10 Tips On How To Start A Business

Have you ever wondered how to start a business but don’t know where to begin?

This blog covers all the information & checklists that you should keep in mind before you start putting in all the hard work!  

Meet Alisha.

Cakes, pastries and all things bakery has been her world for a long time. 

It all started with taste-test sessions with her friends, family and relatives.

And today, she wants to open her new bakery shop. 

Documentation, registrations, cost estimation, capital requirement, choosing the right business type, market research, license requirements, and opening a business has never been a cakewalk. 

It requires, time, patience and research. But how to start a business – Alisha keeps thinking about it.

But first, let’s understand:

What is a Small Business?

A small business involves less capital investment, less requirement of resources, and less labour force.

These are the characteristics that define a small business:

• Ownership: They usually have a single owner
• Management: Usually managed by the owner.
• Limited Reach: They have a limited area of operation. 
• Flexibility: Because they are small, they are open and flexible to sudden changes, unlike large industries.
• Resources: They utilize local and immediately available resources. They do better utilization of natural resources and limited wastage.

How to start a business?

Let’s read on to find out how to start a business in 10 simple steps.  

1. Develop your business idea

While you think about how to start a business, it is crucial to pen down your thoughts, and ideas. If you already have an idea of what you want to sell or the industry that you are about to step into, it is crucial that you do research on 

• The market- that includes market-price fit, consumer surveys, research &  focus groups, industry size & growth opportunities.  
• Competitor – The purpose of a competitor analysis is to explore and get an insight into your competitor’s strengths and weaknesses and to find gaps in the market. It will help you recognise how you can enhance your own business strategy.

But who is your target customer? 

It is essential to have a clear picture of your target customers-their needs, behaviour and preferences to understand the potential of your business.

Do you want to make people’s lives easier? Or do you want to enrich people’s lives with your art?

2. Feasibility study

A feasibility study is a detailed analysis of all the aspects of a proposed business idea or a project to understand the likelihood of its success.

This is to determine the viability of the idea before going ahead with business development. This study is of four types:

• Technical feasibility
• Market feasibility
• Financial feasibility
• Organisation feasibility

3. Formulate a business plan

You have an idea. You have done your market research. You now have an understanding of your target customer as well.

A business plan establishes your roadmap for the future. It should clearly indicate your future business milestones, how will you reach those milestones & a viable revenue model. Creating a detailed business plan highlighting problem statements &  possible solutions, cost projections, revenue streams, operational plans, etc form the pillars of your business plan.

4. Finance check

Finally, take a long hard look at your finances and ask yourself, if you:

• Have the funds required to start a business? 
• If not, how do you plan to raise that capital & on what terms? 

The key is to remember that it can be a while before a new business starts generating sustainable revenue.

So before you start a business it is important to perform a Break-even Analysis.

The break-even analysis helps the company to decide the least number of sales required to make profits. With the margin of safety reports, the management can execute a high business decision. Monitors and controls cost: Companies’ profit margins can be affected by fixed and variable costs.

• Fixed Costs ÷ (Average Price – Variable Costs) = Break-Even Point

“A big business starts small.”

-Richard Branson

This formula shows the minimum performance achievement required by your business to avoid losing money. This helps determine profitability which is every founder’s topic of interest.

5. Identify your business type

“Do you want to open a physical shop? Or do you want to start with a cloud kitchen?”

The rise of online businesses has been significant in the last few years. With the ease of use and a better customer experience, online businesses have been trending.

Based on your business plan and financial projections, you can decide on the business model that would suit your situation and idea.

After all, Praful Billore had also begun with a tea stall and now he runs a 10-crore empire of MBAChaiwala.

6. Choose a business structure

Sole proprietorship, partnership, OPC( One Person Company), Trust, NGO, and public/private limited companies are some of the common business structures in India. It is important to be aware of the benefits and advantages of each business type when you start as a founder.

 Choosing the right business structure that gives you the right balance of legal protections and benefits is crucial for your business’ success

This step is very crucial as it not only defines the outline of your business but also saves you from tax consequences, and unintended dissolution while you try to convert to a different business structure in future.

7. Register your business

Once you are aware of your business structure, the next step is to register your business.

Registering your company has a number of advantages such as:

• Enabling the transferability of shares which is feasible in a registered business
• Opening a bank account in the company’s name is easier in the case of a registered business. 
• Banks and financial companies lend loans to registered business entities as they are structured and also carry more credibility
• In the case of B2B (Business-to-Business) transactions, most businesses prefer to shake hands with registered business entities.

8. Building a rockstar team 

Building a team is essential for any new business. A strong team of individuals with diverse skills and talents will be essential for any business to succeed. A team can help a business to create, implement and execute a successful strategy, develop innovative ideas, provide support and guidance, and ensure that the business is on track with its goals. The right team can also help a business to manage risks, build relationships with customers and partners, and increase productivity.

9. Trust yourself

You are on the right track and starting something new takes immense creativity, research and patience. You’re the owner of your venture and every small step can have rewarding impacts.

 The most successful entrepreneurs I know are optimistic. It’s part of the job description.

― Caterina Fake, founder of Flickr

10. Choose smart business banking

Traditional business banking services can hinder your momentum. Choose the right business banking partner to take the stress of managing money movement so you can focus on scaling your small business. 

The startup ecosystem is expanding and new businesses are budding everywhere. Hence the dependency on a stable and smart banking platform has been ever-increasing.

RazorpayX, offer a smarter and more intuitive dashboard that enables you to perform seamless vendor payments, smart tax payments, automated payroll compliance, easy accounting software integrations and so much more in just a few clicks.

RazorpayX is a full-stack banking suite that enables

• Banking which Provides end-to-end automation with powerful features like Automated Accounting, OTP management, Maker-Checker Flows,

• Corporate Cards with 20X higher limits
• Automated Vendor Payments
• Forex Services
• Payroll – India’s ONLY payroll with Full compliance automation, Employee Insurance management and TDS filing)

With platforms like RazorpayX, you can supercharge your finances.

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