Practical Advice for Startups
Have you ever wanted to start or grow your own business but you don’t have access to business financing? Who didn’t hear of strict lending regulations for small businesses and the uptight criteria of banks and traditional lenders for startups? But despite these financial limitations, you should never back down from pursuing your dreams of starting and expanding your business.
Here are tips to get you going:
Decide that business is for you.
It all starts with a decision to convert a business idea into a multi-million business. There are may be ‘concerned’ friends or consultants who may discourage you from setting up your own business saying that it wasn’t for you, but if you know where you are heading you will not stop. Even those who don’t have the time or the skills to carry out a particular business can start their own company.
It is just a matter of resourcefulness. If you lacked an ‘idea ‘or the funds to kick things off the ground, look around you for options. Business is about taking the necessary risks and chances –even if you feel bad some of the times or you’re losing sight of where you are going along the way. Challenges are normal—the key is being fully determined to make it.
For example, if you don’t have the time—use your money to hire the people who have time. You can use apps, tools and other tools that are available in this modern society. If you don’t have the funds, get the right financing—look for lenders that would qualify entrepreneurs like you. Never mind what banks say, as long as you can qualify for a business loan in a specialized lending company, you still have the tools to get going.
Stick with products or service that sell
There’s nothing wrong in inventing a new concept or starting a business that no one has ever heard about. In fact, if it solves a problem of a particular market, you got yourself a bunch of customers. But, if you don’t have a clear business strategy to start a business from scratch, especially in a new market—why don’t you start first with the niche that actually sells?
Yes, you can change the world, but if you don’t have the determination to do whatever it takes to be the next Mark Zuckerberg, you can settle for what others call, a ‘boring’ industry. Look around you and see how many people are lining up fast food chains, grocery stores, repair shops and even laundry shops. These businesses may not be as innovative as what other people think, but they do make a lot of money. People have basic needs—and if you have the means of supplying them, you can achieve financial independence and the satisfaction of running a business that makes a lot of money.
Or, you can be in the real estate industry, and you want to take advantage of the latest demands in the housing market. Flip properties, start your brokerage service or make your internal décor business a reality. Whatever business you have in mind, as long as it is a concept that has been tried and tested, and it came out profitable—go for it.
Do the math
Who loves math? If you’re one of those people who hate numbers, you have two options—hire a book keeper or deal with it.
You’re most likely to encounter the following terms when calculating your profits and losses:
- Debt to Equity Ratio. How much is your total financial leverage. If you owe $100 and your equity is $20, your debt to equity ratio is 5 per $1 equity.
- Gross Profit Margin Ratio: It refers to the gross profit minus the Cost of Goods Sold. If you spent $1000 for a product sold at $500, you have a gross profit margin of 50%.
- Working Capital Ratio—it means you need to have enough assets to pay your financial obligations. Otherwise, you will need additional access to financing so you can pay for your daily expenses.
- Net Profit Margin Ratio. How much do you actually earn for every sale? If you earned a net income of $300 on the $500 revenue, it means your net profit margin, or the actual money you earned minus all the expenses is only $200.
The best part of doing business in this internet savvy world is that you can save a lot of money on marketing, collaboration and you can start it without putting in a lot of upfront investments.
You can find clients online, create customers’ demographics through online research, and conduct surveys for your feasibility study by jumping from one social media platform to another. You can use SEO marketing, pay social media platforms to advertise your brand and you can do all of them without investing a large amount of money.
And here’s the most practical advice for startups, you can test the waters first before making a huge investment in terms of time and money. The internet allows you to start your business and market it online, without leaving your chair. You can also use the social media tools to reach out to your target market without having to pay a huge amount of money on traditional media—like television or radio.