Do you need experience to start a business? A lot of people ask that question, but the answer isn’t exactly straightforward.
You won’t get far in business without a basic understanding of finance, branding, and other business concepts. Yet nearly half of all business owners don’t have a degree, and the number of self-employed Americans with a college education is dropping.
That’s not to say you should start a multinational corporation with zero background in business. However, many businesses that are both easy to start and forgiving of rookie mistakes.
The best businesses for first time entrepreneurs
The best businesses for first-time entrepreneurs:
- Capitalize on trending opportunities.
- Have low startup costs.
- Have strong early cash flow.
- Can be bootstrapped.
- Are scalable.
If a business idea requires cashing out your life savings, it’s probably not the smartest move as an inexperienced entrepreneur. A low-investment business idea that you can start part-time, on the other hand, is just right.
For example, you can:
- Become a consultant.
- Provide professional services.
- Start a dropshipping business.
- Sell print-on-demand merchandise.
- Sell digital courses or ebooks.
- Develop mobile apps.
- Start affiliate marketing.
- Write copy, content, or start a blog.
- Become a virtual tutor or translator.
These ideas just touch the surface of beginner-friendly businesses. Consider what skills you have to offer and how you can monetize them while solving customers’ problems.
From idea to profit: 5 steps to start a business
Once you’ve identified the right opportunity, you’re ready to turn your business idea into action. But where do you start?
1. Develop a business plan
A business plan is the first step in developing any business idea. Whether it’s 20 pages or two, the business plan is an important document for:
- Clarifying your business idea and anticipating obstacles.
- Conducting market research.
- Identifying your target audience.
- Setting a budget.
- Conducting financial analysis and predictions.
Don’t rush through the business planning process. It’s not uncommon to return to the drawing board multiple times, but every revision gets you closer to a profitable business idea.
2. Build a brand identity
Once you’ve written a business plan, you’re ready to start building your brand.
An important part of brand identity is designing a logo. If your budget is tight, instead of hiring a logo designer, you could use an online logo maker like Adobe Spark which gives you access to thousands of professional designed logos. After you’ve chosen a logo, you can customize it by selecting colors, fonts, and text to develop an authentic brand voice. Once you’ve designed your logo, you’ll be able to apply it to flyers, products, business cards, and much more.
Remember that a strong brand identity doesn’t guarantee conversions. Early stage marketing focuses on building brand awareness. To turn awareness into cash flow, you need to demonstrate how you deliver value to customers. This requires a more hands-on approach to sales rather than waiting for paids ads to bring customers to you.
3. Establish a legal business entity
The next step is formalizing your business. The steps to establish a business vary from state to state, but in general you’ll need to:
- Choose a tax structure.
- Register your business with the Secretary of State.
- Apply for an Employer Identification Number (EIN).
- Apply for state tax permits.
- Apply for required business licenses, permits, and industry certifications.
- Purchase business insurance.
4. Decide if you’ll hire employees
Employer businesses have additional responsibilities, including workers compensation insurance, unemployment insurance, and complying with labor laws. Businesses with employees also need to establish a payroll system before making their first hire.
5. Purchase business software
Configuring business software before launching your business saves a lot of headaches. Most companies benefit from specialized business software in addition to core apps for accounting, human resources, and file management.
Ecommerce startups, for example, require inventory tools that integrate with platforms like Amazon and Shopify to eliminate manual data entry and the errors that come with it. Selling wholesale? You need wholesale ERP software that is remote-friendly so you can run your business from anywhere while keeping your customers happy.
You may not need experience to start a business, but you do need a plan. Even the most beginner-friendly businesses benefit from a clearly-defined roadmap to success.