Starting Small business is easy
Many times first time entrepreneurs approach me that they are facing challenges in their job or they are not satisfied with their current job and they want to start their own business. Every profession has challenges and dissatisfaction no never quit your current profession with fear of failure or boredom. Try to do something more in your life which can add value to yourself and society. One of my readers, Steven was facing fatigue in his six-year-old job, he was a developer. I suggested to start freelancing and he explored the freelancing option with continuing his job. Recently he told me that he is doing well in his job and now he become team leader due to learning more skills from his freelancing work. Encouraged by his response, here I am writing about starting a small business in cities. Starting small business is easy. You must have read about the success stories about the startups.This article will help you to answer lot of questions like below
1. How to become entrepreneur?
2. How to start small business?
3. How to start small business without investment?
4. How to make small busienss profitable?
5. How to track progress of business?
Small business is defined as a privately owned corporation, partnership, or sole proprietorship that has fewer employees and less annual revenue than a corporation or regular-sized business.
Small business has potential to become big with low risk. First-time entrepreneurs can start their small businesses with low investment and moderate skill sets. Starting your small business you can get the freedom to take your own decisions and give employment to other people.
Entrepreneurship is forever learning things no one teaches at school. It is very uncomfortable! But it is a great way to learn and live.
If you want to start your own business be ready for 1. Learning new things 2. Ups and downs is business 3. Unlimited potential to earn
Starting a small business in a city has many advantages some of them are as below to for a better understanding
1.Loyal customer base –in cities population density is quite high so getting a large number of loyal customers in a small area is very easy.
2.The Good number of sales channels like distributors, retailers, online, offline, etc.
3.B2C, B2B, and B2G opportunities –In cities mostly big offices, large societies and industries are available.
4.Easy credit availability –Most offices of banks, financial institutions, etc. are located in cities so it becomes easy to approach them and get credit.
5.Easy to market –In cities, people are highly dependent upon digital media, newspapers, etc. So marketing becomes easy.
Five Success Factors
The success of any business largely depends upon five factors
3.Your competitive offerings
5.Availability of skill workforce
Five step Approach
Before starting any business, follow the step-wise approach
1.Do market research- before jumping into market,do some research about competition and customer choices.
2.Do investment analysis-Analysis about investment and pay back period will help entrepreneurs.
3.Do Pilot-Test your business idea on pilot basis then go for scale.
4.Build personal brand-Personal brand will help you to attract investors,customers and partners.
5.Automation and digital adoption- Automation and digital practices will help your business to become trendy.
After doing the above steps prepare your business plan which covers
1. Target customer
3. Target competitors
4. Target Profitability
5. How you are going to offer something better to customer to achieve your targets
I did the market research and find out that some small businesses can be started by first-time entrepreneurs, like food joint, garment shop, mobile shop, electronic shop, automobile shop, education center, web designing, digital marketing, hospitality services, tour operator, food delivery, financial advisory, event management, old age home, personal wellness, beauty salon, etc. I have suggested the above business based on my business selection matrix which comprises various factors including skill set, investment, risk, and profitability.Below figure will help you to select the business.
Believe me if your approach is research based with low investment high rewarding then starting small business is easy.
How to profit from small business
Profit can be earned from small businesses through 1. Selling more 2. Investing less 3. Fast decision making 4. Innovative operations 5. Low operational expenses
For example if your investment in your small business if INR 1 lacs and your daily profit is 2k then in a year you can earn 5 lacs assuming 250 days working. This profit rate is modest in small business.
Key indicators to monitor Success
Small business have limited customer base with limited resources,so monitoring the key ratios become very important for them. Three areas are most important for small businesses
a. Productivity b. Debt c. Profitability
Tracking the business growth is very important for small businesses. I am sharing 10 key indicators to track the overall health of business
1.Monthly Debt /sales/equity ratio
3.Increase in no. of customers
5.Average spending by customer
7.Daily new inquiries
8.Expenses /sales ratio
Very common and easy to monitor indicator to measure success of f small business is Net Gain (NG).
NG = (SP — B) / B. where
- SP is selling price
- B is the cost basis
Startup cost to start small business
There are many expenses required to start any business . To start small business cast can be divided broadly into eight catogery
1. Cost of working space rent or purchase
2. Salaries of team at least for three months after starting business
3. Purchasing equipment/technologies etc.
4. Marketing ,advertising,campaigns etc.
5. Various registrations, permissions,licensing etc. expenses
6. Research and development cost
7. Fund raising cost
8. Any fee ,royalty etc. paid to start business
Who can start small business
Any adult individual who want to earn have moderate skill level and have capacity to invest small amount can start small business.
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