Fintech: The Ultimate Guide
Starting a Business: The Ultimate Guide
1. A creative idea…..
If you are here, then you probably have an innovative idea in mind- and that is exactly what you need! Every successful business starts with an outstanding business idea. Maybe you have a solution for a gap in the market. You might even simply think you can offer a service better than the competitors in the industry. Either way, the end goal would be to exit the rat race and start a business
1.1 Where Should I Begin When Starting a Business?
Starting a business is a goal many dreamers share. However, the idea of putting that dream into action can be quite frightening. Furthermore, quitting a job and becoming one’s own boss can seem like a lot of work. On the other hand, a bit of advice and a simple nudge in the right direction can make all your doubts go away.
The world of internet and business-friendly regulations facilitates start-ups better than ever before. Consequently, more and more dreamers are realizing that becoming an entrepreneur with a successful business is no longer far-fetched.
Quite often, the most challenging part of starting a business is figuring out where to begin. Some may unintentionally stumble upon a fantastic idea, while others have to brainstorm for one. When starting from scratch, always think, ‘what will take over the market next?’ Considering the start-ups, the most successful businesses have almost always stayed ahead of the curve. Therefore, once you find an industry that interests you, research and find a trend that could be the ‘next big thing.’ The next step would be to capitalize on a selected trend from your preferred industry.
1.2 Why Do I Need a Niche?
It is important to look for a niche. Take a look at the big players in your industry and what they offer their customers. What are they doing differently?
Once you figure out what other businesses in your industry offer, also look at what they don’t offer the market. Fantastic and innovative businesses don’t always introduce a new idea to the market. Instead, they fill a prevailing gap in the industry market.
You can brainstorm and write down the skills you developed at a workplace or on your own. These skills will help you decide which sector of an industry will benefit from you the most. For example, how can a person with web designing skills enter the medical industry? Or what can your handicraft skills bring to the entertainment industry? Thoughts like this can go a long way and help you come up with a unique solution for existing problems in industries.
1.3 Why is Market Research Important?
It is important to place your business idea in the greater business ecosystem. Hence, market research becomes essential to test the viability of your business idea in the market. In the simplest sense, market research involves collecting information about how your business idea applies to the industry market.
It is essential to make informed decisions when acting on your business idea. Hence, external feedback comes into play. Your market research should cover the following criteria:
Placement – Where would you set up your business? How would you distribute your products? Where will your products be distributed to? Proper market research can answer these questions for you. Moreover, compare the possible locations to establish your business and each site’s value.
Product – What are you planning to offer the market? Will your target customers like your product? Your product is your voice when starting a business. You might believe your idea is incredible. Despite that, you should research your potential customers and consider your product from their perspective.
Promotion – Who is your target audience? What type of social media would they use? You should research the customers you want and carry on with branding, marketing, and publicity, accordingly. Promoting your product requires thorough research. There can be similar or cheaper products in the market that can attract your targeted customers. Find the best way to show them your business and product offer more than your competition.
Price – Does your product have a demand in the market? How much will someone pay for it? How much do competitors charge for similar products? Research similar products available in the market and decide on a price point for your product or service. You can even ask potential customers how much they would pay for your product!
2. Do I Need a Business Plan to Start a Business
A business plan is the foundation of starting a business. This is a brief document regarding your business, from business strategies and objectives to the financial forecast. However, taking the time and effort to write this document may seem like an unnecessary exhaustion. Despite that, a business plan can bring immense benefits to a brand.
2.1 Writing a Business Plan
You can take a break from your busy schedule and settle down to put your proposed business to writing. By writing this document, you will polish your business idea, review it, and set benchmark goals for your business. Moreover, a business plan allows you to track your progress and measure the success of your business.
Your business plan can include
● Summary & pitch
● A note about yourself
● Products and services
● Targeted customers and market
● Strategy for the market
● Strategy for marketing and publicity
● Logistics and business operations
● Product pricing and related strategies
● Financial forecast
● Backup plan
Writing a business plan is a perfect strategy to detect oversights and flaws in the different stages of your business. Additionally, starting a business requires funds. These documents can go a long way when securing a business loan from a financial service or investor. A detailed and promising document will show your lenders you won’t waste their money and time.
3. Financial Forecast for a Start-Up
The financial forecast of your business will grab the attention of any potential lender. Hence, it is important to include how much cash your business will generate. To ensure you get funds, you will have to rationalize and explain the income you expect from your business. The financial forecast section of your business plan will let you showcase a convincing return on investment (ROI). You can do this by building a cash flow forecast.
The cash flow forecast in your document should include the amount of cash you expect your business to generate and payout over a certain period. The extent you want to forecast is up to you. However, specific financial organizations and lenders have strict requirements. So make sure to match your forecast with what they expect.
3.1 Cash Flow in Start-Ups
Your cash flow often decides how far your business plan will go. Understanding what cash flow includes and how you can generate more cash for your business is important.
Consider the following to understand the requirements to generate cash flow:
Your income – The income is all the cash your business generates. This cash can come from investments, equity, and sales. By adding all the cash earned from different sources, you will get your company’s total income.
Your expenditure – The expenditure includes all the cash you will spend to run the business. The costs can consist of labor fees, manufacturing costs, rentals, and many other tasks that require cash. By adding all the expenditures you think your business will incur, you can calculate the expenditure of your business.
Net cash flow – The net cash flow can be calculated by subtracting the expenses from your business’s income. If the value you get is negative, you are facing a loss during the expected period. Similarly, if you get a positive value, you can expect a profit over the selected period of time.
Cash flow is critical for Micro, Small, and Medium Enterprises (MSMEs), when starting a business. Since this is the money that comes in and out of your business, it decides your company’s progress. A positive cash flow means your business earns more money than it spends. Hence, your working capital depends heavily on your cash flow.
Fintech financial platforms can extend invaluable support to MSMEs. We provide fast working capital to businesses with securities papers from reputable principles. With your business in place, our service can accelerate your cash flow through a quick and efficient process. Consider joining our fintech ecosystem to enjoy a healthy business, along with guidance from experts!