Here are the top things to consider when starting a small business with little capital
Lack of funds is usually the biggest concern among aspiring entrepreneurs. Securing the much-needed capital can be daunting, but this should not discourage you from pursuing and eventually building your own businesses.
Establishing small enterprises with little capital is feasible. There are numerous examples of companies worldwide that started out with very minimal funding but went on to become one of the most inspiring success stories in the world of business. With a clear vision, confidence, high level of perseverance, dedication and acumen, a budding entrepreneur is all set to make the first step towards turning that long-nurtured dream into a reality.
Among the first things to consider are your business model, overheads, inventory and labour expenditures. Keeping your expenses at a manageable level is vital at the very start, especially as you are to encounter challenges that may impact your cash flow such as delayed payments from your clients.
Moreover, assessing the actual expenses beforehand will provide you with an accurate idea of how much capital you need to open your company and sustain its operations in the long run.
Know the market landscape and your competitors through in-depth research to enable you to strategize better. This allows you to offer a unique proposition to the market, thus giving you that much-needed competitive advantages.
As a small business owner, you need to have a basic accounting knowledge even if you do not have an accounting degree. Yes, you can always hire an accountant but learning the basics is vital as well. This way, you are updated about and can effectively track your cash flow – that is your revenues and costs – and properly identify which areas of your business are bringing in profits or taking up an unnecessary huge chunk of your budget. Knowing the financial health of your business is also critical to prepare you for unforeseen expenditures along the way.
Finally, investing in the right tech solutions is important in this day and age. Technology in the modern era is crucial to the success of a business regardless of size and is considered as growth enabler. You may think that investing in technology could cost you big money. However, there are many cost-efficient technological tools available in the market today.
You will need these tools to help you simplify your business processes and procedures, enhance your products and services, deliver outstanding customer experience, increase your compliance level, revolutionize employee interaction, optimize data management, and secure your networks, among others. These are all necessary ingredients for your success.
The benefits of automated solutions are more long-term. For example, using a business management software eases out the process of account maintenance and other common business activities such as billing, value-added tax filing, and inventory management, among others.
Ultimately, it is about employing the right business practices, being disciplined, staying in control, and having the foresight as you work towards expanding your company. It is not easy starting a business venture, which is further compounded by lack of funds, but it is going to be worth your while nonetheless, especially as it begins to develop and as you see your entrepreneurial dream slowly and steadily growing.
(Written by Vikas Panchal, Business Head at Tally Solutions in the Middle East, a leading international accounting and compliance software provider.)