Žinau Viską Starting a business

Starting a business

Starting your own business is about the essential first steps: assessing the resources available, researching your business idea, evaluating your idea, and preparing to develop it.

ASSESSING THE AVAILABLE RESOURCES

Before you start looking for a business idea, objectively assess whether you have enough resources to develop the idea into a successful business. Developing a business idea will require resources such as your time, communication, creativity and entrepreneurial skills, knowledge and experience, acquaintances, real estate, tools available to achieve the goal, financial resources, etc.

FINDING A BUSINESS IDEA

There are many sources of business ideas:

Personal need. It is always a good idea to start looking for a business idea in the immediate environment before starting to develop it. Assess what product or service you or your family often lack, what you would find useful, efficient and necessary. Be creative and practical – identifying a missing product or service can be a niche for your business.
Available professional skills. Starting a business with specific experience or education in a particular field is useful and expedient – you will realise your professional skills and the buyer will receive a quality product or service.
Experience from other countries. Use good practices and examples from other countries – creating and developing goods or services that are recognised abroad in Lithuania can be a great idea for a new business.
Be open to innovation, observe people and their preferences, choices and global trends.Often the popularity of new goods or services develops at lightning speed – if you spot a potential idea, develop it.

EVALUATING A BUSINESS IDEA

Before you start your business, critically evaluate your idea by answering the following questions:

How much will it cost to start the business? Do you have enough funds?
If you need additional funding, will you be able to meet the requirements of the banks?
How is your idea better than others already on the market?
Is the market for your product or service growing or shrinking? What market share could you capture?
Why will there be a need for your product or service?
Who will be your consumers and what are their characteristics?
Who will be your competitors and how are you superior to them? Will you be able to compete with existing and established competitors?
When will the production of a good or service become a profitable activity?

Share your idea. Sharing it can benefit from the opinions and observations of friends, family and others. Sharing an idea can help you see its weaknesses and improve it. It is also a great opportunity to find business partners.

PREPARING TO DEVELOP THE IDEA

CHOOSE A BUSINESS PLAN:

Set goals – identify what action will lead to what result.
Identify potential threats and opportunities, strengths and weaknesses.
Using the business plan calculator, check the profit you will make and the potential and potential loss in the first 5 years of the business.
Decide on the form of your business – whether you will be a sole trader or a business licence, or whether you will set up a company – a small partnership, a private limited company.
Take care of the necessary permits and licences. The Business Memo will help you find out what licences you need and how to apply for them.
Arrange the necessary start-up funds.

BUSINESS FORM

If you have decided to set up a company, you should first decide which legal form is the most appropriate for your chosen objectives.

According to the degree of liability, legal persons (LPs) are divided into legal persons with limited and unlimited civil liability. A member of a legal entity with unlimited civil liability is liable for the obligations of the legal entity with respect to the assets it owns or holds in trust. A participant in a limited liability company shall not be liable for the obligations of a limited liability company.

According to their purpose, legal entities are divided into public and private. Public and private legal entities are usually distinguished according to the objectives of the founders (public (not for their own benefit) or private (for material benefit)), the activities and the use of profits (participants in private JAs are entitled to a share of the profits, while profits of public JAs may only be used for the purposes of the activity).

Some of the most common legal forms:

FINANCING

Today’s business finance market can be divided into several sectors, each with different conditions and requirements for borrowing or attracting investment.

Banks and credit unions are the most popular sources of business finance. These business finance institutions tend to provide loans for larger amounts and longer terms. Banks and credit unions are cheaper for businesses to borrow from, but usually require collateral for the loan and have high risk assessment requirements for the company. As a result, such finance is more often available to older and larger businesses and the process of obtaining a loan takes a considerable amount of time.

One source of business finance is venture capital funds. Venture capital funds invest in businesses seeking to implement promising business projects with high growth potential, targeting global markets.

START-UP SUPPORT:

EMPLOYMENT SERVICE SUPPORT

A subsidy under the Self-Employment Support Facility is available to people who are creating jobs for the first time in a micro-enterprise they have set up for themselves.

The subsidy for self-employment support can be granted after the establishment of an individual employment action plan with the Employment Service consultants, which includes a self-employment support measure, when the self-employment is established:

disabled persons of working age with a level of incapacity for work of up to 25 per cent or a severe disability;
unemployed persons who are disabled persons of working age with a level of incapacity for work of between 30 and 40 per cent or a moderate level of disability;
unemployed persons under 29 years of age.

In assessing applications for self-employment support, a strong emphasis is placed on increasing employment in rural areas, in areas with the highest unemployment, and on the applicant’s own contribution, the amount of support requested, the number of people planned to be recruited to the job to be created, and the applicant’s ability to perform the functions of the job in the job to be created in accordance with the qualifications and work experience available to him. For more information, see the Employment Service website.

MUNICIPAL SUPPORT

Municipalities have a range of support instruments ranging from reimbursement of initial start-up costs to reimbursement of expenses for participation in fairs or exhibitions abroad.

Free advice on setting up, expanding and exporting a business is also provided by:

SUPPORT FROM THE MINISTRY OF AGRICULTURE OF THE REPUBLIC OF LITHUANIA

This support encourages the start-up of new businesses in rural areas, promoting the economic activity of micro- and small enterprises, farmers and other natural persons in rural areas, covering a wide range of non-agricultural businesses, the production, processing and sale of products, and the provision of a variety of services, including agricultural services. The Ministry of Agriculture of the Republic of Lithuania currently has 4 support instruments:

Support for the establishment of young farmers
Support for setting up economic activities in rural areas
Support for small farms
Support for investments for the creation and development of non-agricultural activities

For more information on the Ministry of Agriculture’s support, visit the Ministry’s website.

CO-WORKING CENTRE “SWARM”

The co-working space “Swarm” is a non-traditional type of business development space created by “Versli Lietuva”, which is designed for small and medium-sized enterprises that have been operating for no more than 5 years to cooperate and expand. “Swarm is focused on digital and creative industries businesses.

Swarm provides free services:

Mobile office;
High-speed internet;
Organisational equipment;
Meeting room;
Expert training;
Business mentor support;
Network of business advisors.

Find more information about Swarm hera.