How to Start a New Business as a Beginner
Would you like to start a new business, but you don’t know how? Are you still looking for the proper idea? We’re here to help. Starting a profitable business is not easy, but definitely not impossible. However, it requires an in-depth analysis of yourself and your target group’s wants and needs. Here are a few tips that help you figure out what kind of business suits you the best!
Think about what you are good at
Have you ever asked, “What skills do I have?” Or “What do my friends say I’m great at?” These answers will help you get closer to the territory, where you can exploit your business potentials. Based on your personality and professional skills, list up the ideas you have! Doing business with your existing skills will help you reach your goals faster and will give you an advantage in the market over competitors.
List up what you’re passionate about
By listing up all the areas and activities that you are excited about you can find your long-term motivation and build a profitable business on them. Working on things you love will grow the chance that you won’t abandon your goal even when the road gets bumpy and you won’t lose your drive until the first success comes.
Find out if your idea has business potential
It’s not worth to work out a plan that has no business potential, as it takes a lot of effort and investment at the beginning. Use the pay certainty technique to find out if your potential clients can and willing to pay for your business idea. With this technique, you can eliminate the plans that are not able to generate profit and save yourself from wasting resources.
How it works in action?
Take each of your ideas and write them down. Next, to each idea, write down who would pay you for your service.
Idea: Social media consultant for accounting firms.
Who Would Pay: Accountants
Idea: Music instructor
Who Would Pay: Parents of ambitious children
Now apply the “Pay Certainty” Framework. For each person who would potentially pay you, ask yourself:
- Are they able to pay me for this service?
- Are they willing to pay me for this service?
This lets you eliminate your ideas that would not have business potential.
“Accounting firms with 5–10 employees who want help managing their firms’ hardware and software assets.”
– ABILITY to pay: YES, lawyers swim in money
– WILLINGNESS to pay: NO, they don’t pay freelancers and are ultra-conservative
– VERDICT: ELIMINATE
“Music instructor for ambitious children — client is mother”
– ABILITY to pay: Yes. Parents of ambitious, successful children tend to be more affluent than those of average children
-WILLINGNESS to pay: Yes. Parents will spend virtually anything to ensure their child is successful, well-rounded, and gets into a top college
– VERDICT: GREAT IDEA. PURSUE!
Rate ideas using the Demand Matrix
The first thing you should do before starting any business is to make sure there’s a demand for what you offer. A profitable project answers a specific need and solves a problem in people’s lives. If you want to make sure your business idea worth your time, use the Demand Matrix for your business plan!
Check your ideas for profitability and personal fit
A profitable business idea fits your personality and combines your skills with what people would love to pay for. If you find this intersection, you’re on the right track!
When not to start a business:
- When you don’t have the motivation and time to bring your idea to life. Passion and effort are keys to business success.
- When the timing or the environment is not right, e.g., laws and regulations, or your idea requires a certificate or license that you don’t have.
If you checked all the five points above and you have the answers, you’re one step closer to a profitable business that can keep up your motivation. Even if you have a great idea, or you already know what kind of business you’d like to start, don’t forget to do market research and check competitors to avoid possible mistakes. If you don’t know what and how to start yet, read our article about 20 business ideas, from which you can still find the one that makes your heart beat in the long term.