Kuldip Maity

“Small business” —does the name indicate all that a small business truly is? The common perception that is attached to small businesses is that they are miniature versions of regular and large-sized enterprises. In an extension of the same assumption, by default, it is also believed that small businesses are limited in their workforce, capital, and ultimately, profits. However, in this day and age, such a restrictive assumption is far from reality.

A small business can fulfill big goals when the right business strategy is applied. In my previous blog, I spoke about the importance of choosing the right business idea and subsequently, converting it into a business reality. Once a small business owner has the right idea that has the potential to hit their goals, they are already on the right track.

At this stage, it is important to acknowledge that business goals are not unidirectional. While profits might appear to be the most popular goal of entrepreneurship, several businesses are built for other purposes. These goals can vary from social causes, community building, and sustainability, to even building a legacy.

However, be it large profits or other large ambitions, certain aspects are overlapping for a small business to achieve these goals. One of the major commonalities among several small businesses is that they try to create a niche in an overcrowded market space, with several competitors, including the bigger players. This problem can be countered in two major ways. On the one hand, small business owners can choose to start the initiative in a way that is unique and unexplored. Essentially, they could adopt the blue ocean strategy. However, due to the highly idealistic as well as risky approach that this path would have, a majority of first-time small business owners are driven to more tested waters. Instead of viewing this as a loss or a disadvantage, the successful entrepreneur will change their lens to view the opportunity for small businesses despite the competition.

To put it in one word, differentiate.

Ambitious entrepreneurs should convert their disadvantages into opportunities by changing their perspectives. For instance, if a business at a micro or small level caters to a certain geographic location, it should focus on building a strong and loyal consumer base. Similarly, when it comes to sourcing, they should adopt cheaper and more efficient local options that will help them optimize their costs. Even when it comes to building a dependable workforce, hiring local people and upskilling can prove to be more feasible and rewarding than recruiting from the market.

Another major determining factor for the success of small businesses is financial planning. In the absence of an unlimited fund source, entrepreneurs need to dedicate considerable planning efforts to forecasting the fund requirements as well as maintaining reserves for unpredictable scenarios. Flexible borrowing options and schemes should be researched and tapped with the same spirit that an entrepreneur would research their consumer demand.

In the end, the role of a small business owner is not for the faint-hearted, but small steps with balance and foresight can prove to be transformative and ultimately result in big, profitable leaps.

Time and again, I have highlighted the rising graph of entrepreneurship in India. The success of businesses at the grassroots has inspired ambitious persons across generations to become entrepreneurs. The glamour of business success can be enticing and often ends up being the primary motivation for many.

As it is often said, the starting point of a successful business is almost always a good idea. While I agree with the statement, I would like to emphasize the fine print that comes along with it—one that is easily overlooked.

Not all great ideas grow into successful business realities.

Albeit spontaneity and risk-taking are a part of entrepreneurship, impulsiveness can end up in loss and failure. While every entrepreneurial adventure comes with its elements of surprise, certain essential elements need to be set straight before one develops an idea into a business venture.

At a time when the opportunities are virtually endless and the market is ready to experiment, it is easy to be brimming with seemingly “revolutionary ideas”. In fact, at the risk of sounding blunt, almost every single person, if asked, will have their version of a “mind-blowing idea” for a successful business. Amidst such an overflow of ideas, would-be entrepreneurs need to give themselves a reality check. They need to take a step back for the calculative assessment of the practicability of their idea. To achieve this, they need absolute clarity about their business. Whether to engage in providing goods or services or both and to which degree is crucial to determine. Once decided, the same needs to be applied through possibilities. The checklist should assess whether their idea brings real value to the market and whether there is a demand for it. The identification of a relevant market includes the determination of the target audience for a business’s products and services. The tastes and preferences of this target audience need to be accounted for. It is also important to study competitors who are engaged in similar activities.

There are multiple layers to this test since there are times when novel products or services that solve gaps in the market are entirely new to the consumers. However, that is when market research comes into play.

Once the market research game is strengthened for an entrepreneur, half the battle is won. In the next part lies building capacity and scalability.

If a strong business plan is the heart of a business, then finance is the blood that keeps it beating. The initial investment, working capital, and the entire short-term, as well as long-term financial plans of a business, have to be forecast. The sourcing for this finance needs to be decided based on a range of factors. In a previous blog, I had drawn a parallel regarding when to dip into one’s savings for a business venture and when to borrow money.

Once the foundation is laid, other intricacies including branding and brand positioning, team building, marketing strategy, sales plan, and legal compliances have to be handled. Only when these requirements are handled does a business become ready for deployment.

Entrepreneurship is not for the faint-hearted. Therefore, even after these considerations, there is a risk factor. However, preparedness makes all the difference and determines whether one dives into the sea with or without a life jacket.

There is a lot of discussion about employment opportunities for today’s youth. While it is important to plan around job creation, both in the public and the private sectors, the advent of automation, artificial intelligence, the Internet of Things, and so on is bound to take away thousands of jobs in the lower strata of the pyramid.

Traditionally, independent India has developed a culture of its youth lining up for jobs in the government or the private sector. Creating jobs for themselves (and others) may not be the thought that crosses minds organically.

However, there is no denying the fact that in the present state of India, entrepreneurship will play a crucial role in socio-economic development and the generation of employment opportunities. The traditional approach of our education system has been oriented towards knowledge and skill development, which spawns job seekers, not job creators. I am not implying that business owners do not need such skills, but that they also need exposure to complexities that go much beyond.

So it is imperative to fine-tune our education system to contribute to the nation’s economy by ensuring that its graduates are contributors as well as leaders. It is my strong opinion that we should not wait for the youth to complete their formal training and education before providing them with entrepreneurial exposure. The sooner it starts, the more exposure can a budding entrepreneur get.

Entrepreneurship is a subject that will not only encourage self-employment but also help the students to develop a positive personality along with a sense of self-reliance and responsibility. Even if our youth do not go forward to set up their own business, exposure to entrepreneurship helps them understand the nuances of business executives and appreciate the decisions taken. This helps them stay in line with the company vision, with grounded expectations, thus ultimately helping progression in their career.

In VFS, we have a structured methodology to orient our women customers on entrepreneurship. We also expect them to take the learnings home to their children, the next generation. This is important as, with their mothers as examples, many of the children of our customers may want to be self-employed. The education received informally from the previous generation will help them grow faster.

Lastly, even if the formal education system does not have options to study the skills of entrepreneurship, I would urge my young friends and their parents to try and find avenues. Be it giving tuition, running small-scale social entrepreneurship programs, or even trying out the available games on entrepreneurship, please put in some serious effort and use the net to learn more about the business.

Let us not wait to complete our formal education, but get work experience before diving into the entrepreneurial journey. Try them in parallel wherever possible.

Micro, small and medium enterprises (MSMEs), in their quest to maximize profits, often end up ignoring one of the most essential contributing factors toward the success of a business—happy customers. The entire process of keeping costs low, increasing financial viability, organizing the supply chain, etc. is important for an enterprise, but focusing on customer relationships is a low-investment, high-return strategy.

There are several reasons why investing in customers is bound to be fruitful. However, many entrepreneurs fail to understand the true extent of customer relationships. For starters, an enterprise’s bond with its customer is not merely transactional. Genuine bonds extend beyond the exchange of goods or services. The businesses that stand out and inspire loyalty among customers are the ones that take that extra effort to ensure their satisfaction.

The entrepreneurs who think long-term will ensure that customers are approached for their feedback even after they have made their purchase. This is beneficial in multiple ways. Not only does it help a business understand their customer’s mindset, but it also serves as a reminder to customers who, even if for brief moments, think about the business and their experience. Needless to say, it also gives customers the impression that the business cares about them. I would even venture to say that if the customer wants a non-related product but still asks your business representative for personal advice, the bond is made.

Apart from customer feedback, MSMEs can also come up with innovative means to market their endeavors. New schemes, new features, and new facilities can all be announced through personalized emails, messages, and in some exceptional cases, even through phone calls. Every element where a business spends time and effort to enhance the efficiency of goods and services deserved to be marketed before customers.

Apart from the other methods of creating customer relationships, such as gifts and discounts on special occasions, another benefit of forging customer relationships is to use them for market research. By overlooking their existing customers, many enterprises lose out on understanding the changes in their demand, their new needs that can give the enterprise ideas of expansion, and their shortcomings.

Micro and small enterprises have a huge advantage in all these domains. They enjoy the benefit of not having to invest the kind of time, effort, and expenditure that large-scale enterprises require.

The importance of customer relationships can be gauged from the growing CRM branches of large enterprises. Micro and small businesses can recognize the advantage of easy access and greater visibility over their customers to build lasting interpersonal customer relationships. Be it through handwritten notes, token freebies, or personal follow-ups, these enterprises can inspire immense loyalty and goodwill among their customers.

It should not come as a surprise that even in this day and age, word-of-mouth holds an overwhelmingly great value in growing a business. Therefore, a satisfied band of customers can eventually bring a whole party.