With the salaried-class people finding it hard to make a living in modern times, you might be thinking of starting your own business or enterprise.
As with any business venture, your investment must be low and your profits (RoI) must be high but how exactly to do that? That’s exactly what we’re going to see in this article.
Before that, can any business idea/strategy really generate a high Return on Investment (RoI) for you or is it all just a myth? Why do most of the orthodox business ideas not work out? Kindly read on to find out.
Why should you be updated with the latest business ideas?
Any business is a constantly evolving domain. Today’s strategies and business ideas might not work tomorrow. Therefore one needs to be updated with the latest business ideas in one’s business domain to survive in the market. Given below are the reasons why you should be updated with the latest business ideas:
A new financial year (FY) or a new financial quarter is about to begin
Business ideas and strategies, like most things on earth, reach their maximum potential or saturation point after a while. The business idea/strategy that helped your startup grow might not work well if you’re trying to maintain your business (volume).
That requirement may need a completely different business strategy. Also, the business environment keeps on changing at least every quarter. If the business environment was favorable for your business strategy in the last quarter, there’s no guarantee that it will be favorable for your business strategy this quarter.
So one needs to assess the business environment, government policies, business performance for the last quarter, among various other factors before formulating a business plan for the new quarter.
Every business plan is made depending on the profit the business makes and the investment capital the business has. If these two factors rise or fall (vary), then the business plan is altered drastically to make the business survive in the market or to expand the business.
Very often business plans get altered to please firms’ investors or according to their investors’ suggestions. You need to make your business plan as appealing and as practical as possible to convince your investors to further invest in your business.
Changing taste and needs of people or firms
All the businesses in the world sell products or provide some services to people or other organizations. So their business fundamentally revolves around people’s tastes and needs or other organizations’ needs.
If people’s tastes (trends) or needs change or if organizations need a different product or service, then businesses have to adapt to satisfy the changing requirements.
A business cannot hope to carry on providing the same product or service or employ the initial business strategy for all eternity and survive in the market.
A business has to adapt to changing requirements and changing business environments to survive in today’s competitive market. The competition in any business domain is stiff and cut-throat.
If your business leaves any void in customers’ needs or clients’ needs then your competitors will fill the void. You don’t want that, do you?
If there’s a change in management
Employees, managers, and executives leaving an organization after a few years of service is quite a common occurrence these days. As new people come into an organization, there is bound to be a change of business plans and strategies.
After all, no two people think alike. An organization must just ensure that these new business ideas and strategies are practical and will give the organization more profits.
As your average yearly profit increases, you must change your business’s head office and branch offices, depending on your business’s profits and prestige. As the saying goes, “When in Rome, be a Roman”.
If your company is an MNC and your offices are small and under facilitated, it will affect your business’s reputation and perception.
A business’s reputation and public image are what drive revenue, profits, and future business prospects for that business. So maintaining them is very important for a business.
How starting a business with low investment help you?
Money is very important to any person, not just to businesses. Whether it’s businesses or people, everyone wants to have a decent amount of money in their bank accounts. Nobody wants to become bankrupt and end up on the streets.
That being the case, you should definitely begin your business with a low investment. Initially, at least, you must only invest that much in your business, that you don’t mind losing or the loss of which you can cope with.
Beginning your business with a low investment will help you break even faster and will help your business grow at a faster pace. Given below are businesses that grow quickly (generally speaking) and require low investments:
Food trucks are quite common in small towns across the world and can even be found in some localities in some cities. Some people even order food from food trucks these days.
Food Trucks are very popular among the lower-middle-class people, who cannot afford to dine at fancy restaurants.
Food Trucks can generally be found near places where people live in cheap rented apartments, where many firms are present, or where a school or college is present. These places are hot business hubs for Food trucks.
Food trucks offer unique cuisines and tasty food at very reasonable prices and hence, are very popular among the masses. Food trucks are mobile food providers that never go out of demand.
They also require very low investments. So, if you’re looking to start a food business, food trucks are a smart choice.
Ice cream parlors
Everybody loves ice creams! Just listening to that name or reading about it makes people’s mouth water and gives them nostalgic memories. So, if you start an ice cream parlor in a decent place, you’ll never run into a loss.
Ice cream parlors require minimal space, equipment, and staffing. Therefore, they also require minimal investments. You must choose a catchy name, logo, and theme for your ice cream parlor to attract more customers to it.
Opening an ice cream parlor near a popular movie theater, college, or restaurant is a very good business idea.
You must also provide some unique varieties of ice creams and brownies to enhance the popularity of your ice cream parlor. You don’t want your ice cream parlor to become one among the junk, do you?
Everybody needs to go through schooling and most people really don’t care which preschool (Kindergarten school) they send their toddlers to. To start a preschool, you only need a small one-time investment, vans, and drivers to safely commute toddlers, good education material, and an innovative way of teaching.
If parents find that your preschool employs a unique and innovative way of teaching and that it has excellent facilities for children to play, admissions will pour in and you’ll be profitable in no time.
When it comes to preschools, the safety of its children is a top priority to any preschool. Any compromise or bad incident on children’s safety will lead to the closure of your preschool and even your imprisonment. So, be very careful in that regard.
Everyone wears clothes (even beggars) these days and everyone needs a laundry service to keep their clothes clean and neat. Most laundry services these days do doorstep pickup and drop service.
To make your services even more lucrative, you can offer cafe services or a reading room inside your laundry center. That way people can drink coffee or read a book while their clothes are being washed.
If your laundry center also irons your customers’ clothes, that would be really convenient for your customers.
Laundry centers require more initial investments than businesses mentioned above but they also help a person break even quickly as the demand for laundry services is high, especially in cities across the world.
Cafe cum bookshops
People come to these places mostly to date other people (belonging to the opposite gender) rather than to read books or drink coffee. So, if you’re opening a business of this kind, kindly ensure that the ambiance at your place is ideal for dating people.
This kind of business is a hit in metropolitan cities across the US. A cafe business center has been portrayed in the famous American serial, ‘Friends’. So starting a cafe cum bookshop is not a bad idea in the US. It requires minimal investment and staffing and will make you profitable in a short while.
House Cleaning service
This kind of business is popular only in metropolitan cities across the US. Mobile apps like UrbanClap and Haptik are examples of this business. So, if you’re thinking about starting a house cleaning service, start it only in metropolitan cities in the US.
If you start it anywhere else, there won’t be a demand for your services and your business will run at a loss. This kind of business requires a website to be set up with your contact details and a few staff to do your service.
It doesn’t require a huge capital investment. This kind of service is opted for in households where both the parents are working and don’t have time to clean their house.
Going to the gym and doing body-building has become a fashion among young boys these days. So, if you open a gym, you can be sure of getting profits. Setting up a gym requires the purchase of many types of equipment and hiring a few gym instructors.
Therefore, the initial investment is quite high but the demand for gyms is high and their monthly maintenance charge is quite low. Hence, by setting up a gym, you’ll break even in no time and be profitable.
The Internet is used by office goers for their official work, it is used by college students for their studies, and it’s also used by children and other people for entertainment purposes. Hence, the Internet and browsing centers never go out of demand.
If your browsing center also offers Xerox, printing, and binding services, it will appear even more lucrative to people.
Setting up a browsing center requires more initial investment than the businesses mentioned above, but the demand for browsing centers is quite high and they will give you a very high Return on Investments (RoI).
Just make sure that the quality of your service is quite high and that your browsing center is air-conditioned to attract the maximum number of customers.
This type of business will appear unattractive to most people but it’s definitely the need of the hour in many cities across the world. So, if you’re interested in this kind of business, kindly clinch a profitable contract with your state government.
If you want to start an educational institution and you want cool business ideas on how to run it successfully, kindly read this article.
What is the mindset that is required for starting a business with low investment?
With the middle-class people struggling to make a decent living these days, most people are tempted to start their own business and become an entrepreneur but the fact is that not all people have what it takes to become a successful entrepreneur.
Becoming a successful entrepreneur requires a certain mindset and some skill sets, which only a few people have. Here are the factors to consider before starting your own business:
Demand for your services or products
Before starting your own business, first, analyze if there’s a market demand for your products or services.
Launching a company that provides products or services that are not in demand by the people or by other organizations will only make your organization incur a loss and the whole point of launching a business is to be profitable.
Analyze your skills and passions
While it is important to launch a company that fills in the gaps in the market, it is also equally important to launch a company that falls in line with your passions and strengths.
If you venture into a business domain that is booming at present but of which you have no knowledge of, you will definitely incur a loss in your business. You will not know how to handle your staff and your business will be shut down.
So kindly make a SWOT analysis first, before you start a business of your own. These are the things that you must analyze before you start your own business:
- Skills: Do you have the skills necessary to run the business that you want to?
- Experience: Do you have experience in the business domain that you want to venture into?
- Knowledge: Do you have knowledge of the market pertaining to your business domain? You must be able to handle changing business environments and changing government policies.
- Availability of resources: Will you be able to hire skilled staff to assist in running your business? Some businesses require highly skilled professionals who are not available in every country.
You may have to hire foreign professionals and that can be a costly affair. So, hire only those people whom you are sure are skilled and can give you profits. You must provide unique products or services to stand out and become popular in your business domain.
Invest only that which you can afford to lose
As the old saying goes, “Do not put all your eggs in one basket”. Initially at least, invest only that amount in your business that you don’t mind losing.
This way, you can test various business ideas and strategies and see if the business climate is suitable for you to launch/expand the business of your dreams.
As an entrepreneur, you may want a healthy return on all your investments but neither the world nor the business climate is always fair. Sometimes, your investments may not yield any returns due to unforeseen circumstances or people’s changing tastes.
So, if you put all your money into a business idea or strategy, you may lose all your money and end up on the streets with a stomach burn. So, carefully plan your investments and invest only that amount in your business that you don’t mind losing.
Be open to new ideas and suggestions
Just like most of the things on earth, business ideas and strategies become outdated after a while.
The business idea or strategy that initially helped your business expand and grow might not work well if you’re planning to sustain your market share or sustain your business volume.
That requirement may require a totally different business strategy. So, since the business climate, government policies, and people’s and clients’ requirements/tastes change frequently, it is imperative for you to change your business ideas and strategies periodically and accordingly to survive and grow in the market.
Why do most of the business ideas not work out?
As I said, most of the people want to become entrepreneurs these days but only a few clicks. Why? It’s because most of the people implement inappropriate business ideas or business strategies or simply don’t have what it takes to become a successful entrepreneur.
Here are the reasons why most businesses and business ideas fail:
Not undertaking a business pertaining to your passion
Most of the people these days simply go by current opportunities and not by their passions and strengths. Therefore, they venture into a business domain that they have zero knowledge of and they fail miserably.
If you start a business that is in line with your strengths and passions, you will automatically come up with innovative ideas to expand and improve your business and with innovative ideas to overcome the challenges that you face in your business.
Periodically assess your business’s performance, change your business ideas and strategies, and take feedback from your clients or customers to improve your business. A business that does not adapt or evolve over time will not survive for long in the market.
Not analyzing your competition
As the old saying goes, “Know thyself and know thy enemy even better”. You must analyze the strengths, weaknesses, and business strategies of your competitors. This will help you in making better business plans and strategies to tackle your competitors.
It will also help in improving your existing products or services and even help you in coming up with unique products or services.
The best way to know your competitors well is to become a member of their products’/services’ forum and to listen to their customers’ complaints and appreciations.
Failure to analyze your competitors will result in a drop in your business volume and loss of your market share.
Not understanding your customers/clients well
All the businesses in the world were launched to cater to the needs of their clients or customers. Therefore, in order to be successful in your business, you need to understand the needs and tastes of your customers or clients very well.
You need to change your services and business ideas periodically to suit the changing needs and tastes of your customers.
You also need to understand your business model thoroughly and constantly strive to improve it in order to deliver better quality goods or services to your customers or clients.
If you constantly provide a product or service that is not in demand or if you stick on to your initial business strategy for a very long time, your business will definitely incur a massive loss and shut down.
Unsustainable business idea or business strategy
Whenever you are planning to implement a new business idea or strategy or whenever you’re planning to launch a new product or a new service, you must check its sustainability without being biased.
If your new products or services offer a never-before-seen solution to the existing market problems or if they fill gaps in the market, they will be a hit. If they are something that’s neither innovative nor required, they’ll fail big time in the market and you will incur massive losses as a result.
Your new products or services should also be scalable for them to be successful. So, kindly check all these factors before you launch a new product or service lest you’ll fail.
Not consulting with a market expert
Businesses are highly successful when they mix innovative ideas with existing market knowledge and wisdom. So, before you launch a firm, kindly consult with an expert in the domain.
You can evaluate his advice and mix it with your own innovative ideas to launch a stunning product or service. Do not be opinionated and always be open to new ideas and suggestions from experts in your domain to improve your products or services to the maximum possible level.
Failure to consult with an expert in your business domain could lead you to make serious business strategy mistakes and might even result in you incurring heavy losses and closing your business. You don’t want that, do you?
There are people who have done serious business strategy mistakes in the past and shut down their business as a consequence. Why not learn from their mistakes rather than commit it yourself and learn the hard way?
Life is very short. We don’t have the time to commit all the mistakes possible and learn from them the hard way. We have to be smart and learn from the experience and mistakes of others in order to succeed in our business or in the world in general.
How to implement these business ideas?
Once you’ve thought of a great business idea or strategy, you need to implement it well to drive profits to your business. Otherwise, it’ll all be in vain. These are the strategies you must follow to implement your business idea effectively.
Just dive in, don’t analyze too much
You must evaluate the sustainability, need, and scalability of your business idea before you implement it. You can interact with people or your clients to know if your business idea is the need of the hour, sustainable, and scalable.
Once you find that it is practical to implement, implement it ASAP!
Don’t ponder over it alone or ponder over it too much to make it something unheard of. Successful business ideas are not always original business ideas. They may have just been implemented properly.
Consult with an expert in your business domain
An expert in your business domain knows all the tricks of the trade-in your business domain. Consult with him to implement your business ideas effectively. Don’t take your own decisions, make business strategy mistakes and learn from them the hard way. Life is too short to commit all the mistakes possible and learn from them the hard way.
A business expert in your business domain will also give you unbiased opinions and suggestions on your business idea. If you evaluate your business idea alone, you may be biased as it’s your brainchild.
Taking the advice of a business expert will minimize the probability of your business failing.
Make your business idea/plan adaptable
Just because you’ve thought of a great business idea does not mean that you cling on to it as it’s your brainchild. The market dynamics, government policies, customers’ needs and tastes, investors’ sentiments, and business climate, all change frequently.
Therefore, your business idea must be flexible to incorporate new suggestions and recent market changes. Only then it’ll give you good returns on your investment.
If you’re stubborn on your business idea and the market dynamics change, your business idea will become ineffective when implemented and make you incur losses.
Your business idea must be plotted down in great detail. The investment required to implement it and the method in which it is going to be implemented must be known in great detail. Only then can your business idea be implemented effectively.
Your business idea must be the need of the hour, sustainable, scalable, and practical to implement for it to be successful in the market.
Listen to your customers
There must be a lot of overlap between what you want to say and what your customers want to listen to.
If you monotonously keep doing what you want to do without listening to your customers’ complaints and queries, your customers will get fed up with your services or products and jump to your competitors’ products or services. That will result in a loss for you and might even lead to the closure of your business.
So kindly listen to your customers and address their queries and complaints regarding your products or services to build your brand’s reputation and trust in your brand. Your company’s revenue and profits are directly linked to your company’s reputation, trust, and people’s perception.
Listening to your customers and your competitors’ customers will even help you device better business plans and business strategies than your competitors. So listening to customers is like a coin with heads on both sides. There are no drawbacks to it.
Get the pulse of the market and that of the people
Becoming an entrepreneur is not about borrowing large sums of money, becoming “rich” and sitting idle, while your employees do the work for you. As an entrepreneur, you have to be knowledgeable and active to become successful.
The internet has connected people and organizations like never before. There are always webinars, workshops, trade shows, and industry meetups happening in your city. Kindly attend all those regularly and learn lots of things pertaining to your trade.
They will help you get the pulse of the market, the pulse of the people, and the pulse of your industry. Based on those, you can device superior business plans and business strategies. You can also get some investors to invest in your business or some valuable business clients if you attend all those events.
Pick an enthusiastic team to implement your business ideas
As far as business ideas are concerned, effective implementation of them is of paramount importance and what really matters. To effectively implement your business ideas, you need a team that has great knowledge of your business domain, understand the pulse of the market, and is enthusiastic about implementing your business idea.
Effective communication among members of your team is key to the successful implementation of your business idea. If the communication between your team members is ineffective then your business idea will be implemented in an inappropriate and ineffective manner. It will not give you the desired results. It might even make you incur a loss (in all aspects). So, beware!
Create a website that communicates your mission, vision, and ideas well
Your company’s website is the face of your company. It conveys your company’s mission, vision, and other messages to the world. Your company’s website can be used to attract more customers to buy your products or subscribe to your service.
It can be used to lure clients into signing contracts with you or it can be used to convey your message loud and clear to the target audience. Your website should be neatly presented and interactive to lure readers.
If you convince people that your business idea will work and that it’s the need of the hour through your website, you can find lots of people (volunteers or interns or job applicants) who are willing to work with you to implement your business idea.
When is the right time to start a business?
This is like asking, “When is the right time to get into a relationship?” Starting a business is like getting into a relationship. It’s a full-time job that requires lots of dedication and hard work from your side. So, you can start a business when you can dedicate all your time and resources to it.
Do not start a business when you are in a depression, have recently gone through a painful divorce, or when you are undergoing a turmoil because then you’ll not be able to concentrate on your business and it will run into a loss.
You must have the required qualification, market knowledge, resources, and capital to start a business successfully. Age does not matter in starting a business as long as you have strength in your body and the dedication towards your business.
Top entrepreneurs who bootstrapped their business and turned into a big business
These are examples of extremely dedicated entrepreneurs.who worked very hard for their business and bootstrapped it to make it a big success in the world. They are:
Steve Jobs and Steve Wozniak started the company Apple in a garage. They were manufacturing PCs in their garage for the working-class people. They had developed two models of PCs when they realized that they needed financing to turn their small venture into an MNC.
They had secured a business loan of US $250,000 from the government organization called ‘Small Business Investment Company’ and their phenomenal growth after that is well known.
Bob Evans founded a chain of restaurants that serve organic farm food under his own name. He initially founded a 12-table small restaurant that served sausages (amongst other dishes) made from the tomatoes grown on his farm.
No restaurant in the US served decent tomato sauce at that time. So his restaurant was an instant hit among the masses and his small restaurant grew into the well-known brand we know today.
Dell computers and laptop companies were founded in 1984. This was done when Michael was still studying at the University of Texas at Austin. Michael had built his company’s first laptop at his college dormitory.
The first investment in his company came from his family and the investment size was the US $1,000/-. Since then, Dell has grown into one of the world’s biggest tech giants.
William Redington Hewlett and David Packard
These two entrepreneurs manufactured Hewlett-Packard’s (HP’s) first laptop at a car garage in Palo Alto, California. They manufactured HP’s first laptop in fellowship with a professor at Stanford University.
That professor had initially invested US $538 in their startup which later on grew to become the MNC we know today.
There are many other entrepreneurs who had bootstrapped their startup and made it an MNC. The above-mentioned entrepreneurs are just a few examples.
Making a startup into a successful MNC depends on the founder’s market knowledge, hard work, and dedication. Even the founder’s qualification does not play a significant role in determining the success of his startup.
For your startup to be successful, it must be founded upon a feasible idea, it must provide products or services that fill the gaps in the market, it should provide unique and needed products or services, and you must be highly dedicated towards it.
Do not start a business when you are in a depression, have recently gone through a painful divorce, or when you are undergoing a turmoil as you will not be able to focus on your business then and your business will run into a loss.
What are questions investors commonly ask entrepreneurs of any kind?
Investors mainly ask entrepreneurs these two questions:
- Who believes in you and how can I get in touch with them?
- Can you tell me a story about a customer using your product or service?
How can you convince investors to invest in your company?
You can convince investors to invest in your startup by following these guidelines:
- Keep your language simple enough for the common man to understand.
- Do not use industry jargon that the investor may not be familiar with.
- Explain the scope of your startup and its working very well.
- Explain your qualifications, market knowledge, capabilities, and experience to your investor very well.
Who is a silent investor?
A silent investor is a person who invests in a business but does not take part in its daily management activities due to a lack of knowledge and experience in that business domain.
How much return on investments do investors typically get?
Investors typically get a 25 to 30% return on their investment in startups. VC firms may get up to 40% return on their investments in startups. This is because VC firms take higher risks while investing in startups.