January 16, 2015, POMPIDOO general topics

Irina Kuzmina, the founder of POMPIDOO, was asked to provide her comments on the entrepreneurial environment in Latvia, and to give some tips on how to assess the size of the start-up capital required for a new business.

The amount of start-up capital depends on various factors: will the company produce a physical product or offer a service; will the idea solve a specific problem or grant aesthetic pleasure; will it be a remarkable innovation or a universal proposition? “All of these questions and answers help to effectively assess the scope of resources necessary to open a start-up business, as well as then potential time to market for the product or service,” says Irina.

She advises that at least 5000 EUR is required in order to register a company, cover employees' salaries and taxes, and expenses relevant to individual businesses and industries. It’s best to offer the chance to invest in phases during a dedicated time period, and to have more than one investor which will make the start-up foundation more realistic. “On average, I’d say you're looking at approximately 20,000 EUR”, suggests Irina.


Talking about possible timelines, in Irina’s opinion, one year is generally a good measure. This is long enough to show if there is a demand for the product or service, if it is popular on the market and generally works, and whether clients are satisfied and there’s the potential to increase turnover, even though the company might not be profitable at that time. She also mentions that it’s important to evaluate the volume of “free resources” available to the start-up - that is, how many people will be able to work full-time, as this will greatly influence the speed of development and growth.

Private business doesn’t provide a safety net – every company has a history of highs and lows. “The key is not to lose faith and to rationally think through what the reasons for the lows could be - what could be changed or done differently? If clients are happy and there is a belief in the idea itself, then the energy and patience to confront periods like these will follow. This cannot be done without a trusted team, who can help with discussing solutions and sharing support and encouragement!”, Irina adds.

Interview by Anda Asare,“Dienas Business” Show all posts