Published: Aug 17, 2022, 10:30am
A lot has changed over the past six to eight months in the business and economic landscape. And even though India continues to hold on to its status of being the third largest start-up ecosystem in the world, all indicators suggest that some of the market exuberance is fading as venture capital money flows are slowing down and company valuations are taking a dip amidst volatility. So what does all of this mean for those looking to start their own business in 2022? How can they get their business plans into motion despite the current economic uncertainty?
Below are a few crucial steps for those who are looking to take the entrepreneurial plunge soon.
The pandemic has led to a significant shift in consumer preferences, behaviours and habits, and these new patterns are here to stay. Hence, anyone starting a new business has to be cognizant of this and tailor-make their business idea accordingly. One of the biggest mistakes entrepreneurs make is to have solutions ready even before they have identified a problem. This mistake, while always costly, could be disastrous for a new entrepreneur in a post-pandemic market that is highly volatile and competitive. Hence, ask yourself the following questions as a first step:
Each and every sector and industry has a potential gap that can be solved via new ideas. For instance, today Paytm is a full-fledged payments and financial services company that has an array of offerings. However, when it started operations, one of the first customer pain points that it solved was that of pre-paid mobile top-ups that customers had to go to the store for and deal with long scratch card passwords, making it an overall cumbersome process.
Paytm offered a hassle-free alternative and solved this problem by leveraging technology. Thus, the company now has millions of users and its success can be attributed to the fact that it has almost always correctly identified market gaps and worked to solve customer pain points.
Market research is touted to be the longest, most gruelling, and yet, the most important step when it comes to founding a successful business. For those looking to start their own business in 2022, this step is even more important, because the pandemic has led to increased market fragmentation; this is why first-time entrepreneurs need to create an airtight and defensible target audience.
In order to identify market gaps, clearly demarcate a target audience, and really understand their problems, needs, and desires; you have to do your due diligence and talk to your potential customers.
Here is a quick hack that can help you to conduct your market research better:
As far as possible, make sure you are a part of your target market. This will ensure a deeper understanding of the problems, needs, and opportunities of the sector you wish to build your business in. For example, if you wish to build a fintech company and have been in the financial services business for a while, you will be quick to understand the gaps and be attuned to the needs of your customers.
On the other hand, if you do not have an understanding of the financial services industry, do not dabble in the money markets, or have never worked in the sector, you will be grappling with understanding even the basics. This principle is transferable to all kinds of businesses. Hence, before you set out to map your business idea, it is important to ask yourself some important questions:
Considered to be a redundant step by many, writing down a business plan actually has many advantages. For starters, it provides a quick yet deep insight into your business idea and overall vision. Also, it proves to be a handy document for potential investors and future stakeholders.
A well-drafted business plan is like a roadmap that lays out marketing, financial, and operational details, and mentions any other essential points that are crucial to your company’s success. A good business plan must always contain the following.
Lack of financing is one of the main reasons start-ups or new businesses either fail to take off the ground or are forced to wind up a business soon after starting. Hence, having a robust financial plan before you start your business is crucial to its success.
Most first-time entrepreneurs commonly go down the personal financing route where they tend to raise funds from either friends or family or put in their own savings, there is also the much coveted venture capitalist (VC) or angel investor route.
Additionally, you can also explore business loans and crowd funding options. Most novice business owners opt for one or more of these options, raising funds through a combination of several avenues. Whatever your funding plans may be, it is crucial to plan your finances and allocate sub-budgets for each purpose such as paying salaries or hiring an office space etc.
Pro Tip: When thinking about how your company will make money, it is important to see if you can create a revenue stream that is recurring in nature. This will ensure that your business remains profitable in the long run and that your cash flows aren’t strained.
A business model is essentially a strategy that maps out how you’re going to provide value to your customers through your idea and make money from the same. Your business model could be a SaaS or an e-commerce model or a consulting service, it all depends on what needs you are trying to fulfil in your chosen market.
However, there is one thing you need to know when starting your own business – business plans change and evolve depending on market conditions and changing needs. You don’t really know until your product or service is launched whether a customer’s needs have been truly met. Hence, no plan can ever be static and there has to be room for improvement, improvisation, and further innovation—always.
In a competitive economic climate such as that of 2022 that is driven by tech and significant market volatility, being myopic isn’t an option. Hence, as a business owner, you need to have a five-year vision and a strong plan for the future in mind. Also, remember to be agile in your thinking and not be afraid to acknowledge wrong decisions; accept your errors and then resort to course correction.
Remember, starting your own business is never an easy task; there will always be risks, trepidation and voices of those who don’t support you or believe in you. The important thing is to know that nothing is permanent—both success and failures will come and go, in fact, they are a rite of passage in the entrepreneurial journey. The important thing is to have your eye on the prize and keep working towards your goal.
Milan Ganatra is the founder and CEO of 1Silverbullet. He started his journey towards building technology-led solutions for the financial services sector in 1999 with Miles Software and is actively involved in investing in finance companies.
Aashika is the India Editor for Forbes Advisor. Her 15-year business and finance journalism stint has led her to report, write, edit and lead teams covering public investing, private investing and personal investing both in India and overseas. She has previously worked at CNBC-TV18, Thomson Reuters, The Economic Times and Entrepreneur.
Published: Aug 17, 2022, 10:30am