Starting a small business is exciting but requires a lot of diligence and efforts on the entrepreneur. Normally, a great idea for a product or service is enough to give you the head start you need.
But there are other factors that need to be looked at as the success of any small business relies not solely on your bright idea.
And like in any endeavor with a goal in mind, in this case, to earn profit, it makes sense to have the best strategy possible.
Tej Kohli, a global entrepreneur and a philanthropist, who supports and nurtures entrepreneurs and thus has a lot to say about:
It’s through innovation and democratisation where real philanthropy starts by pushing the boundaries of technology. Through sheer determination, ability and having the will to do it, we can now drive real change to real people and make a real difference in the lives of the masses.
1. Do Your Research
Remember those science experiments you did at primary school? The result lies primarily on whether you did a good research and planned well. Apply these fundamental and practical elements at the beginning, making sure you have been thorough and the probability of success of your business is increased.
Ask and look around, do online search about similar products and services, find information and links, think of any possible questions and find the answers, seek trends that may affect your product and service and look at how the industry is and will be performing. With sufficient information, you will be able to develop your business and financial plans better. So work it. Experts agree that thorough research in the early stages of a business have distinguished success stories from failed ones.
2. Business Plan
Not only would you need a well-written and thought of business plan to get the funds you need but it will serve as your guide to keep you and your business on track. Write a thorough and comprehensive plan with plenty of details including where you want to be and the goals and milestone you wish to achieve and how you plan to do just that. Use a timeline to be precise. Such business plans are what bankers and lenders applaud and they will assist you get the resource you need. It is best to include any possible pitfalls that you can think of and plan on how to deal with them in case they crop up. There is nothing else much better than having contingency plans in place when the worst case scenario happens.
If you do not feel confident about making the plan just by yourself, seek help and find someone you can discuss your decisions with to give you a different perspective. Chatting about it to another person will let you know if you have missed something important or if there is a better option you failed to consider. Research and planning go hand in hand and is critical in any business venture so do not skip these important steps.
Business plan formats vary but basically include a look at the industry the business will be part of, how the business will take shape to compete and what structure and strategies will you undertake to expand the business. So obviously, this is where your research will kick in as you also need to touch on government regulations and any other factors that will play in your venture.
3. Financial Plan
Aside from your business plan which exhibits your mission and vision, a financial strategy must also be worked out in advance. Businesses do not run without capital and there is no doubt a good cash flow is essential. So put together charts and pies indicating your outlook or projection of your business’ budget, profit and loss. Join a workshop to teach you basic accounting principles and financial management including bookkeeping and doing income statements. Learning these matters is important for you to fully understand not only if you are making the targeted profits but is especially helpful in determining which values to watch out for to indicate that trouble is imminent.
Writing down the values will show you how to use your funds effectively and what strategy is best to boost profit and reduce loss. Consider every possible scenarios and how it will affect your cash flow and think of ways on how you will address them should they occur so as not to jeopardize the entire business. This detailed plan will also let your prospective lender know how conscious you are of making sure the bottom line is protected which is what matters to lenders really – a profitable business that is able to stand the test of time.
Posted in Social Startups.
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