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Tips for (budding) entrepreneurs

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Shopware celebrated its 20th anniversary this year. Our founder Stefan Hamann actually took his first steps towards self-employment at the age of 16. Isn’t that inspirational? In this blog post, we have put together some tips for (would-be) entrepreneurs. We also asked Stefan Hamann to tell us about it – and not just in written form, but in a video interview too. Be inspired and benefit from his years of experience as an entrepreneur!

Tip 1: How do you come up with a great idea?

You always start with the idea. And of course, there are no step-by-step instructions for generating ideas off the cuff. Flashes of inspiration often occur quite unexpectedly. But it also helps to ask key questions and to do some creative brainstorming on your own or with others. Here are a few suggestions:

Try to play to your strengths and go through life with your eyes open: What problems do you or others constantly encounter? Which products or services could be improved? Do you have an innovative product in mind, or have you already developed one? Or would you like to play to your strengths as a service provider? What advantages do you have over your competitors? What makes you different and your idea a special one? In what areas can you benefit from your network (social capital)? What partnerships and commercial channels are possible? What is your motivation? Are you driven by certain values, e.g. sustainability, using your product to solve problems, helping certain individuals, groups or creatures, simplifying processes, advancing technological progress or are you just dreaming of having plenty of money? All these questions can provide you with important approaches.

Tip 2: Take the time to plan thoroughly

Keep going with your creative thinking. If have you an idea you just can’t get out of your head, then you need to consolidate it. You should give it more and more shape with a concept. Gather together all the necessary information and think through every step until you can turn it into a business plan.

The business plan not only helps you to think through your concept, but once it is actually finalised you can show it to people you want to convince of your business ideas, such as investors, banks or potential business partners.

Be critical too: do not allow yourself to be overtaken by enthusiasm and make sure you consider potential risks. If you are not able to put together a coherent business plan, perhaps it is not the right time or this is not yet the optimum business idea. These are important insights which many entrepreneurs have discovered to be true.

Your business plan might look something like this:

  • Executive summary
  • Idea and target group
  • Market and competitor analysis
  • Objectives, mission and vision
  • Strategy
  • Marketing
  • Legal matters and taxes
  • Organisation, legal form and staff
  • Financial plan
  • SWOT analysis

You may need around 20 to 50 pages for this. The drafting process can take several months.

Tip 3: There are many financing options

Is it now time to search for big investors like we see on TV programmes such as ‘Dragons’ Den’ or ‘Shark Tank’? Stefan Hamann recommends keeping the traditional route in mind and enquiring at your bank first. Local banks in particular can be very helpful.

That’s not everything, of course! Remember there are other options. How about a crowdfunding project, for example? For products and ideas which have social added value or which target a passionate fan base in particular, the potential can be exploited here.

Tip 4: Try it out first or focus fully?

Self-employed people constantly wonder how to allocate their resources and how much time their self-employment should take up. To start with, many entrepreneurs experiment and deal with their own business alongside their main job which provides a regular income. But at some point there comes a time where they need to make a decision: Is it time to quit my normal job and concentrate 100% on my own ‘baby’?

Stefan Hamann became self-employed as a schoolboy: “I believe that what is important in the initial phase is that you have good time management, you set yourself realistic targets, and your own business grows slowly but steadily. You eventually reach a turning point where time, energy and income are out of balance and you definitely have to make a decision and choose your main focus.”

Tip 5: Get a little bit better every day

As the saying goes: “You never stop learning.” This also holds true for self-employment which often turns out to be a process of continuous learning. That’s why we asked Stefan what he would have done differently in the course of his business, looking back from today’s perspective. His answer can be summarised in three points:

  • Focus on one topic much sooner
  • Think about the products internationally right from the start
  • Relinquish responsibility much sooner, step back from the technical level yourself and find the right people to do it

In essence, he advises (budding) entrepreneurs to be prepared for a rocky road: “Bootstrapping* first – but you’ll have to withstand some pain and gain experience. Only consider scaling and ‘thinking big’ once your business model is bullet-proof and you have achieved your first successes. Don’t pursue just any old absurd visions, but make sure you think iteratively, question, optimise, learn and keep going. Don’t bury your head in the sand if something doesn’t work at the first attempt. Make decisions on the basis of data and continually incorporate lots of small optimisations so that ultimately you get a little bit better every day.”

Independent in ecommerce?

If you want to become active in the field of ecommerce, you’ll find step-by-step instructions in this blog post on developing an online shop concept. The business plan along with the market and competitor analyses, as well as many other aspects, play a role here.

Of course, at Shopware we have the right shop system ready. You can create an online shop free of charge with Shopware Cloud. Our starter edition is based on a freemium model for the simplest entry into e-commerce. This means that: you only incur costs once you make sales – and even then at a low commission of just 3%.

Test it now

More insights from Stefan Hamann in this video interview

Follow Stefan on Twitter

stefan_hamann

Stefan Hamann

Stefan Hamann is the founder and CEO of Shopware.

Do you want to hear more from him?

Then follow him on Twitter at @stefan_hamann!

 

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* Bootstrapping is a way of financing companies without external capital. The company tries to finance itself right from the start – and therefore has to generate revenue quickly. Advantages: Autonomy and a focused look at economy and efficiency.