Editor’s note: This article was first published in September 2013. The description of Andrés Barreto’s age (26) and his four solid companies reflects his situation at the time.
Many people are probably in this situation. They want to start their own company but have no money, no business experience and no contacts to help them get going. The other question would be: “What are the basic, essential things I need to know to start my own business?”
The truth is that we are saturated with information. The advantage for new entrepreneurs is that, thanks to the internet, there is no shortage of information on business plans, feasibility analysis for your business ideas and advice for entrepreneurs, but… what if we are actually overloading our minds with information and burying what matters most?
At the end of this article you’ll find a video in which Andrés Barreto, a 26-year-old Latin American entrepreneur, offers advice on what really matters in business. At 18, this young entrepreneur began a series of ventures that have ended up as four solid companies. He had no contacts, no money and no business experience. All he had was a broken dream and the need to start something of his own.
1. The upside of starting with no money
The good thing about starting a business with no money is that you already know you won’t lose money by doing it.
2. What are the most basic things you need to know about business?
After more than 2,000 hours of reading and studying the business world, I can sum this point up in a few sub-points:
- Your business will make a profit when its expenses are lower than its income.
- If, once you’re up and running, you come up with various initiatives but they affect neither your expenses nor your income, you don’t really have business initiative.
- If your expenses are higher than your income for a prolonged period, you don’t have a business but something closer to a charity. In other words, either you do something NOW or you close. Otherwise, you’re just being a mug.
These premises are the most crucial ones in business, although each point can be expanded as much as we like.
3. What do I need to know as a business owner before taking the plunge?
- Always stay humble.
- Before launching a product, make sure people will pay for it. In other words, test your product in a beta phase before launching it on a large scale. If lots of people tell you your product is wonderful but nobody reaches into their pocket, you probably don’t have a business.
- Always do what you think is right rather than what others expect of you, however crazy your idea sounds. As Michael Dell put it: more craziness and less asking for advice.
- Try to find mentors, or at least surround yourself with people who already are what you want to become.
- Don’t try to get rich with a quick windfall. Since you’ll spend most of your time on your company, try to enjoy the journey.
- Start as soon as possible so you can fail, fail, succeed, fail and succeed.
4. What if I want to start a business but don’t know what kind?
Business ideas come about in three different ways. Having an idea means nothing, because if you can’t make money from it, you have nothing. If you’re having serious trouble finding the right activity or type of business, you can always take the questionnaire to find out which type of business would suit you best.
That said, when ideas are lacking, businesses basically come down to three types:
- Setting up a business that already exists and doing it better.
- Setting up a highly innovative business, which will take much more work and raise the chances of failure, but that’s where the real wealth lies if you succeed.
- Importing a business idea from elsewhere in the world that doesn’t exist in your country: a) 8 innovative business ideas from around the world; b) 6 business ideas that originated in Asia; c) 40 of the most profitable business ideas of recent years.
5. What if I have no business experience?
Then congratulations, because you’re starting from the same place as anyone else. No business owner was setting up companies at the age of three. Most of the companies with the largest market capitalisation today were started by young people who had never run a business before, so while we must keep learning all the time, perhaps the most important thing is to start now and learn along the way. You may fail by doing it this way, but even failure teaches you something for next time. If you have business ideas, every day that passes without giving them shape is a day lost.
6. Learn from Andrés Barreto’s entrepreneurial spirit
Despite his youth, his advice is motivating, to say the least, and worth bearing in mind:
Further reading
- Small businesses: how Sara Rotman did it, and her advice
- Not having a marketing plan is like planning to fail
- 50 quotes from entrepreneurs for entrepreneurs
Featured image: Jalisco Campus Party, CC BY 2.0, via Wikimedia Commons.
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