Starting without knowing how
Starting a business with no experience when you must
Lost your job and must start a business now, with no experience? Start with what you know, sell before investing, mind your benefits and avoid costly debt.
bairogonzalez.com team, drawing on Bairo's story · Published
Many people start a business not by choice but out of necessity: the job ended, age weighed against them, the income doesn't cover the bills. And then comes the fear of knowing nothing about business. This page is for those who have no time to prepare first: the bills arrive next month. If you still have an income and can study the field before taking a risk, the path is another one: How to start a business from scratch with no experience. For those in a hurry, the truth is that every entrepreneur started with no experience. What sets apart those who last is learning fast and making cheap mistakes.
What to do now
- Solve a real, nearby problem. Start with something you understand and that the people around you need: a service, a simple product, a skill you already have. A business is a solution to someone's problem.
- Sell before investing. Offer it to people you know, take orders, do the first job. Only invest in structure once you see that someone pays.
- Formalize early. The MEI (individual microentrepreneur) is simple, cheap and gives you a CNPJ, the ability to issue invoices and social security benefits, within the category's limits. Find out more on the federal government's Entrepreneur Portal. One caution for those who have just lost their job: an active MEI registration can lead to unemployment insurance being suspended, since it suggests you have your own income. You can appeal by proving there's no revenue, but check the rules on gov.br before registering.
- Separate household money from business money. Even if it's small, have an account, or at least a notebook, just for the business. Mixing the two is the cause of many failures.
- Learn the basics of management. Price, cost, cash flow, customer service. Sebrae offers free courses and support at 0800 570 0800.
- Surround yourself with people who know. Mentors, other entrepreneurs, an accountant you trust. Ask a lot.
- Be careful with debt to get started. An expensive loan before you have customers usually sinks the business. Start with what you have.
- Accept making small mistakes. Small mistakes teach. Big mistakes, when all the money is on the line, knock you down. Test, adjust, grow little by little.
When it happened to Bairo
Bairo Leandro Gonzalez Martinez started businesses many times without knowing exactly how. After hard years, he started over with a neighborhood salon, opened with his partner. From it he created a hair-treatment course, in a field that had not yet found its place. Then a cosmetics brand of his own.
But the moment he most embraced "I don't know," he says, came after going broke. With many people depending on him, he made the most unlikely decision a broke man can make: instead of going back to familiar ground, he headed for the unknown. He decided to do something he didn't know how to do: build a currency, a bank and a navigation network.
To someone who had never done any of it, the list sounds like madness. To him, it was the same logic as always: if no one is doing it, someone has to. It went wrong the first time. He kept going.
The path
No one is born knowing how to start a business. Bairo learned by doing, getting it wrong and coming back. He says every no is the ground of a yes: so is every "I don't know." It's from there that you ask, study and test. Start small, formal and honest. The experience you lack today is exactly what you'll have a year from now, if you start.
Experience isn't only what you've learned in business. Anyone who has raised children, run a home on little money, worked in customer service or solved problems in their community is far better prepared to start a business than they think. Make a list of those experiences and see how they apply to the business. You probably know more than you think you do.