The right way to start a business
A business is defined as an entity engaged in commercial, industrial, or professional activities be it for profit or not for profit to fulfill a charitable mission or further a social cause.
In real life, a good start is a half win. First-time entrepreneurs face common challenge to find the right way to start a business. Most of time people start business based on their ideas or seeing others business without any research.Believe me,this approach is like inviting the trouble by own in life. In today’s time,when information is on tips,data analysis become easy,opinions are freely available in social media,research based busienss approach increases the chances of success many times.
The right way to start a business depends upon following three pillars
1.1.Target Market -What type of market you want to sell your product & service to. For example international or local, urban or rural, etc. Based on that you can design your business model to sell your product to the target market.
2. Target customers– Whom you are going to target like some want to target youth with high income, some want to target middle age middle income, etc. This will help you to develop your pricing and marketing strategy.
3. Update yourself- “The best learners are the best earners” .Invest in learning new skills.In fast changing world customers prefer to go with the market leader.
Based on the above, develop your business plan which will cover the operation strategy like how you are going to arrange investment, what will be the team structure, how long you needed to become profitable, how you face the competition, what will be the sales/profit figure, etc.
The investment plan should cover the requirement of capital, source of capital, and period for the capital requirement.
9 mantras to become successful in business
- Start small and aim for big
- Start without loan
- A research-based approach to saving your time and money
- Find the customer first then develop product
- Try to build the team
- Innovate to growth
- Do not copy, be original
- First, earn then invest
“No one can stop you from shinning if you are standing in your own light.”
During your planing phase calculate the following to assess the strength of proposed business
PM = (R — C)/R. where
- PM is Profit Margin;
- R is the revenue received which may be calculated in different ways depending on type of PM:
- C Is the cost associated with the item sold and may be calculated in different ways depending on the type of PM.
Net Gain is typically used in situations where an individual acquires something and wants to evaluate its current value with respect to its original acquisition value (also known as “basis”). It’s calculated like this:
NG = (SP — B) / B. where
- NG is Net Gain;
- SP is selling price
- B is the cost basis.
Most of time entrepreneurs try to copy others model without analyzing their strength and weakness. I suggest you to build your own business model and respond to market proactively.
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Read my book “A to Z of Business Growth“