Things to keep in mind while starting a SMB

Blog #3. Things to keep in mind while starting a SMB

Starting a small or a medium sized business in India has a lot of challenges which can be overcome if preempted. In our experience as a key player in this space, here are a few things we think any small-medium business owner should keep in mind before starting out.

1. ? ? Selecting and finalizing the Business Idea – On the face of it, a lot of ideas might seem feasible and profitable but it’s only when you dig deeper, you get the real picture of the profit and loss status. The idea needs to be unique, yet it should make business sense to enter. So be very thorough in the research while selecting the business idea and the unique selling proposition that you want to offer.?

2. ? ? Make a detailed Business plan – have a clarity and vision about the business in written format so that it can be referred to and shared with all the stakeholders when required. This should include all the top-level details of the business like sourcing, funding, timelines, finances, revenue projections, people, processes as well as specific details like cost price, selling price, ROI, taxes, location, registration details etc. Even include a future plan of execution.?

3. ? ? Profitability and long-term sustainability – having clarity about a few things will help in thinking about the longevity of the business like – who is the target group, is your product/service satisfying real needs of a large enough segment of customers in the market? Would you buy your own product/service in place of your customer?? Is the idea scalable? What are the limitations? Only when the business is sustainable, it is possible to get funding to begin with.?

4. ? ? Source of funding – One of the key pieces for the success or failure of the venture is the source and type of funding. Once there is a clarity on what the business needs in-terms of financial inputs and expenses, think hard about which funding source to pick. There are multitude of options available like Banks, co-operative credit societies, crowd-funding, venture capitalists etc.???

5. ? ? Business processes – be mindful about setting-up the business processes for functions like sales, payments, collections, accounting, legal and choose the right people to work with these processes. For example, be extra-careful to file for patents etc., incase of a proprietary product so that legal issues don’t arise later and you can be protected from all kinds of loss.?

6. ? ? Salvage plan – While you hope for the best while starting out, there are a lot of factors looming which can impact the final outcome, like for example the recent pandemic. So when there is a high risk involved, it helps to have a salvage plan in place. Think about how you would exit the business in case it does not pan out the way you intended it to. This will also keep you alert and let you know when it might be the time to salvage the business and not incur further losses.

?Keeping these points in mind as a business owner will make the journey less challenging since you would feel more prepared.