Young people often have first jobs that are less than ideal, and sometimes they encounter managers who seem to relish the idea of making their lives harder. While starting a business often sounds like a great way to escape having a boss, being a business owner requires very specific skills. The following steps can help those with the drive to become their own boss. 

Several entrepreneurs and business executives who are, or have been, based in Miami shared their knowledge and experience in starting a business and finding investors. David Lohse, the Co-Founder of GGL Solutions, Rebecca Danta, the Managing Director of Miami Angels, an investment group, and Wences Casares, the Ceo of Xapo, one of the largest bitcoin banks in the world, all offered some sage advice for entrepreneurs dreaming of starting their own business.  

1. Solidify Your Ideas 

Casares, 46, who believes in the power and imagination of young entrepreneurs, recommended they use their imaginations and focus on new ideas and the future, and on how their product or service will “make the world better, safer, or more efficient.”   

Lohse, 19, stressed that first entrepreneurs must “solidify your idea — know every aspect of it” so that they can accurately “calculate costs, conduct proper market research, and talk to investors without any issues.” He warned that entrepreneurs risk losing potential investors by “not being able to answer every question about their products or services.”  

      2. Identify Your Market 

According to Danta and Lohse, having a great idea isn’t enough. A good idea needs a large market and must address a “real point of pain” for potential users. A point of pain means something that the customer or client finds it difficult to live without. Danta recommended researching the market first to ensure that your idea is not “a copycat idea,” i.e. something that would offer a product or service that is similar to something already on the market. “Next, you must differentiate your product,” she said. 

Lohse concurred that market research “is one of the most important steps for a startup,” adding that “knowing what your target audience wants will make your idea succeed.” Lohse emphasized the need for the right kind of market research early on, because “market research allows you to further expand your knowledge regarding whether your idea will work or not.”  

Lohse provided an example of the right kind of market research for one of his business ventures. He and his partners walked around the UC Berkeley campus asking college students, their target audience, “questions regarding problems that our idea would solve” rather than questions “directly about our idea.”    

      3. Find Potential Investors 

Finding an investor and convincing them that the idea is a marketable product or service that fills a need is crucial. Danta recommended researching investors online and networking, especially on Twitter, so that you can introduce yourself and your company to investors.  

The investor must also be convinced that the entrepreneur can launch and execute all the necessary components of getting that product or service to the customer. Danta warns that many entrepreneurs don’t put in the time and energy needed to keep their ideas growing because they think the idea will succeed on its own. They ignore that success really hinges on “execution.”    

If the CEO of a startup is not a good communicator, he or she is at a real disadvantage when pitching ideas to investors. Not being able to deliver a concise, enticing, and convincing sales proposal often leads to investors mislabeling entrepreneurs due to their poor communications skills. Danta also emphasized that entrepreneurs, especially young ones, should understand that finding the right offer requires having a good pitch deck that makes the information easy to digest.  

      4. Understand How Investments Work 

Casares emphasized the importance of understanding the deal itself when you get one. Young entrepreneurs should make an effort to understand how investment works and the value of an investor’s money.  

According to Lohse, “many might think that money is all that matters when looking at investors”; this is not the case. Just as you should use market research to identify potential customers, you should make an effort to identify an investor who is “the perfect fit for you” and your company. Not only do you and the investor have to ‘click,’ but “both parties have to agree on the terms” of the deal.

Additionally, Lohse warned that if you can’t agree on terms, then that investor isn’t the right one for your company. Lohse revealed that he and his partners “reached out to a well-known angel investor. We thought that he would be a great match for us, but after hearing his proposed terms, we had to decline the offer.”  

Danta called Twitter “the best and easiest way for the new generation to connect with investors online.” Entrepreneurs can find investors through Twitter by setting up an account, following investors, and liking and commenting on their posts. But she also warned that in the very early stages of a startup, “it can take up to a year to find the perfect investor or an investor at all.”  

After you follow these four steps, it’s time for the next phase in the process: actually building your company. But with a strong idea, market research, and an investment deal that works for you, you should have a strong foundation.