Category: Business Startup Ideas

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5 Common Pitfalls Startups Encounter and How to Avoid Them!

Home to 21 Unicorns, India is being the 3rd largest startup ecosystem. The Indian startup has received increased attention in recent years. This simply means that their numbers are on the rise and they are widely being accepted and recognized as an integral part of growth.

Though the immense growth and support for startups that are available in all dimensions is a pleasant change, the cold and hard fact is that most of the startups in India fail within 5 years of their launch, as per a report by IBM Institute for Business Value and Oxford Economics.

There are numerous reasons behind the failure of the startup. But one major reason is due to the lack of innovation. Also, startups that fail tend to repeat the same mistakes that prove costly shortly.

Here is a list of five common pitfalls that every entrepreneur makes at the early stages, but should steer clear of them at any cost:

1. They don`t have a Leadership Team that encourages diversity

Starting our list with the most common but costly mistake that founders usually make is when they begin hiring people for their team. Many entrepreneurs hire people just like themselves. On the surface, this appears to be a sound idea, but the danger lies underneath.  Without people who challenge the stereotypes and the founder`s thinking, a startup fails to identify new opportunities or to spot risks until it`s too late.

Avoiding this trap is essential to make a startup business successful. Startups should hire people who think out-of-the-box and know no creative boundaries. The diversity of ideas, skill sets, and backgrounds are the key essentials of every successful startup.

2. They Don`t Invest Time To Find The Right Venture Capital

Capital is essential. But this does not mean that every startup should rush after it. Speed is important, yes, but without breaks, it will result only in a misadventure. Finding a balance speed to find the right fit is equally essential.

Finding perfect Venture Capital is just like finding the right partner for marriage. Take enough time to find the right match- and avoid jumping at the first or the biggest check.

VCs are always on the lookout for the next Uber, Razorpay, Nykaa, or Facebook. To increase their chances, they may invest in multiple companies and come with a growth-at-all-mindset.

To avoid a situation like that put in a considerable amount of time to find a VC partner that will provide thoughtful guidance, mentorship and will be there for you during the challenges.

3. They Create Products Without Considering Customer`s Pain Points

Too often founders get overly enthusiastic about their ideas related to their product or service. They often believe that once they build a product, customers will come. But building a product or a service without any customer validation or A/B testing can be dangerous for a business.

Instead, founders of startups should always find an alpha customer and then create a product to solve the customer`s biggest pain point. Creating a customer-centric product doesn`t happen by just sitting around a conference table brainstorming. The idea to build an amazing product comes from seeking out and tackling the real problems in the world that already exist.

4. They Lack a Clear, Concise & Focused Go-to-Market Plan

More often than not, startups are known to overestimate the demand for their products. Generally, they also lack a clear understanding of how to bring their big ideas to the market. Entrepreneurs should document a clear and concise path to their profitability. To chart this document they should conduct rigorous research and analysis that challenge their market estimates.

This requires an in-depth knowledge of the strengths and weaknesses of their market competitors. Along with that, they should also determine the company`s proprietary advantage in each market segment it is looking to penetrate.

It is also important to be prepared in advance to be able to shift the business with the technological advancement or according to customer needs. And while adaptability is crucial, having a focused plan is also essential. As a startup the resources are generally limited, thus, it is important to be laser-focused for maximum impact.

5. They don`t build Strategic Partnerships

Many startups think about partnerships just in terms of capital and checks. But startups also require strategic alliances that will help them refine their business models, new customers, scale revenues, and generate market awareness.

By making partnerships with large and established companies, startups can save costs on R&D resources as well as the expertise of their professional team.

Want to know what are the other pitfalls that entrepreneurs should avoid? Know it all from the top industry experts with our Everything about Entrepreneurship course. EAE course will give you access to marketing expertise and essential mentorship.

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‘Completion before expansion’- Invest your money on a complete project

Planning to buy a new home? Know why you should invest your hard earned money on a complete project rather than an under-construction project.

 

 

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Business Startup Ideas E-Commerce Startup

How to Start Toys Manufacturing Business in India in 5 Steps!

Toys are an integral part of our childhood. Popular among babies, kids, teens, and even adults, everyone loves toys. Toys not only entertain children but also help them to develop the horizon of their imagination, dexterity, and more.

According to National Investment Promotion & Facilitation Agency, ‘the toy industry in India is estimated to be $1.5 billion, which is around 0.5% global market share. The Indian toys industry is also estimated to grow to $2-3 billion by 2024’.

The report also stated, ‘the demand for the toys will increase by 1.2 times in Tier II and Tier III cities by 2025’.

The toy manufacturers in India are mainly located in Karnataka, Maharashtra, Tamil Nadu, NCR, and across central Indian states. The sector has 4,000 toy industry units from the MSME sector.

Last year in August 2020, Prime Minister Narendra Modi also urged the young entrepreneurs to focus on bringing innovation in the toy sector as the Indian toy market has huge potential.

The Prime Minister also suggested that the start-ups should come up with creative designs and innovative toys that can instill a sense of pride and can help our domestic toy makers.

Apart from the domestic market, the toy manufacturing business also has potential in foreign trade.

Recently, the Swedish furniture maker IKEA announced to upscale the sourcing of toys from India on March 1, 2021. IKEA has a range of over 1,000 products as part of its kid`s range and is planning to expand its operations by sourcing toys in New Delhi.

Starting a toy manufacturing business is a brilliant low investment business idea. Here are 5 steps in which you can kick start toys manufacturing business startup in India:

1. Research your market

Whether you are planning to start a café or toys manufacturing business, it is essential to do market research. Having adequate and well-researched information will help you to create a business model. You will not only learn about your competitors but also about your target audience.

Hence, before starting a toy manufacturing business in India spend months researching to gather as much information as you can about this business.

2. Bring Innovation!

The toy manufacturing business does not need a huge investment to start it. However, there is one thing that you should have to succeed in the market- creativity!

Try to design unique toys and their exceptional designs will make you stand out from the rest of the toys manufacturer. Toy businesses in India are fast-paced, which means that the market will keep evolving. Your customers will want different things in a very short time. So, it is very important to be creative to meet the demands of your customers.

3. Find your Niche

The toy manufacturing business in India is booming with plenty of opportunities and competition at the same time. If you want to start a toy manufacturing business, you need to know what it takes to succeed in your niche market. Whether you want to manufacture soft toys or you would also like to venture into the market of electronic toys, you must make a decision.

Finding a niche market not only allows you to find your target customers but also gives in-depth knowledge to cater to their needs and preferences.

4. Raw Materials

The process of manufacturing toys is easy and simple. You will need basic raw materials that include pattern, fabric cutting, mold making, fiber for stuffing, sewing machine, eyes, and nose pinching.

However, if you want to venture into the manufacturing of electronic toys then you will need a toy manufacturing machine and raw material. Along with it, you will also need to hire a staff.

5. Toys manufacturing machine

If you only want to manufacture stuff toys, you will need raw materials of premium quality and a sewing machine. But, if you want to set up a manufacturing unit, you will need to secure a space first. Finally, you will need to install the toys making machinery. Some of the most vital machines and equipment are:

  • Digital Multimeter
  • Temp controlled
  • Drilling machine
  • LCR meter
  • Analog meter
  • Tool kit
  • Electronic screwdriver
  • Combined soldering desoldering station
  • High-speed mini drill set
  • Digital storage Oscilloscope
  • Tools, equipment, and dies, etc.

You will also have to obtain a fire protection system to protect your unit from fire. The initial investment might take around INR 2,00,000 to 5,00,000 if you want to start a toy store in India.

The toy manufacturing business in India has potential in the domestic as well as the international market. The main driving factor behind its growing popularity is the increased demand for quality and luxury goods.

Are you thinking about setting up your own toy manufacturing business in India? With our ‘Everything about Entrepreneurship’ course you will not only learn how to start a startup but also how to make it successful.

Join Free orientation Session-Dr Vivek Bindra

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Business Startup Ideas Marketing Sales Strategy

Branding: Why it is crucial while scaling your startup business?

Branding plays a crucial role in the success of every business. And when it comes to startups, branding is of paramount importance. It is vital for the development and growth of an organization.

Your brand becomes a part of the customer`s everyday life. For instance, if a customer wants to purchase a product, he or she would like to buy from a company that not only offers great quality products but also provide other assurances. And, if a customer feels that your brand is the best in the market, then a customer will buy it even if it is a bit costlier. This is the impact of having a solid brand image.

A brand is what helps your business distinguish your product from the league and helps consumers associate themselves with your brand.

But many entrepreneurs fail to recognize its importance in the initial stage of the business. They make the mistake of obsessing over their products and turn a blind eye to every aspect of the branding. This can lead to a series of disastrous consequences for the product as well as the company in the long run. Due to the negligence, the brand might become unnoticed and irrelevant.

According to an analysis conducted by the Marketing Accountability Standards Board (MASB), ‘brands contribute on an average of 19.5% and if the impact is measured based on firm cash flow, profits and firm value, the impact could be contributed for over 50% of the enterprise value.

Another report by the Marketing Science Institute (MSI) that included around 220 consumer products found that a superior brand preference or reputation commanded price premiums of 26% on average, even when brand quality is the same.

Brand Image: A living persona

Your brand image is like a living entity. If your brand can create ripples in the market and generate excitement by showcasing life, you can get a loyal clientele. Your brand grows and matures over the years and builds its persona just like a living entity and provides a solid competitive advantage.

In this age of digitalization, it is important to have a unique brand strategy that will engage the audience across multiple mediums. Therefore, it is essential for every company to carefully select and invest when it comes to building a brand that speaks volumes about the company`s unique business strategies and core values.

Branding is essential for business sales too!

If your brand connects straight away with your target customers, it will result in an excellent customer experience. And according to a report published in Forbes, ‘73% of companies with above-average customer experience performs better financially and also get higher revenue’.

Another report suggests that around 17% of the consumers are willing to pay more to purchase from a brand that has a great reputation and market value.

Harvard University professor, Gerald Haltman who is the author of ‘How customers think: Essential insights into the mind of the market’, writes in his book that 95 percent of a customer`s decision-making process happens subconsciously. Hence, the major reason why a customer will choose your brand instead of your competitor will largely depend on how the consumers ‘feel’ about your company.

And why this factor is important for a startup? Startups tend to have major competitors who have a larger team, better infrastructure, brand reputation, and marketing knowledge. A good brand image will help you to attract more customers and your product will finish on top of your competitors.

Brand Image: Honesty v/s Perfection

Startups represent innovation and a distinct approach towards the same product that is already available in the market. It`s their uniqueness that connects them super strongly with their customers. However, too many companies want to represent their brand under a perfect and idealized spotlight. This results in a brand image that lacks the character, texture, and trust of a consumer.

Another blunder that most startups do is copying other businesses or internet trends and images. Creating a fake image of their brand that does not represent them would simply mean wasting the most valuable emotional factor due to which a startup ends up eroding its customer base.

Branding in the internet age

With technological advancements, the internet has slowly taken over. Today, with the advent of affordable smart-phones, branding of products online is no longer a luxury. It has become a necessity for startups where they can sell their products to a wider audience.

With cost-effective internet that is available to most people, a business must use this opportunity. Despite the changing times and mediums of advertisement, branding is still an integral part of advertising and the business world. Hence, listen to what stakeholders and customers have to say about your brand, and use their feedback to make improvements. This will also build a better brand image.

Learn how you can take your startup to new heights with our Everything about Entrepreneurship. Click here to know more about this product: https://www.badabusiness.com/?ref_code=ArticlesLeads