Putting up their own business is a dream for many. That’s why it’s not surprising that I get asked almost every day by a lot of people on how to properly start a business.
Most are afraid to start a business because they don’t know how or where to begin. They don’t know what to do and they’re worried about making a mistake and losing money.
Starting a business with no business knowledge
IF you’ve always wanted to start a business, but you have zero knowledge and zero experience on entrepreneurship, then here are three things you should know.
1. It’s okay to start a business with no business knowledge. Everyone can be an entrepreneur. You don’t need an MBA. You don’t need experience. You can start a business anytime and anywhere. And yes, even if you have no idea what you’re doing.
2. Your first business will most likely fail. Starting a business is relatively easy. Managing a business and making it grow is a completely different story. And because you have zero knowledge about running a business, you will most likely fail.
3. Failing is actually a way of learning. Starting and trying to run a business is exactly how you gain experience. And whenever you try something and fail, there’s always the learning that comes after.
For some reason, most people think that failing is the end of the road. That is far from the truth. Go ahead and ask someone successful if they ever experienced failure, and I guarantee that they’ll answer with a big YES!
Everyone fails, but not everyone learns from their mistakes. And that’s what truly separates the successful people from the unsuccessful ones.
So even if you have no idea how to start a business, I suggest that you simply try and do it. Do your best and keep a healthy mindset. And remember that even if you fail, you will learn things that can help you be better at it next time.
The basic steps of starting a business
I’M a serial entrepreneur, and after more than a decade of putting up businesses year after year. I’ve learned that there are three basic steps to follow when starting a business.
Step 1: Solve a problem. Whatever product or service that you plan to sell, it must solve a problem for someone who can afford to pay you.
This is absolutely necessary. When you’re solving a problem, then you are offering value to others. And that value translates to money.
Look around and pick a business… any business that you see. Now ask yourself, what’s the problem that the business is solving for its customers?
If you’re about to cook at home and suddenly realize that you’re out of cooking oil, then there’s the neighborhood sari-sari store that can conveniently solve your problem.
If you’re too busy and you’re slowly running out of clothes to wear, then there’s the laundry shop to help you with a clean and fresh set of wardrobe.
My friend sells homemade chocolate cakes that are absolutely delicious. What’s the problem she’s solving? She provides an affordable and heavenly dessert for those looking to satisfy their chocolate cravings.
What’s the lesson here? When starting a business, it’s important to think of it from the perspective that you are solving a problem. Because that’s the reason why people will buy your product or pay for your service.
Step 2: Know how much it costs to set up the business. A lot of people make the mistake of saving up for business capital as the first step. In fact, this task comes after you’ve decided what business to put up.
I once met an overseas Filipino workers, who was able to save a million pesos after four years. He did this because he wanted to start a business that could replace his income, so he could finally go back home.
I asked him what business he plans to put up, and he said that he wants to get a business franchise. I referred him to a company where he found a food franchise he liked that only costs a total of P650,000 to set up.
Did you know what he told me during the grand opening of his business franchise? He said that he could have started the business a year earlier if he only knew that he already had enough money.
This is exactly the reason why you need to know what business you plan to start first, before you think about how much you need as business capital. It’s a practical and effective strategy.
And furthermore, by knowing how much it will cost to set up and operate the business, it also becomes easier to calculate the best price to sell your product or service.
Step 3: Learn how to sell your product or service. It’s impossible to have everyone as your customer. Every business has a target market, and it’s your job to know who they are. In other words, you have to know who are the people that your business are trying to help.
Who are your customers? Are they male, female, or both? Single or in a relationship? Do they belong to the working class, the middle class, high-income class, or somewhere in between those three?
What is their lifestyle? What are the things they like doing? What are their spending habits? What are their hopes and dreams? What are their major worries and concerns?
By having a good idea of who your customers are, then you can definitely learn how to sell your product or service to them. You can speak their language and help them find the value of what you’re selling.
Did you know that luxury car brand, Rolls Royce, never had a television commercial? That’s because their customers don’t watch a lot of TV. Instead they place ads on financial newspapers and business magazines.
And it’s been very effective. In fact for the past decade, their car sales had steadily gone up year after year, with last year currently holding the record for the most cars sold.
That’s proof to the power of learning how to sell to your target market.
Go ahead and start a business
Starting a business can be hard, much more so if you have no business knowledge. But you need to start somewhere, and trust that you’ll learn and pick up the necessary business lessons along the way.
Moreover, it’s actually quite common to see first-time entrepreneurs achieve modest success in business. And many of them eventually experience massive success in their succeeding ventures.
Lastly, there are now a lot of ways to learn about entrepreneurship. You can enroll in a business course, or simply search online for free resources. So there’s really no need for you to start a business with zero knowledge.
Fitz Villafuerte is registered financial planner of RFP Philippines. To learn more about personal-financial planning, attend the 84th RFP program this August 2020. To inquire, e-mail firstname.lastname@example.org or text <name><e-mail> <RFP> at 0917-9689774.