed. What if you decide to create automotive parts? You need to find suppliers, and each transaction will improve or worsen the final product, reduce or increase its cost.

Suppose you and your competitor are using the same supplier. You were able to negotiate a lower price, meaning you secured a better profit.

Marketing

Now every business needs promotion. You should have a good idea of your target audience: how old they are, how much they earn, what social media they spend time on, and most importantly, how you can help them. Work on a unique selling proposition – this is what will make you stand out from your competitors, what you will be chosen for.

Learn the basic tools: sales funnels, A/B testing, ABC analysis. This is what an aspiring entrepreneur needs to know to enter the market with a new product. What segment are you in? In B2B, that is, for business, or B2C, that is, for individuals? Are your potential customers watching videos on Tik-Tok or reading emails?

If you don't understand and don't want to understand marketing, hire a good specialist. But where will the money come from?

Investment attraction

You can open a business without investing a single ruble of your money. Here are some options you can use to raise capital.

1. Family and acquaintances are the first you can reach out to with an idea. It is true that you need to remember the probability of ruining the relationship.
2. Private investors invest money in exchange for a stake in a company. So the value of the business grows, and he resells his share and earns from it. It also turns out that he's counting on a share of the profit, not the stock's growth.
3. Accelerators, that is, business incubators, train entrepreneurs, help with the development of a business plan, find their first customers and, most importantly, organize events where you can meet potential investors.
4. Subsidies and subsidies – it's often hard to pass the competition, but it's real. Also, you will have to spend a lot of time reporting all the money received. However, it makes sense when values start at several million reais.
5. Crowdfunding, ie contributions from a large number of private investors. In exchange for their money, you give them some kind of advantage. For example, you are raising money to shoot a movie. Those who invest receive a movie ticket, a mention in the credits or the right to use the project for commercial purposes, depending on the value.

That is all! Develop financial thinking with Ilya Sitnov. Subscribe to our newsletter here and on Yandex.Zen so you don't miss out on useful materials.