Business Startup Guide: Classic Business Creation Principles

Posted on at


A Business Startup Guide: Classic Business Creation Principles - Photo credit:, Edition by Amber255 via

Making order in my cabinets and choosing what to throw out, I came across my old studies conspectus. I do not think I need them still, so they went to the recycle bin, but still, I looked in a little. And yes, I found some ideas for the new blogs. Interesting, how much I am still able to remember about serious matters I learned years ago?

So, guess, what about I want to talk today? OK, my blog's title already shows it. It's a business. It was always interesting to me, and I am sure, one day I will have my business. And I knew already what about it will be. Yes, I believe, it will relate to the real estate as it is the object I know the most, and I am working in. Let's think about how to start a business. Imagine: one day you decide already having some amount of money, you have a big dream, and you want to open your own business. How to start it? What to think about, what the aspects to care about?

 It is no matter what the business you want to open: you may open a shop, cookery, private kindergarten - there are some things to think about. Let's go!

Being an entrepreneur means that you'll often blaze your own trail: No career guides, counselors or maps will guide you from one step to the next: You'll have to make it up as you go.



Choosing A Business Model

You can build your business by three large, clearly expressed models. Also, you can choose a mixed model with both one and other model's features.

The main model is when you create own business for a long time, and you expect that your children will take it over the time or it will become a pension fund to you. You create it gradually conquering the market, expanding the team, creating traditions, improving the brand or its group. Strategically minded, mature people who understand the challenges they face and are always ready for that can create a successful business by this model. You finance such business by own accumulated funds or by passive lending sources such as traditional banks.

More venture people with tactical thinking better go for a buy-sell model. Such a business is looking for what a product is the most in demand, finding who offers a product for the cheapest price, delivering, and distributing. Those who base their knowledge on own intuition, who are the first to feel the area's success and the first to take advantage of it, are the best. Most often, seeing the success of these businessmen, the imitators flood the market. In the long run, they are damaging the market by reducing the trade margin. This kind of business is usually short-lived: entrepreneurs take another business where they can buy and sell quickly again, and first model entrepreneurs occupy their place.


Business startup  models- Photo credit:

Most confusing is the third model of businesses. They confuse the minds of young people, but, unfortunately, no one says that maybe only one in ten is successful. This is the rapid growth of the business and the sale of the business or part of the business itself. Such a business base on the pyramid principle, where the value usually grows not because of the profit received, but hopefully, will receive. In the first phase, such businesses get financing by various active financing companies: venture capital funds, sometimes more conservative capital holders.

At this stage, the people buy company's shares expecting an increase in the price and not a dividend. Increasing the value of their earnings attracts others to buy shares and expect similar growth. Increasing the value of their earnings attracts others to buy shares and expect similar growth. However, only rumors are enough for the shareholders to sell their shares. Then their value drops sharply, destroying the company. Such a company cannot exist without constant investment. Only charismatic venture persons with a high level of influence create such companies.

In practice, the companies that apply all three models are the most successful. The company has to start working on finding an area where it can earn money right away. An enterprise whose value increases by time is successful. Every injection into a company actually adds value to the company, and you can sell it successfully if you want to leave the business.

The single biggest reason why startups succeed - Video credit: TED via

Choice Of Business Direction

There are several ways to become a business owner.

There are several ways to become a business owner. But even the owners of such businesses are often several partners, investors. Without an investor, there is a long and difficult road ahead.

A business owner can become if choosing to become a partner of an existing company. This is particularly widespread in developed economies where it is extremely difficult to become an interesting and a big business' owner. There are rarely companies which rule only one person or one family. Quite often, the founder's family has only a few tens of percent of the company's shares. If the company is smaller, it is possible to take over the business from the aged owner who no longer wants to rule it. If you are the one who knows all the nuances of the business, the owner would like to entrust the business to you than to sell it to random investors. Often, business founders stay part-owners by dividends, retaining their positions on the company's board.

You can buy an already existing business. Someone is may not able to do business, or maybe the shareholders fell out of business. If you think you can do it better, take care of it. It is easier to develop such a business because it is already possible to see what the mistakes were, and often the production processes are quite clear, and there are only gaps to fill in the business.


Classic Business Creation Principles - Photo credit:

Team For Building Business

Key employees will be the key to success when creating a new business. Most often, they get allocated some activities. First of all, choose four key areas.

The technologist is the person who knows everything about the equipment, products or services of the business being created. It can instantly answer all the questions about the product, the service, the production process.

The seller must have a good understanding of marketing, advertising, and sales technology, and it would be good if you already had contacts with potential customers. If necessary, he has to teach other vendors.

The administrator today is a person who motivates employees and improves productivity. He gathers auxiliary command, motivates, teaches, monitors the mood, eliminates the disadvantages, combines the activities of a technologist, a salesperson, and a financier takes care of the production's development, logistics, and marketing processes.


Guide  for business beginner - Photo credit:

The financier takes care of the financial flows, looks for opportunities to attract a financial company for development. He is able to convince about the postponing. Do not confuse him with the accountant - this one only prepares the company's activity reports for the state.

One person can have all these qualities. You may need two or maybe all four employees. The more person has of these qualities and is able to use them successfully. The more valuable he is, and the greater the scope of the company's activities is designed to him.

However, you should always remember: do not invite a person to the owner only because he has what you do not have. If you feel that there will be problems, look for opportunities to hire him for part-time or for consultations.

All too often, companies fail when shareholders get angry with each other. Select your business partners very carefully. Notice that owners of newly established companies invite partners because of the fear to start a business alone or simply for a company. It is worth discussing in advance or even writing out the terms of the exit from the company, and how to redeem their shares.


How to start a business - Photo credit:

Preparing A Business Plan

You need a carefully designed business plan not only to attract investors but also to take a close look at the opportunities and prospects of your business. When analyzing every nuance, there are many things which could be found before starting a business. In such a way, you could avoid different disadvantages and successfully develop that business.

Prepare the classic business plan for at least a few years ahead with a number of factors. Count the financial flows by estimating costs, income, and profits every month.

You need a few sets of plans, even if each is only a few pages. A business plan, with an accompanying marketing outline, are important blueprints for success. They help you map out the major landmarks of the road ahead, define your success and break the journey into important metrics you can track your progress against. 



Staff salaries: Administration staff; Production staff; Sales staff.

Purchase of fixed assets: Equipment; Workplace installation; Repairs.

Rent: Office supplies; Marketing and advertising costs; Connection costs; Interest; Unforeseen expenses.


Class A customers; Class B customers; Class C customers.

Summary earnings.


Business plan - Photo credit:

Finding Funding

The business startup requires accurate counting of the required funds, and how they spread over time. Businesses can start with own savings, or you can borrow in conservative borrowing institutions like banks or look for lenders in venture capital institutions. 

When planning for small growth and having collateral, it is worth contacting more conservative lending institutions. Their lending rates and terms will be more suitable than venture capital funds offer. Use venture capital funds to get a loan without collateral, but to give back will also need much more. 


Finding funding  for business - Photo credit:

Business Advertising

New business advertising requires immediate funds. Opting out of advertising or searching for free options is one of the main cause of business failure. Many business startups still find it difficult to realize that they need just to buy advertising but to buy such kind that will really help the business.

The main advertising formula from which to start searching - to reach as many people as possible at the lowest possible cost (now) for my product. The calculation must not be as low as possible but at the lowest possible cost per customer.

At the start of business, plan the advertising for 3-7 percent of the working budget.

Clearly answer the following questions:

Who is my buyer, how he behaves, how he faces the media, how to influence him?

What media have my buyers and how many, what are the strongest of these media, what impact these publications have on the choice of buyers?

What are the best positions in the media of market leaders, what their prices are? How much it costs to reach one buyer in different media channels?

20 Effective Ways to Promote Startup Business - Young Entrepreneurs Forum  via

Company Registration

Company registration is a simple step in a business creation comparing with other steps. You can register your company in various forms.

The most common and convenient form is a Private Limited Liability Company. Owners of such companies are responsible for the amount of share capital. 

It is also possible to register personal activities or personal company. In the latter case, the company answers by all its assets. Failure always has painful consequences. There are many other forms of business registration. We may look at them in the future articles. 


How to start a business - Photo credit:

The Employee Selection

Selection of staff - the process of setting requirements for the employee's position, searching for potential candidates, selecting the most suitable candidates based on experience, education, personal qualities, company culture evaluation criteria.

Employees often are selected by the advertising ads, an acquaintance. In a labor market where it is difficult to find a skilled worker, there is even a motivational system when an existing employee attracts a new employee.

Posting a job of interest in a properly selected media is an effective way to reach a target group of employees. An attractive advertising campaign not only creates a positive image of the employer but also helps those candidates who have the right competencies but are not actively looking for work.

It all depends on you, what the employees you need, what the team you want to build. 


Create own business - Photo credit:

On The Final Note

So, answer yourself, is it worth creating your own business? Are you interested in doing business, creating and developing it, encouraged to take the initiative and start your own business? Or maybe you should work and not distract your attention with similar questions?

It is very easy to adapt and get used to what you do every working day, and don't realize that the result will be the same as every business day. Expanding the boundaries of the comfort zone, constantly leaving it, is the only way to reach the heights.

Any time is a good time to start a company.--Ron Conway, investor, SV angel


If you want to have something you don't already have, do what you have never done before. Of course, measure and check the risk because it is always there - only to learn to control it and not to avoid it.

Business will be more successful when next to you are right people who take advantage of your strength, compensate for your weaknesses, and at the same time, create a wonderful team.


 How To Start A Business - Photo credit:

Never be frightened and do not expect the worst. It is important to believe your business idea. Only then will you be able to "enchant" by it others, attract employees and customers. A smile is an easy language that all world understands.


 Thank you for stopping by and reading my blog. 

2019, All Rights Reserved. 

You are very welcome to join Bitlanders and share your valuable knowledge and opinion.


About the author