Starting a business, whether a small business or large, is a challenging task. You need to have the right knowledge, idea, experience, and a lot of motivation to start your own business. Many factors might come your way and prevent you from starting your business. Example: You want to open a restaurant, and although you may be knowledgeable regarding offline sales, you lack the necessary tech skills to operate zomato or Swiggy. Other instances include not having enough money to refurbish your furniture showroom, having difficulty finding a good-trustworthy manager for your new branch, etc.
The economy and the cost of establishing your own business might be some of the biggest challenges you will face while starting a small business in India. There are many things that you need to take into consideration before you take the leap and invest in your own business. Let’s see what the challenges of starting a small business in India are and how you can address them in the article.
What is a Small business?
Do you know what a small business is? A small business typically offers services or general merchandise operations like grocery stores, pharmacies, tradesmen, bakeries, and micro-manufacturing facilities. Small businesses are owned and run businesses with lower capital, labour, and resource requirements than big businesses. These enterprises are perfectly suited to run on a small scale to benefit the neighbourhood and bring in income for the business owners. Do you or your parents or relatives have a factory?
It may be large for you but not for the government; it may be a small business. The choice of the company to invest in infrastructure and equipment is the premise on which the Indian government classifies small companies. A small business is defined as a firm that is set up in which the financial investment towards infrastructures such as a building and equipment, whether made as a proprietor or on a lease or purchase basis, does not exceed 1 crore rupees.
Challenges faced by a Small business in India?
Commerce student? A famous line of Business Studies: A business operates in a society and needs to fulfil the needs of the customer. Or even went shopping and heard? The customer is the king. So, it means that you may have set up a business to earn a livelihood and profit, but it is only possible if your customers’ needs are fulfilled. The idea doesn’t need to be unique, but it must have the potential to capture your targeted audience. A bad idea will only lead to losses. A way to solve this problem of a small business is to research well. Some successful small business ideas are Food restaurants since Indians are foodies, Real estate, wedding planners or event planners, Tuition Centres, Automobile repairs, Consulting, Gyms, Providing outsourcing services, Tiffin Services, etc.
To discover the best candidate, a small business owner should work like an HR professional. For instance, if you intend to coach students for the JEE entrance exam, you need to have a reputable lecturer or at least one who is skilled at teaching, informed, kind to students, etc. A company is only as efficient as its people working within, but one of the major challenges a small business confronts is finding and keeping talented employees.
Managers need to understand that pay isn’t the only thing influencing employee churn; they may find solutions. By attending to their needs and demonstrating a growth path, you may make your staff feel appreciated and keep their loyalty. One needs to hire candidates based on skills, not degrees.
You need capital to buy equipment, hire staff, rent or buy a place to work, etc. But the problem here is where to access finance, you may have funds, and banks may offer you loans, grants, etc. You need to evaluate the best choice out of them. Remember, the same type of method is not going to work forever, so review and revise. Starting a small business is difficult; you need the patience to ensure debt repayment or cash flow throughout and cut unnecessary costs by analyzing the budget.
Do you want profits? A way to increase them is either to increase your revenue or decrease your cost. But to increase revenue, you need customers. Therefore you need to promote your products or services. Some ways of promoting a small business are: google ads, Facebook ads, Instagram ads, SEO, viral marketing, banners and posters, pamphlets distribution, and word of mouth. You need to put constant effort into working on it. You need to create a marketing budget to be careful not to overspend. Make it simple for customers to obtain your goods and services easily.
Proper Bookkeeping and Making a Budget
You need to keep account of your transactions. Or remember you will be at risk for non-compliance with regulations. Making a budget: list all your revenues and expenses. This will help you to achieve your goal of earning profits as well as proper business administration. For this, you need to have organized bookkeeping. You may outsource the service if you are unable to manage it. It is easy; you just need to start to do it. Analyze your current needs, Prioritise them and choose the less important ones for the future. Financial Planning helps you to generate money in advance for future contingencies. Starting a small business can be easy with financial Planning. Keep a constant eye on economies and diseconomies of scale.
Don’t worry if some people criticize you. People learn from their mistakes. If you get negative comments from your customers, contact them, and work on the problem rather than claiming that they are wrong. You need to put yourself in the shoes of customers. Even when you order from Amazon, etc., you may get a defective product, right? So, gear up and work.
Starting a small business in India can be daunting. There are several challenges to consider, including the need for capital, labour, government regulation, organized business administration by keeping a budget and bookkeeping and getting more customers. You don’t need to worry about criticism; it may help to save your business or scale it. You need to follow the series – Need(idea), Awareness, Easy Accessibility, and Customer Experience to increase your profits. Evaluate the best method of raising finance and preparing a budget to cut costs. When you experience diseconomies of scale, you need to work on them. Go for it. All the best!