The entrepreneur has to move forward with prudence and has to take the calculated risk to grow his start up venture. A mistake can prove very costly and may put the existence of his venture at stake. And if you are working fine on the basic fundamentals to run the venture, then the probability is high that you will succeed in making your venture a success.
Let us look at these business tips which every entrepreneur must follow:
(1) Sales is the heart of the company
Your company is nothing without sales, although you are having all the resources of man power and money, but when there are no sales then it means that you are not doing any business and your company will die eventually. The product or service that you are offering must solve the problem of the customer. You have to make every possible effort to sell your product or services by extensively meeting clients, emphasizing on the features of your product, informing them about the price of your product, offering early bird discount and convincing them about the benefits of the product.
(2) Do not give the credit because cash is the King
New businesses generally fear that they will lose existing and potential customer, if they don’t give their product on credit. But think, if they don’t pay you, you will be in serious cash crunch. If you are making sales only on papers and the money is coming in installments or after some time, it means that you are running your business on credit basis. Remember, that you are running a start up venture, a delay in cash receivables can disturb your cash cycle and it will affect your working capital management. As your money is stuck up, you will find it difficult to run your day to day operations of your venture. You can set the credit limit after few years of operations, which should be based on the credibility of the customer. Remember, it will be very difficult for the company to survive, if it’s making profit only on papers and lacking cash.
(3) You are not the brand, so keep the pricing of your product or services low as compared to the other established competitors
As you have just started the business, you want people to notice your company and its products. Here, the price of the product plays a crucial role in making business a success. If the pricing of your products or services are at par with your established competitors, then it is less likelihood that you will make a good sale. If given a preference over the similar products of same price, a customer will always choose or buy a product or a service which is already established and has a brand value. You can make your product or service visible by offering low price as compared to your established competitors. The low pricing of the product can drive the sales.
(4) The excellent service leads to the relationship building which generates references
It is true that big and established companies generally provide good products and services but their solutions are standard that is these are not customized. You can get ahead by offering customized quality solutions or products to the customers with excellent service. For example, in solar PV installation business, big companies cater those customers which require at least 1 KW solar PV systems. Moreover, these companies provide solar panels and other components of their own brand that is the customer cannot opt for solar panel of different brand. If you are a start up in this sector, then you can tap customers which require less wattage of solar system and can offer them to have solar panel and other components like battery, inverter etc of their choice. A customer always prefers a company which provides a quality product and good service, and a lacking in any of two will degrade the company’s value in customer’s eye. An excellent service offered has more likelihood that the client shall avail your services again and recommend it to others.
(5) Keep your inventory and other overheads low during initial years of operations
Think twice before investing in offices, manpower and inventory in one go. The small investments in phases better creates a room for the start up venture to grow, while on the other hand the heavy investment made initially, blocks money and creates pressure to cover up the cost.
Initially, you can plan your meeting with your clients in a cafeteria instead of office. This can save your money and you can further utilize this money in client meetings, marketing and other traveling expenses. The low level of inventory during initial phase of your business actually helps, because a high inventory could block your money, which could otherwise be utilized in the day to day operations of the venture. Try to gauge the demand of your product during first year of your venture and then increase the inventory level accordingly. When the venture starts making profit, then re-invest part of this profit in renting an office space, increasing the inventory level and hiring a man-power.ConclusionThe proper circulation and flow of money through sales is very important for the growth of your start up venture.
The proper circulation and flow of money through sales is very important for the growth of your start up venture.