The Blog will provide Answers to the many Questions in the Mind of anyone who wishes to start his/her own Business but has no past experience.
Here are Some Points to Ponder Upon if you Planning to Start Your Business
Step 1- Decide whether Entrepreneurship would be appropriate for you – as a career option
Most of us have dreamt of Owning a business – at one time or another. And some of us have wondered whether Entrepreneurship would be appropriate for them.A series of questions below will help you examine your personal objectives and whether entrepreneurship is appropriate for you.
Why Consider Entrepreneurship? Why have your own Business? Why Startup? Is for the Below many reasons ?
Putting Your Own Ideas to Work
The freedom to pursue your own ideas and intuition is a major advantage. You can spend your time and energy focusing on developing your own ideas and converting them into a successful business model.
You Are Your Own Boss
You make the decisions, you decide who to work with and decide what work to do. There may be instances where you dont agree with the corporate culture of a firm, or how they conduct business. Here you get to choose how you will run the business, what corporate culture to instill. Google, at the start up stage had a simple motto- Dont Be Evil. They are known to have a corporate culture which is far different to the prevalent corporate culture. By starting their own company, the founders had a chance to infuse culture and business practices they believed in and you can do the same when you start your own company.
Choosing the Location
Choosing a business location will be your own decision. You may choose to operate close to your market, or you may choose to operate close to home. The decision is entirely yours.
Large Earning Potential
By starting your own business, you will be the owner and own most of the equity. If your business is successful, you have the potential to earn a lot more. Some people may view their jobs having no career growth or financial growth prospects. If you feel the same way, then maybe it is time for you to consider starting your own business. However, the downside is that there is no guaranteed pay check, but then again, there is no guarantee for your job security as an employee.
Choose Your Working Hours
More than anything, this offers flexibility in working hours rather than working less. Most successful start-ups are the result of long hours and hard work. But the upside here is that you get to choose when to go on vacation, when to work and so forth. Just as long as you get the required work done, there is no stopping the flexibility.
Get Involved in the Operations of Your Business
Since the start-up is your idea, your business, you are free to involve yourself in any aspect of running the business. This is best illustrated by an example. Steve Jobs, the co-founder of Apple Inc., involved himself in every step of the business, right from idea generation to design, manufacturing, marketing and the in-store experience. He was able to devote himself entirely to his business and as a result his products and company are one of the best in the world. Seeing your business grow from ground up can be very satisfying and fulfilling.
Make Your Business a Family Asset
Many of us want to leave behind a sense of financial security for our family. For example, since you will own most of the equity in the company, you can pass it down to further generations so that they have a sense of security. Maybe your children can take over running the business from you when you are ready to retire. Family businesses can also provide employment to other members of the family.
But Is Entrepreneurship/Business Appropriate For You?
What Do You Love Doing? Or Love Doing In Your Job?
Consider your passions and what you enjoy doing. Many success stories have come from the fact that people pursued their passions and dreams. Think about this- would you be happy working 40+ hours a week on a job that you dont like or would you rather spend those hours working on something you love doing.
Are You Excited About Your Idea?
Enthusiasm will be extremely important to the success of your idea. After all, if you do not get excited or generate enthusiasm by thinking of starting your own business or your idea, then how will it be different to your current job? Your enthusiasm will make others sit up and take notice of your idea/business.
Is Different Enough?
Many people are under the illusion that there are no new ideas out there. While that is not true, you have to consider the fact that very few businesses are 100% different from others. What you need is an idea that Target Segment cares for and is willing to pay for it.
Would it Pain You if You Never Pursued the Idea?
Regretting not following up on your business idea can be as painful as the fear of failure. While this doesnt mean that you should pursue every single idea you have, give yourself a chance to succeed with the one that you truly care about.
Is it Worth Giving Something Else Up?
This is a very subjective question. Each person will look at it differently. Sacrifices may include giving up the perks that come with a corporate job. Since you will have to invest a lot of time in your start-up, this may mean that you would have to sacrifice spending time with family, friends. Starting your own business may also mean that you will have to live on a tightened budget for a while. You need to look at the potential sacrifices you will have to make. If the list is too long, or you cannot cope with the sacrifices then it may be that you are not ready for entrepreneurship just as yet.
What Have Your Life Experiences Been?
Your past experiences will help determine if you should consider entrepreneurship. If you are unhappy with your current job, or face limited career prospects, then you should consider becoming an entrepreneur. But again immediate sacrifice of monthly income from job is it worth ? Is your Business Idea strong enough to give you your returns and your financial background stable enough to sustain you in the Business Growing face.
How Strong is the Feedback?
Feedback is essential to the development of your idea from just a thought to a full-fledged business. Try to see how people react when you present your idea to them. Receiving feedback from discussions with people may mean that your idea has interested them. Developing your idea is an on-going process and if your idea is garnering interest then you are on the right track.
Step 2- Discover and Identify the Market Opportunities
Identify Market Inefficiencies
When looking at a market, consider what inefficiencies are present in the market. Do you have an idea on how to correct these inefficiencies?
Remove Key Hassles
Take a look at some of the key hassles customers face when buying or using a product or a service.
You dont necessarily have to have a new product or service. You can be innovative and improve a product, a service or a business process.. Purchasing processes in some products categories are still a major source of irritation for customers. Think how you can improve and provide a superior alternative.
Customers Desire to Experience Something New
You may or may not have a new business idea or business process to serve a market. And perhaps there are no market inefficiencies for you to exploit. But sometimes, gaging the customers desire to experience something new can be a successful strategy. Can you innovate on customers experience in existing business models?
Pick a Growing Sector/Industry
When considering a new business, it is important to look at whether or not your idea is in a growing sector or industry. For example, a lot of start-ups in the IT sector in India did very well because there was huge demand in that industry and the growth was outpacing other industries. Investing in a stagnant sector/industry may not best serve your interests, unless you identify a market inefficiency that you can exploit.
Product Differentiation
Creating superior products or services vs. alternatives is important for winning in the market place. What factors will set your product apart from the existing ones? If there is no such differentiating factor, your potential customers may just stick to the existing product rather than adopt yours.
Cash Flow Considerations
At the start-up stage, cash flow considerations are just as important as any other business function. If you run out of cash, despite holding inventory or other assets, your business will risk failure.
There are some types of businesses in which cash is typically held up for a long time. If you are in manufacturing for example, your cash flow can be held up for long periods of time, or money may be stuck in receivables. When picking the right business, you should consider one that provides fairly regular cash inflows and with slower outflows (if possible). It is imperative that you understand the need for constant cash flow in your business. Without cash flows, no matter how good your idea or business process is, you might be destined for failure.
Is it a Seasonal Business?
When picking a new business – consider whether it is seasonal or the year round.
If you do decide on a seasonal business, you will need to consider how to operate during off-season months. Managing the cash you make during the season will help you get through off-season. Financial planning will be of utmost importance.
Step-3 Understand how other Businesses have succeeded ? Know your Competitors – Know their Success Mantra
Gain understanding of the Key Factors which have made other businesses successful.
Step 4- Consider Franchise Opportunities
Starting a new business from scratch can have Risks. There is every chance that your business might not perform as well as you expected. If you are concerned about the potential risks of your business, you may want to consider a franchise opportunity in your area
Step- 5 Research – Don’t Be in a Haste
You are excited about your business idea and you are already envisioning all the possibilities. Now is the time to make sure that your Business Idea is indeed viable and you not getting carried away by the sheer excitement.
- Use the Power of Search Engines to conduct a thorough Research on your chosen Business.
- Get Business & Industry Data from sources of published information
- Understand the Needs of End Customers
- Learn all about Competition & its Offerings
- Dig Deeper to find Gaps in Competition’s Offerings and the Hassles faced by customers
- Analyse Strengths as well as Weaknesses of existing players; Analyse Opportunities as well as Threats to figure out whether a business opportunity exists.
- Make sure that the Business Opportunity is large enough to be attractive and the cost of doing business is reasonable enough for the business to be viable.
- Identify Various Customer Segments that exist
Step-6 Find your Niche
Finding your Niche is Important
- It is important to find a target segment which values the benefits you offer significantly more than alternatives
- If the segment is distinct and its size economically viable, you may have discovered a profitable niche
- Finding your Niche is also important because you can’t afford to be everything to everyone.
- A profitable product / service must stand out and find quick acceptance amongst happy & satisfied customers
Defining Your Niche
- What are you Selling?
- Who is your Target Customer?
- What benefits is your Target Customer Seeking?
- How is your Product or Service different from your Competitor’s Offerings?
- How is your Product / Service Superior Vs Competition for the Target Segment?
- Which benefits / differentiators make your product unique?
Step-7 Know your Cost , Expenses & your Suppliers
Conduct a thorough research on Google as the first step. Find appropriate technologies and suppliers for the shortlisted business idea. Get in touch with several suppliers and get as much details on technologies as well as costs. This will be needed for your Business Plan. Get in touch with current users of the technology to ascertain their views, if appropriate.
Step-8 Decide the Legal Structure of your Organization
Proprietorship, One Person Company, Limited Liability Partnership, Partnership, Private Limited Company, Public Limited Company . There are so many forms of organizations and they all have their Benefits & Short Coming. Understand the legal and Tax Implications of the Various Organization Structures and decide whats best for you.
Step-9 Create your Business Plan
Note down all the above points and make a written Plan. The written plan will keep you in track of your progress and also help your co-assists / co-advisors understand your Business and its requirements.
Step-10 Funding your Business
The Market has many Finance Models. Bank Loans ,Private Equity Funding, Venture Capital Funding, Angel Investors and many other forms. Choose what best suits you and what best is possible in your Business. Raising Funds depends majorly on your business idea and your convincing power to prove your business idea and guarantee success and returns to your investor.
Step-11 Incorporate your Business and Comply with your Regulatory Requirements
As discussed before depending on the Business Model picked up and most beneficial to your business take the steps of Incorporating Comapny, LLP, OPC etc. Remember this is just a start to your business and just your final decision to give entrepreneurship a try. Don’t ignore your compliance. Fines and Penalties only add to your Costs.
Remember No Blog, No Write Up can explain a Business. Every year thousands and lakhs of Start ups come up. While Few Reach heights of Success , loads even have a early unforeseen death. Choose your Business Wisely. Don’t always simply copy. Work on Quality and Be Committed. Your Business will surely give delicious fruits to you and your Family.
All the Very Best to those who Taken the Tough Decision of Start Up !!
Compiled: CA Vridhi Dalal
cavridhi@gmail.com