How to start a business

When it comes to starting a business, we must first distinguish between the bureaucratic aspects – such as registering the company with the commercial board; tax regime - such as simple, presumed, real, etc. - and issues related to the business itself.

It is in the latter that the art lies. In all others, there are not many alternatives to do things right. And to guide the entrepreneur, there is a vast legislative framework, and a multitude of lawyers or law firms, accountants or accounting firms at their disposal. 

When it comes to aspects related to the business, despite the vast literature on strategy, marketing, business models, management models, etc., the number of strategic, tactical and operational combinations is practically infinite.

That is why it is so important to master the "science", in order to be able to apply the "art". Generally speaking, only the science can be spoken of; the art can only be applied on a case-by-case basis.

So, generally speaking, the first most important aspect when starting a business is to elaborate the much-famous - and much-abused - business plan. I say much-abused because what one sees the most out there are business plans that are not business plans. They are just economic and financial projections elaborated without due reflection, without the due ideation process. The name for this is fiction.

And what involves the due reflection? The first step in the ideation process is to think about the business design, that is, about all aspects of the new business.

And we can think about business design as a large ecosystem, which brings together other subsystems, all interrelated and with various overlaps, namely: Market Strategy, Competitive Strategy, Organizational Strategy, Marketing Strategy and Business Model. 

Additionally, it is necessary to understand how political, economic, regulatory, legislative, social, technological etc. issues impact your business design, and how these same issues may impact your business design in the future. 

And, attention: it is fundamental, but really fundamental, to listen to other people before, during and after the elaboration of the plan. This is because the entrepreneur's bias is optimistic and the tendency is for him to "make it work at any cost". And we know that things only work "at any cost" on paper.

Finally, it is worth remembering that luck is always a relevant factor, even with the best business plan in the world. But without a business plan, the entrepreneur will rely exclusively on luck. And relying exclusively on luck is much riskier. Can it work out? Sure. But it will be the work of chance.