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It is a well-known myth that you need money for making money. Lots of people claim that they could be running some kind of business projects, if they only had the starting capital. Many people, who have made plans of starting entrepreneurship, bring lack of capital as an excuse for not getting ahead with their plans.

But do we really need money for making money? In fact, there exist lots of examples, when huge amounts of starting capital have been unnecessary for creating a very profitable business. One of the best examples is YouTube. It was founded in February 2005 by Chad Hurley, Steve Chen and Jawed Karim. It started from the search of a sensible method to share videos over the internet for personal use. In November 2006, Google bought YouTube for 1.65 billion US$.

But what happens when a person with insufficient financial knowledge acquires a huge amount of money. It can be possible by winning a lottery or inheriting some funds. In many cases the equity gained by a windfall is partially or totally lost. You may think that they just spend it, but this is not the most common case. More often they lose their money by disastrous investments or bad business deals. If you suddenly have a lot of money, it does not make you an investor or a businessman. You are not smarter than before. Frequently, having a big sum of money leads to an excessively high level of self-confidence and underestimation of business risks. In many cases, those newly rich get many business offers from their friends, who are not professionals either, and so they get involved in business project with doubtful value.

Too much capital can be disastrous for a starting company, as it could lead to inefficient action. If you have lots of capital, then you are likely to start from the very beginning with relatively high office, communication, marketing, transport and other costs. You are likely to use many standard, expensive and inefficient solutions for your business processes. But, in the situation where you have a limited amount of starting capital, you are forced to work out how it is possible to run your business on low costs. It forces you to be creative and flexible and develops entrepreneurial habits.

To start a successful business you firstly need the skills. Many people think that you need to have a good business idea, but actually a good idea is useless, if you are not able to apply it. There are lots of people, who have many good business thoughts, but who will not be able to put them into practice. But if you have the necessary skills for entrepreneurship then it is always possible to apply other people’s ideas. The most important skills for entrepreneurship are:

• Creativity and flexible thinking. In order to be better then your competitors, you have to do things better than they do. The most successful businesses are based on both new ideas and new ways of applying these ideas. Why most of the businesses do not make much money? Because they follow a well-known path, their products and services are not distinguishable from their competitors’ ones and they are just copies of other businesses. They are just another hardware store, travel agency or restaurant.
• Ability to predict future. The world is changing faster and faster. Products, services, production processes, marketing and customers’ needs are constantly changing. So, in order to cope, the entrepreneur must be able to see what the future will look like, and take necessary actions.
• Ability to attract capital and labour. An entrepreneur must be able to sell his idea to employees or owners of the capital. You have to attract other people’s money to raise capital. You have to attract people to your team, who are impressed by your plans and who will enthusiastically contribute their time and effort for your success.
• Ability to take action efficiently. An entrepreneur cannot just sit, do nothing and wait for the end of the day. Business is to a great extent, putting things into practise. You have to be able to manage yourself and your time, plan your action and avoid wasting time on rubbish.

Fortunately, we can enhance all our skills, which means that we can get better and better with our business skills if we work on them. The progress is not made overnight, but if we devote our effort to constant improvement, we gradually get better every day. In the end we will be able to do everything we did not even dare to dream before.

kristjan Business business project, business skills, creativity, financial knowledge, self confidence