The business sector might seem intimidating for newcomers, but proper guidance with good market strategy and strong decision-making skills, the latter two, which usually comes with some experience and can be had from a good mentor, can make the entrepreneurial journey a bit easy for any newcomer
It is also important for any newcomer to establish a strong business presence from the beginning, but to do that one needs to have an understanding of the market, its inner workings, guidelines, demands, scope for profit and how to achieve that strong presence among the competition.
For guidance and mentorship, they can also reach out to advisors and mentors, who can guide them on their entrepreneurial journey with their valuable lessons. Advisors can provide enriching knowledge to help the newcomer with ideas, strategies and even funding issues. Financial advisors, economists, accountants, consultants, analysts provide valuable advice to help any entrepreneur gain a strong insight into the macro-economic scenarios and develop both long- and short-term strategies to help navigate smoothly through several challenges their business is likely to face.
Managing a business also requires one to be a financially equipped, organised and adept at making and accepting changes. A businessman needs to assess certain things for his/her venture, including a budget, the pricing strategy, the scale of production or trade one can handle, and the competition.
Here are some of the major aspects an entrepreneur must think of before getting into business.
Business Skills
An entrepreneur has to have strong decision-making skills and a way to inspire people to lead them towards success. Business development, leadership skills and networking skills help business people in making difficult decisions required for the day-to-day operations.
Gaurav Goal, Founder of Lamoksh Investment and a Securities and Exchange Board of India-registered Investment advisor (Sebi-RIA) stresses on the importance of personal development skills, networking and leadership one requires to succeed in business.
Though these come naturally to most entrepreneurs, they can also be harnessed through experiences and training. Entrepreneurs may join industry networking groups to interact on a regular basis with their industry counterparts. They could also leverage social media to further enhance their network reach and forge new business connections for growth.
Learning and upskilling are two important aspects that business people should always indulge in to stay abreast of the latest development to ensure they remain aware of the changes and effectively tackle any emerging challenges.
Form A Business Idea
Business requires thinking both about your finances and also the ‘what’ and ‘how’ of your venture. A business idea may include many different things, such as financial strategy, product, marketing and so on. While financial strategy requires considerable amount of calculations, it is also important to be creative and aspiring to achieve your business goals.
Goal suggests young entrepreneurs to have a rough estimate of the funds required for the starting three years of their business – whether they will fund it themselves, take loans from banks, through investors or through government grants.
Second, Goel advices entrepreneurs to check out their competitions, including their pricing and positioning of the product or service in the market. This will also help them determine the fund they need for developing and marketing and selling the product.
Third, Goel stresses on being aware of the government’s guidelines on the desired sector. “A person needs to know what the government considers a violation and what is well within the policy to be moulded for your own gain,” he says.
Lastly, he recommends entrepreneurs to find a unique selling point for their business model, something about the business that is unique and distinguishable from competitions and/or sets the entrepreneur apart from other similar businesses in the sector. For instance, if there are various types of beverages in the markets, the production of soft drinks, energy drinks, juices and flavoured drinks, may not have the desired effect in terms of reach and acceptance and success because of the ample supply of products already existing in the beverage market. In such a scenario, the unique selling point may come from marketing, such as it might be a healthy for your body like Alo products or very energetic, like the one used by Red Bull in its marketing and advertisement campaigns.
“Unique things intrigue people and invites or attracts the consumers to try the product,” adds Goel.
Importance Of A Plan
Having a business plan is the key to laying down a sound foundation of your business. A business plan covers all aspects of the business and will help you in determining the strengths and weaknesses of the business.
A thorough understanding of the whole business environment is required to identify the opportunities and threats and will help in analysing your competitions.
Goel, defines a good plan as one that assesses the resource requirements, including cost of capital, debt arrangement, equity, or promoters’ equity arrangement, along with the estimation of revenue and profitability for next few years and risk analysis of the business. These things will help you in long-term survival and prepare you for the things that pose a risk to your venture and enhance profitability with constant analysis of market opportunities.
Analysis Of Business Potential
Entrepreneurs must have the mindset to learn from their mistakes. A business will have go through its ups and downs and an entrepreneur has to constantly evolve his business plan and roadmap in sync with the changing demands of the market and the challenges thrown by constantly changing market dynamics as result of economic conditions and competition.
A major mistake can lead to big losses, even leading to permanent closure of their business venture. Says Goel: “Most young entrepreneurs jump into business without properly analysing the potential, competition, risks, capital requirement and sources of funds. This leads to a reality check once business operations start. Thus, it is critical to draw a sound business plan and study all potential points before embarking on business journey.”
Determining Viability And Marketability
According to Goel, a small sample check before diving fully fledged into the new venture will give you the idea of the potential your business holds. It is also suggested to discuss your idea and the result of the sample check with the promoters and key persons in the industry to understand the correct viability of your venture and whether it is appropriate for market and what approach to use for marketing.
Funding Options
Fund raising can be done in various ways, ranging from equity and debt options to shareholders’ own equity, where each has its costs associated to it. Goel suggests that a business owner may choose a mix of the capital allocation depending upon the availability and the cost of the capital. A mixed allocation may allow you to remain in both the public and private sector as a business. It will also allow you to explore production efficiency and resource allocation in both the sectors while participating in social welfare.
