- On May 2, 2015
Having an idea, innovative mind set, ready to take risks…is it enough to start a business? Don’t think so. All above are some of the few parameters to run a business. Then what really required before starting a new business? Simple… have you hold perpendicular passion to do a business? Are psychologically fit to balance your mind and body? Are you strategically oriented? If ‘Yes’ is the answer, no one can stop your endeavour.
We can see a boom in start-up sector. Hundreds of young ideas moving to start-up villages and working hard to monetize their creativity, a good sign to our industry and economy. Start -up villages always welcome ideocrats to do business, they help for funding, managerial expertise, explore new opportunities etc. In reality how many start-ups in India running with comfortable turnover? Answer is Very few. Even after one or two years, very few companies are running with sufficient turn over. That is why we said before starting business start-ups should be strategically oriented. There are many common mistakes a start-up must avoid…
Lack of proper market research
Adequate research is an inevitable part of a start-up. Research should be based on three dimensional; from your side, customer point of view and market trends. Don’t demoralize when you find latches in your research. Take enough time to understand the market, situation and need. Once time comes across, then there is no dearth of ideas that you can pursue to scale up.
It may be either financial expectations or market analysis. It is a usual problem almost all young start-ups face today. To limit financial projections over flow, one must care about production possibility, Market range, and expected initial access. Market analysis is one of the most important segments of ‘indicators of launch’. Rather doing secondary data analysis, it is better to move on the grass roots to understand the need, level of acceptances and satisfaction frame.
Keeping the overhead costs low is essential for a start-up. Whether it is on furnishing the office or buying machinery, you have to be as frugal as you can be. Keep spending only those which is essential to run your business. It is advisable to take loan from your friends or family friends on the initial stage of your business. It will reduce the fear of immediate repayment.
Lack of effective human potential
Selecting your group is as much important like finance. One person cannot do all the work. For a business an idea itself doesn’t work out. It needs technical, managerial and skilled personnel. If your team is a proper mix, then you can move better, cheaper and faster. Also it will bring a balanced network which is required to scale up.
Improper financial management
Try to reduce the risk in your portfolio and stick to a conservative mix. Remember, you have already invested in your own business, so there is enough equity in the overall portfolio. Shift the focus of your investment portfolio from equity to debt. You can shift back to equity once the business pick up. Since we are playing defensive, it is good to have some cash reserve in your PPF account, as it is the only investment that will not be attached even if you go bankrupt.