Many have probably dreamed at some point in their lives of taking the reins in their own hands and venturing into self-employment. However, many ultimately shy away from the step of starting their own business. The hurdles seem too large, and the risks unpredictable. Nevertheless, taking the risk can be worthwhile, offering countless opportunities not only from a financial perspective.
Is it right for me?
Before contemplating the field in which self-employment could be an option, everyone should honestly ask themselves whether such a model is even suitable. To be successful on one’s own, certain qualities are required. In addition to expertise in the respective field, it is particularly important to possess the necessary self-initiative. Especially in the beginning, there is often no one to rely on. If something goes wrong, solutions must be found independently, and if there are employees, the responsibility for them also falls on the founder.
Therefore, with one’s own business, one must always be prepared for resistance so that the towel is not thrown in at the first sign of adversity. Most businesses aim to sell goods or services, which is why a certain sales talent is also required as a founder. It is essential to convince potential customers of one’s own idea, ideally inspiring them and outperforming the competition, which will undoubtedly arise. Even if a gaping market niche is accidentally discovered, it is only a matter of time before it is served by multiple providers in the event of success. Finally, perseverance is indispensable for every founder. Success rarely happens overnight. Young companies often struggle for years to establish a reputation before finally achieving a major breakthrough. Those who are inclined to give up early are often in the wrong place.
Preparation is key
For those who are aware of the challenges and risks and still want to embark on their own business, it is crucial to prepare adequately for this significant endeavor. This includes creating a solid business plan, which outlines the opportunities and risks and provides a rough forecast of what to expect in the initial period. This is an essential piece of information for potential investors, and without a business plan, it will be challenging to obtain funding or loans for the project.
Founders must also consider seemingly minor details such as the company name, location, and legal form. Such decisions often have long-lasting effects and cannot always be easily reversed. Therefore, it is recommended not to rush into things or break them haphazardly. These are crucial elements that need to be determined before the actual establishment of the company and can have a significant impact on success or failure.
Endless possibilities
Undoubtedly, the most important question is what exactly someone wants to do when becoming self-employed. There is no one-size-fits-all answer to this. Countless factors come into play, but the individual’s passion should always be at the forefront. It is not wise to open a business selling gluten-free cupcakes just because it’s currently trendy or to make money from childcare due to high demand if one is not genuinely passionate about these topics. Experience shows that motivation quickly fades in such cases, and such ventures are often doomed to fail.
Naturally, having relevant knowledge in a particular field is always advantageous, but in many cases, it is not necessarily essential. Of course, a regulated trade business requires the appropriate master craftsman certificate, and not everyone can simply decide to open a law firm on a whim. However, in many other areas, there are no legal restrictions that would hinder starting a venture, and necessary expertise can be acquired independently. With a passion for a subject, basic knowledge is often already present, and in most cases, further knowledge can be gained. There are plenty of success stories that did not require a formal education or similar qualifications. For instance, numerous food truck owners have acquired their culinary expertise through self-study and are now highly successful, some even expanding through franchising.
For those seeking inspiration on the right business to pursue, the following may provide the appropriate idea to take the leap and become an entrepreneur.
Making money online independently
The internet has become the primary starting point for self-employment today. After all, it offers a relatively low barrier to entry. Setting up one’s own website can be accomplished within hours using the numerous tools available, and the opportunities to earn money online are virtually endless. A true classic in this regard is online marketing, which has played an important role since the 1990s. Website owners attract companies to advertise on their platform and, under the right circumstances, receive substantial payments. However, building up the necessary reach can often be a significant challenge. Achieving initial success is somewhat easier with affiliate marketing. In this model, revenue is not generated directly through advertising but rather through strategically placing links to products or services. Website owners receive a commission whenever a user makes a purchase through their portal. Of course, these two forms of online marketing can also be combined on a single website, or a single company can operate multiple websites with different focuses.
In such cases, the content of a website takes center stage, as it needs to attract new users and retain them over an extended period. With the abundance of offerings online, finding the right niche is not always easy, but this should not discourage anyone. Those who can captivate readers with their writing and find the right topics can still achieve success with a classic blog.
Becoming Self-Employed as an Influencer
For some, it has become a derogatory term, but it cannot be denied that influencers are experiencing massive success today, with some of them having already achieved millionaire status. Whether it’s YouTube, Instagram, TikTok, or Facebook, all these platforms have a gigantic audience that often thirsts for new ideas and eagerly embraces them. The age structure, in particular, is often an advantage here, as the younger generation is active on these platforms and is generally very open to new content.
Influencers primarily earn their income through marketing. Whether it’s through platform monetization or through individual deals with (large) companies, the success of a project depends on reach. Therefore, the key focus is to captivate the audience and keep them engaged over a long period. This is not achieved through a mass of hastily thrown together videos and photos, but through professionally produced content that can impress at first glance.
Seizing Opportunities with Network Marketing
For those who are not interested in marketing themselves or other companies but instead aim to promote and sell actual products, network marketing might provide a new home. Network marketing refers to distribution systems where representatives not only sell products but also aim to inspire others to join the distribution network. While it does not always enjoy a good reputation, it is worth noting that the industry has had its fair share of bad actors who closely resemble classic pyramid schemes. On the other hand, there are also reputable providers who have been successful for decades, producing highly satisfied and well-compensated subcontractors.
This form of entrepreneurship offers several significant advantages. The distribution network and the product itself are already established, and new entrepreneurs often benefit from a good reputation built over many years. Additionally, there are valuable guidebooks available for a successful start in self-employment. This type of business can often be pursued alongside a regular job initially, reducing the risks compared to traditional self-employment. Therefore, network marketing is particularly suitable for those who possess strong sales skills and have less ambition to establish entirely new ideas.
The Royal Road: Starting Your Own Business
The previously mentioned forms of self-employment are all possible for newcomers to undertake independently, with relatively low initial investments. They are excellent ways to get a taste of entrepreneurship. Establishing a traditional company, however, is an entirely different matter, coming with its own challenges and advantages.
In many cases, employees are needed right from the beginning. If someone intends to manufacture and sell a new product, it is nearly impossible to handle all the essential tasks, from production to sales and after-sales management, entirely on their own. Consequently, much larger investments are required, including rental expenses for premises and employee salaries. Unless one has inherited a significant amount of wealth or recently won the lottery, it is impossible to shoulder these costs alone. Thus, financing is necessary, typically through a bank loan. To obtain such a loan, the aforementioned business plan mentioned earlier is of immense importance. Banks need to be convinced by the business plan in order to provide funding for new ventures.
Starting a new company from scratch is therefore immensely challenging, and the personal risks in case of failure are high. However, for those who succeed, they will have a solid foundation that can be expanded in countless ways. Entrepreneurs with their own company have full control and can shape and develop it according to their own wishes. This level of independence is not granted to even the most successful network marketer, and even the best YouTuber will always be at the mercy of the platform operator. Those who do not wish to enter into such long-term dependencies will always find their preferred home in their own company.
Franchise: The Golden Mean?
The establishment of a franchise business can be considered a middle ground of sorts. The most well-known examples of this are the widely recognized fast-food chains, which have distributed their individual establishments wholly or partially to franchisees. These franchisees operate one or multiple branches on behalf of McDonald’s, KFC, and others, often achieving significant success. The advantage lies in the fact that the massive corporations behind them take care of aspects like marketing, ensuring a high demand right from the start. However, a franchise is hardly the right place to unleash one’s own ideas, as it primarily offers and sells established products and services, with changes being implemented solely by the franchisor. The franchisor also has certain expectations for new entrepreneurs, often requiring suitable qualifications and a certain level of capital. Entering a pre-established network
Another option is to simply acquire an already established company. This is seldom a cheap endeavor, and it is not always easy to navigate existing structures. However, it eliminates the often years-long groundwork required to establish a company and achieve initial successes. Financing remains a significant challenge in such cases as well. Apart from ongoing costs, funds must also be raised to buy out the previous owners. Therefore, an acquisition should be carefully considered, with the company’s financials thoroughly examined beforehand. Resourceful entrepreneurs can sometimes guide a company with modest success to great breakthroughs through the right steps. However, this is an art in itself and should not be underestimated under any circumstances.
Embark on your own startup journey
Of course, startups should also be mentioned here as they represent a unique form of business creation. While there is no definitive definition, startups typically distinguish themselves by operating with exceptional flexibility and attempting to establish an entirely new market. In many cases, there isn’t even a specific business model in place at the time of founding. Instead, it develops over time, and once it becomes established, the transition to a traditional company occurs. Most of the tech giants from Silicon Valley began their success stories as startups, often starting in a garage with little more than a great idea.
The particular challenge in a startup lies in captivating others with an idea. Financing in this realm is rarely obtained through conventional loans but mainly through venture capital or business angels. These individuals often invest significant amounts of money in young founders without knowing if they will ever see a return on their investment. It is evident that immense confidence is required to attract the necessary funds that are indispensable for a startup’s success.
Unlike other forms of business creation, everything in a startup hinges on the pivotal idea behind the company. For Netflix, it was the (legal) streaming of movies and series, while Amazon began with the sale of books over the internet. Only when someone can inspire others with their vision are the prerequisites for a successful startup fulfilled. Frequently, the greatest challenge for such companies lies in finding an investor who can provide the crucial spark for a successful start.
Regardless of the specific path one intends to take in becoming self-employed, money is always a crucial factor. In addition to the options mentioned earlier, there are several alternative ways to finance a business startup. One popular method in recent years has been crowdfunding, where numerous small investors, often from the private sector, contribute small amounts to a project. The advantage here is that it allows for an assessment of interest in a product or service beforehand. If a set financing goal is quickly achieved, it is already foreseeable that there is corresponding market potential.
Entrepreneurs should also definitely explore the possibility of receiving government funding. This is often possible for companies involved in specific areas such as renewable energy. In the social sector, it is possible to operate without profit intention if the necessary funds are provided by the public sector. It is difficult to make general statements about the chances that may arise in individual cases and what the best funding source may be. However, potential forms of support should be examined in any case.
Take courage!
Apart from all considerations regarding financing, business structure, and the like, the greatest obstacle in starting a business often lies in overcoming one’s own doubts and fears. For a startup to succeed, one must simply have the courage to proceed and accept the risks and challenges involved. Success can never be guaranteed, of course. Yet, with the right idea and the necessary mindset, the experience alone can be a true reward. So, to those who may still be hesitant about the idea of starting a business, I encourage you to have the courage to do so.
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