Starting a Business from Scratch

How to Start Your Business from Scratch: A Comprehensive Guide for Beginners

Generating and Evaluating Business Ideas

Identifying a unique niche requires a systematic approach. In the early 20th century, entrepreneurs focused on local demand, whereas today opportunities are global.

History and Trends

In the 2000s, retail actively migrated to the internet, providing opportunities for smaller players. Today, trends change more rapidly thanks to social media and data analytics: eco-products, telemedicine, remote services. Google Trends shows an increase in searches for "sustainable packaging" and "telemedicine platform." New formats are emerging: virtual stores, subscription delivery services, and AI-driven educational platforms.

Practical Case Study

A startup from Singapore developed a land leasing platform for urban gardening. Their mini-MVP was launched at a local agripreneur forum, where they collected advance payments of $15,000 and received a government grant. As a result, within a year, their revenue surpassed $200,000.

Evaluation Methodology

1. Surveys and interviews: conduct 30-50 conversations with potential customers to identify real pain points.
2. Landing page prototype: test CTR and conversion rates.
3. Competitor analysis: examine reviews on Trustpilot and social media to identify shortcomings and propose superior solutions.
4. Financial and technical feasibility assessment: calculate CAPEX and OPEX for the MVP and LTV of potential customers.

Creating a Business Plan

A business plan remains the primary document for attracting investors. Lean Canvas is popular among startup incubators due to its simplicity.

Universal Structure

- Executive Summary: key metrics and objectives.
- Product Description: unique selling proposition (USP) and roadmap.
- Market Analysis: TAM, SAM, SOM.
- Marketing: AARRR funnel.
- Operations: tech stack and logistics.
- Finances: profit and loss statement and scenarios.
- Risks: response plans and insurance mechanisms.

Expert Quote

"A business plan is not dogma, but a living document that is reviewed after each quarterly report," notes a venture partner at Alpha Ventures.

Updating the Plan

Frequent reviews of the business plan after achieving key milestones (MVP, first funding round, reaching positive EBITDA) help in adjusting strategy and resource allocation.

Registration and Legal Formalities

The legal structure defines the level of liability and opens access to different markets.

Registration in Key Regions

- USA: LLC through online services in 1-3 days, fee $50-$200.
- Germany: GmbH requires a capital of €25,000 and a notary.
- India: Proprietorship/Pvt Ltd through MCA for $30.
- Mexico: SA de CV with a share capital of $3,000 and a mandatory notarial agreement.
- Russia: ООО within 5-7 days, fees, and notary—up to $200.

Comparison of Legal Forms

Choosing a Taxation System

Simplified taxation (6% from revenue) is popular in Russia. In the US, startups opt for S-Corp for tax benefits on dividends. The EU offers preferential regimes for innovative companies (Patent Box, R&D incentives).

Licences and Permits

Highly regulated industries (education, healthcare, fintech) require specific licenses and certifications: plan for timelines ranging from 3 months to a year.

Sources of Funding and Accounting

Proper funding and transparent accounting help attract investments and reduce risks.

Funding Options

- Personal funds: no debt burden.
- Bank loans: mortgages secured by collateral, government bonds for large purchases—interest rates 8-15%.
- Grants: Horizon Europe, SBIR/STTR, Youth Russia "Startup-2025".
- Venture Capital: seed, Series A–C; post-MVP, can attract from $500,000.
- Crowdfunding: Kickstarter, Indiegogo—up to $100,000, testing demand.

Accounting Tools

- QuickBooks and Xero for English-speaking markets.
- 1C and Kontur.Buhgalteria in CIS countries.
- Wave Financial and Zoho Books for startups on a budget.
- Online services for payroll and tax calculations (PayFit, Gusto).

Success Stories

A fintech startup from Kenya received a GSMA grant of $100,000 and issued its first 5,000 microloans through a mobile app, achieving operational breakeven within 18 months.

Market Analysis and Target Audience

Accurate analysis enables the creation of personalised offerings and enhances marketing effectiveness.

Analysis Methodologies

- SWOT analysis: strengths and weaknesses, opportunities and threats.
- PESTEL analysis: external factors—political, economic, social, technological, environmental, legal.
- Jobs-to-Be-Done: tasks that the customer aims to solve.
- Customer Journey Map: the customer’s path from recognising a problem to making a purchase.

Tools

Use Google Analytics, Yandex.Metrica, Hotjar for website behaviour analysis and surveys in Typeform or SurveyMonkey for qualitative research.

Operational Processes and Team

Organising work and fostering a united team accelerates growth and product quality.

Automation

- HubSpot CRM and Salesforce Essentials for sales.
- Odoo, Bitrix24, Monday.com for ERP and project management.
- Slack, Microsoft Teams, Zoom for communication.

Recruitment and Motivation

Utilise the SCRUM methodology: two-week sprints, daily stand-ups and retrospectives. Stock options and quarterly performance bonuses motivate key employees.

Team Case Studies

Leading Silicon Valley startups host hackathons for recruitment and to align candidates with their culture.

Marketing, Sales, and Promotion

A balanced funnel for customer acquisition and retention increases LTV and reduces CAC.

Promotion Channels

- SEO: sustainable organic traffic, 50-60% of visitors after one year.
- Contextual and targeted advertising: quick launch, but requiring budget control.
- Email marketing: automated sequences, CTR of 4-6%.
- Social media: TikTok and Instagram for B2C, LinkedIn for B2B.
- Partnerships and collaborations: joint webinars and promotions.

Examples of Successful Campaigns

A Russian edtech startup reduced CAC by 40% by conducting a series of free webinars in partnership with universities and gathering leads for paid courses.

Content Marketing

Establishing an expert blog and publishing white papers increases engagement and leads maturity, reducing the sales cycle.

Risk Management and Performance Control

A systematic approach to risk allows for quick responses to external and internal threats.

Risk Matrix

Key Metrics (KPI)

- CAC (Customer Acquisition Cost)
- LTV (Lifetime Value)
- Churn Rate
- EBITDA and profitability
Utilise Power BI or Google Data Studio for real-time dashboard visualisation.

The Future and Scaling

Scaling requires readiness for new markets and product adaptation. Implement API integrations and microservices for rapid entry into other regions.

Global Expansion

When designing business architecture, consider local regulations, language localisation, and partnership networks. International startups often launch white labels and franchises for rapid market penetration.

Growth Automation

Invest in AI for personalising offers and chatbots for customer support, which reduces operational costs and enhances satisfaction.

Conclusion

Starting a business from scratch is a multi-step process. Generate ideas through trend analysis, test MVPs, create a business plan, and update it regularly. Choose the right legal form, diversify funding sources, and automate accounting. Segment your audience and build personalised marketing campaigns. Invest in your team and automation technologies. Manage risks using a matrix and track key metrics. This systematic approach will ensure sustainable growth and provide the opportunity to scale into international markets.

Key Steps

1. Validate your idea through MVPs and customer surveys.
2. Create a concise business plan with financial scenarios.
3. Ensure proper registration and selection of taxation regimes.
4. Establish a flexible funding model and transparent accounting.
5. Conduct an in-depth market analysis and personalise marketing.
6. Automate processes and motivate the team with options.
7. Monitor risks and provide regular reports on KPIs.