“Choose a job that you like, and you will never have to work a day in your life.”
– Confucius, Philosopher
Presently, many of you are thinking about how to start up. Look deeply inside yourself, get to know yourself. What are your true desires? How do you want to start your own business? The cornerstone of each business is primarily the personality of the founders. How they build a startup depends on how confident, motivated and dedicated they are.
After the mental foundation of your business is laid in your mind, you need to start acting. Every construction begins, of course, with an idea, or rather a plan.
So, let’s see how to start your own business.
When a person wonders how to start up, the first place where he goes is, of course, the Internet. Today, the network has a huge variety of motivational articles, inspirational videos and quotes. They all say: do not be afraid, do it, keep your courage! If you fall, get up and move on.
But…okay, where to go next? What specific steps need to be taken to build a startup? And just a few articles show us how to start up.
Therefore, let’s get into the nitty-gritty. In this article, we propose a certain tactic of action. Namely, a system of 4 steps starting from a hypothesis until a business model.
How to Begin Starting Up
- Find the best private equity funds.
- Visit their websites. You need to find companies that the top private equity funds call their greatest successes in the last 20 years. Thus, you skim the cream off.
- Next, you do an analysis of the companies and identify the leaders.
- After you have selected the companies with the biggest EBITDA, you study niches and compose your business idea.
How to Find the Best Private Equity Funds
Generally speaking, private equity fund is a private capital that buys companies, takes control over them, and then resells them. Such funds approach the business in a very conservative way. Given these premises, they are investing mainly in the companies that have a potential profit multiplier.
Therefore, very simple actions can be done. Choose the top 100 Private Equity Funds in a particular region. Then determine the time period, for example, 20 years. And look at these sites, which companies the private equity funds consider as their biggest successful cases.
If a fund buys a company, and then sells it, the profit can be 5-10-20 times. In such a case, this is a great success. And the funds willingly share their successes. All this information is publicly available. You can always find top 10 successful companies in the online portfolios of such funds.
How to Analyze Portfolios
Thus, to understand how to start your own business, you must first analyze the portfolios of the top private equity funds. Your goal is to find their most successful deals in the last 20 years.
First of all, create a list of such funds.
To do this, simply enter a query into a search engine. As a result, you’ll get quite a lot of information. For example, Wikipedia offers a whole list of companies where we can find the largest private equity firms by PE capital raised.
After that, create a regular excel file, add all the information you are interested in there and identify the leaders.
How to Study a Niche
For example, one of the private equity funds you’ll be looking for is the Blackstone Group Inc. (NYSE: BX). This private equity has been operating for over 30 years. This fact alone speaks in favor of the credibility of this company. Most likely, it is worth trusting. Its investment portfolio includes industry giants such as Hilton Worldwide, Republic Services, and many others.
So, looking at the cases that the company presented on its website, we find among other things the solar panels. In fact, a large residential area in New York has such panels on the roofs of its houses. And this place is not cheap. Stuyvesant Town is a NYC area where the average household income is more than 1.5 times than the average one in the city. As it can be seen, this is a very good investment and profitable business niche.
Now you know how to build a startup
According to this principle, do a thorough analysis of all portfolios of large private equity funds. This will give you a fairly understandable picture of those businesses in which investors are not afraid to invest. This means that such investors will be, firstly, easier to find. And secondly, a business that has already proven itself to be profitable is likely to continue to be in high demand. Consequently, there will be plenty of customers too.
When you think about how to build a startup, try to focus on what you truly like to do. If you don’t feel comfortable in your niche, it won’t work. After all, a startup will only be successful when you love your business. Indeed, entrepreneurs must do their utmost to be on top.
Upon selecting the niche, you can start writing a business model. But we will talk about it in the next article.