Want to start your own online business in Latvia? 10 things to consider before you start
By Elina Zara
Imagine you are financially independent, you have more money than you can spend, more free time than you have now and you could spend it travelling or on your passion projects, you never have to deal with a terrible boss again who does not appreciate your work, you can do what you want when you want because you have a freedom and you get up every morning feeling excited about your work and your life.
The specifics might differ for a person but this image of the dream life is one of the most popular motivations for people to start their own business.
Your own business can be your biggest fulfilment but there is no magical shortcut to get there and this fantasy might have its flaws. So here are 10 things to consider before you start an online business in Latvia. On in the matter of fact, any type of business in Latvia.
1. Your motivation and vision
Yes, everything starts with the right motivation and vision because it creates the drive you will need along the road, especially when you will suddenly feel like giving up. It is no secret that even the most successful entrepreneurs have such moments once in a while – the moments might be short or they might say – no, I never have such moments because only losers give up and have such thoughts, right? But everyone has doubts and fears. You will never be alone in this one.
So what I would like to invite you to do is just stop for a moment and check:
- Do you believe your idea and that you have to do it with all your heart and soul?
- Do you feel the warm rush of pride when you are getting associated with your business idea by others?
- Will you love what you do when the novelty disappears and it gets old in five years?
If the answer is yes, then you are about to start creating a dream life you deserve.
But if not – it might just mean that there is a better business idea out there, you could work on.
When you have the business idea, what would be the next thing to do? It would be good to know what to do next and what you wish to accomplish in the first place, right?
That is having a vision and setting short term and long term goals. Everybody talks about vision and goals. But the truth is vision is essential in inspiring yourself to take real action and creating clarity that helps to build your core confidence that is necessary on every step you take. Core confidence is not “I will fake it until I make it or have a nervous breakdown when I don’t”. But it is the inside force that makes you believe in yourself even when nobody else does and know that you can handle whatever comes in your way, may it be a success, setbacks or complete failure.
Part of your vision should also be how you will show people you care. “Nobody cares how much you know until they know how much you care,” has said the famous American president Theodore Roosevelt. I would like to change it a bit, to “Nobody cares what you have to offer until they know how much you care.” Every client’s motivation to buy anything from your internet business will come from their sense of trust and their own personal motivation.
Though how to create a vision and goals that will really work in your favour is a topic of another whole blog post.
How much time do you have now? And are you willing to have even less free time in the beginning before you can have more? You should also consider this because often building your own business means investing a lot more time in it than you ever thought you would need to.
3. Building a trustworthy team
Even if you are a superhuman your resources are limited. Yes, you might be able to create and design your product, market it and connect with people, do the bookkeeping and all the other tasks, but your time is very limited and doing everything alone ensures having a burnout.
Look for reliable team members who share your belief in your vision. They will not only help to accomplish more tasks but also inspire you to continue working when you are having doubts.
Most new entrepreneurs are idea generators and in Latvia, it might be good to have at least an accountant in your team so you do not have to worry about preparing balance sheets, profit and loss statements etc. according to Latvian legislation. You can hire a part-time accountant, get contacts from Latvian Investment and Development Agency, or get one in a team as full time. Web designer, programmer, someone who likes to talk with people on phone and write e-mails if you yourself do not, could also be good choices for team members.
4. Latvian legislation and how to structure your business
You will have to register at the State Revenue Service of the Republic of Latvia. In simple words, their main task is to register taxpayers and reduce the “Shadow economy” that is not paying taxes. They even sometimes send their employees as undercover buyers to test how legal the online etc. business is.
Therefore you will need to know which business form is the most suitable for your online business.
The most used forms in Latvia are:
• A limited liability company (LLC or SIA) – this is a company where you are not risking with your personal property and it has a bigger prestige in the eyes of society than an individual merchant. But you need a start capital to build it.
• Individual Merchant (IK) – this is a very good form to start if you want to build your business starting small. Bookkeeping is very simple. But the biggest disadvantage is the liability – for example if there is ever a risk of being sued by someone or you take the credit you can lose your personal belongings, home.
You can read about them and other forms more at https://www.ur.gov.lv/en/register/.
5. Use business accelerators or maybe not?
There are 15 LIAA (Investment and Development Agency) incubators in Latvia. They are institutions that support setting up and development of new businesses and offer training, mentor support, grants, and organize networking and business school events. Read more at https://startuplatvia.eu/magnetic-latvia-business-incubators.
Incubators can help with using benefits of The Start-Up Law. That includes a favourable tax regime for start-ups and possibilities of co-financing. You can read more at https://startuplatvia.eu/startup-law-benefits.
If you consider making your online business with international partners you might find Start-up visa useful. It is a temporary residence permit for all non-EU start-up founders who want to come and develop their business ideas in Latvia. The application process takes one month. Read more at https://startuplatvia.eu/startup-visa.
On paper, the agencies and incubators help also at the very beginning – to write your business plan, shape the idea. But in reality, from my personal experience, I can tell that you have to go there with a very clear vision, a ready business plan that needs only improvements, questions and specific demands from them to get anything. But it is an amazing environment for networking and learning a lot about all types of business forms including online business and how it all works in Latvia.
6. Where to get finances
Whether you already have a computer, internet and start as a solitary internet content writer or you build your own company you will need some finances. At least to eat, pay for the electricity, internet and rent the apartment you live in. So you have to consider – can you start your business with salary from your day job or should you look for other sources of financing.
No business brings money right at the beginning and a lot of times you can hope for neutral financial balance. And the harsh truth is – you will give and do a lot of things for free at first to prove your worth. People and especially Latvians like to receive free things and invest only when they recognize the worth and have developed trust towards you and your product or service.
There are other ways of finding finances:
• Use a startup programme called ALTUM. It is a state-owned development finance institution, which offers state aid for various target groups with the help of financial tools (such as loans, credit guarantees, investing in venture capital funds, etc.).
• Crowdfunding – there are various Crowdfunding online platforms working in Latvia since 2015. You can look them up, make the pitch for your idea and exchange your product/service for various amounts of funding from private persons.
• Investors – looking for investors just like working with the Crowdfunding can seem like a foreign form of art, but if you are good at selling your idea and are not scared to talk to people who have a lot of money, this is one of the easiest and effective ways to get additional funding. The main point is – what can you offer to investors?
• Selling your ideas – if you have necessary skillset and knowledge you can offer your ideas to other businesses – whether it is organizing team building events for them or selling practical ideas they could use to sell their product to people that are not yet in their clientele.
7. How to test first if people are ready to buy what you are selling
One of the best ideas I heard in Latvian Investment Agency’s business school was to make an advertisement page before the product. That is in the case you need a lot of financial and time resources to make the product you can presell it first to find out whether people would actually buy it. That is – create a website with a good copywriting and add text like “Product is not available at the moment, please leave us your email, so we can inform you when it is”. Advertise the page and you will see if people really are interested to buy from you and then you can use e-mail targeting.
If you are not yet good at SEO Business and online advertising, you can go and get to know your local target audience – interview people, ask what they need and what they feel is lacking to say yes and invest in your idea/product/service right now on the spot. You will gain extremely valuable information and people might even give you ideas on how to improve your online product.
8. Stress and time management strategy
You will have to learn from a lot of failures, deal with problems and deadlines every day. Therefore it would be good to develop your own stress and time management strategy. Every successful businessman or woman does meditation in any form possible to manage the stress. Needless to say, stress reduces productivity and can easily lead to burnout.
It can be a full meditation practice or simply practising your favourite dance moves at home for a while. Experiment with it and if it helps you to relax physically and mentally, make it a habit. When you do, you will have more energy and emotional balance.
In the basis of time management, I would say are setting priorities and maximising your focus. Do you have any ideas on how to do that? There are also many articles about this topic on the internet but the main principle that works for me is to minimize distractions. Test yourself – when can you accomplish the task in spite of receiving a lot of messages online and having chatter in the background and when do you need complete silence? And use the information you gain to plan your working day.
9. Investing in developing yourself and your partners or employees
The 33rd president of the United States Harry S. Truman has said: “Not every reader is a leader, but every leader must be a reader.” It doesn’t have to be reading only – sometimes you can gain more from speaking with the right person that reading a thick book. But the world is changing fast and to know how to manage business one has to learn a lot and expand their view. It would be a great idea to make a habit to always learn. But do it simultaneously with taking action. “Knowledge is just a potential power – you have to use it to make it your superpower” (by brain coach Jim Kwik).
Do you believe you know everything you need to start an online business? You might think you do when in fact the more you develop your business the more will discover things you have to learn. But there is no point in learning if you will just forget. Learn with a mind-set – where and when will I use this? And the best way, in my opinion, to learn is imagining you will have to teach it to someone else tomorrow.
If you feel like you need to improve communication skills or knowledge about the Latvian market, go to networking events, learn and practice there. It will pay off a lot more in future than you think. Also, don’t stay just on the internet. People in Latvia trust personal recommendations and value connection.
Also, do you have a tendency to learn from your mistakes and forget to learn from your own successes? If you do, do not forget to learn from what worked well too, do not just write it off as “pure luck”.
10. Website design and content
And the last but not the least thing in this list is considering how you can make your online business idea visual. How do you want it to look like?
Make your website pleasant, business idea sticky and valuable to return to again. Yes, it is easier said than done and it will take some experimenting. But here are few principles you can take into consideration right now:
• Keep it as simple as possible and never forget to include the main things that matter the most in the content. Website design creates an image of your business in just a few seconds.
• Use the unexpected – you need something to get the attention.
• Take things from life people can relate to.
• Credible – credibility builds trust and a sense of security. Are the photos and content in your business webpage convincing and feel real?
• Emotional – people more often make decisions based on emotions not rational consideration. Emotions build connections between people.
• Make it a story – stories are more memorable to a human brain than mere facts.
Hope the article was useful.