Everyone who starts a business or micro, small, and medium enterprise (MSME) has the same goal, to gain profits and a better life. Various types of efforts are made so that the business can grow and generate profits. However, there are still many barriers to achieve this success.
For people who have never started their own business, the decision to start a business can be overwhelming because of the many new things that need to be learned and done. However, the opportunity to build a business in Indonesia is still wide open. BPS said that Indonesia already has 65.5 million micro, small and medium enterprises (MSMEs), an increase of 1.98% compared to the previous year.
Data from the Ministry of Trade shows that there are already more than 15 million MSMEs or around 22% of the total MSMEs throughout Indonesia who have been onboarding to the electronic trading platform until mid-August 2021. With this positive growth, the government is targeting 30 million MSMEs for onboarding to the digital platform at the end of 2023.
However, business opportunities cannot develop or even go out of business. Therefore, beginner entrepreneurs need to make plans in advance to build a more focused and structured organization. To be clear, here are five tips for starting a small and medium business that beginners can do:
Idea validation is the process of testing before someone who wants to start a business launches their name, slogan, product, service, or website. It is a series of research and development processes that large companies use to test product ideas before releasing them to the public. The idea validation process can be done in various ways, such as surveys, interviews, and research to get the best results.
For example, people who want to build a business in the food and beverage sector can validate recipe ideas by doing a “smokescreen” through online advertisements directed to an exclusive site. On the site, visitors can register their email to get more information about opening restaurants, cafes, launching new recipes combined with discounted offers. If many people give their email, the business idea that person wants to build has an interest.
Doing market research
After validating the business idea, the next step is to spend money and conduct market research to get the business accepted by consumers. It is a pivotal step to build a sustainable business for the long term. Market research is about collecting and analyzing data related to the target market to know the needs of the target market itself. However, keep in mind that the carried out market research must be in line with the business on the plan.
For example, people who want to start a business in fashion need to research consumers’ favorite colors, trending fashion styles, popular fashion influencers, the best online platforms for selling the products online, and much more. Meanwhile, people who want to do business in the food and beverage sector need to research different things. They need to study the best raw materials for the recipe, the size and the shape of the packaging for their products, the interior design for their restaurant or cafe, to which online platform is suitable to market their business, and much more.
Implement risk management and identification systems
Every business has its risks, starting from human resources, production materials to disasters such as fires and natural disasters. Therefore, business owners must know how to identify the business risks that they run to implement appropriate risk management to minimize the impact.
In addition to risk management, business owners also need to pay attention to other management systems such as financial management, HR or employee management, marketing management, production management, development management, and recovery management. Management is a systematic process in organizing that allows members to control and supervise to achieve the organizational goals.
If the business owner has insight into the management system and implements it correctly, managing the organization can become easier. The business can also grow and be sustainable.
Develop a marketing strategy
A business owner needs to know how to market their products or services effectively to grow their business. The first step can start by using data from previous research. From the data research, the business owner must determine the segmentation of the market, the target market, and the position of the product or service in the market.
In addition, business owners can also take advantage of free online marketing channels, such as social media or opening a shop in the marketplace to expand their marketing reach. If there are costs to be incurred, take advantage of advertising platforms from social media or marketplaces that are used to boost sales.
Creativity is essential in running a business to remain relevant to the fast-paced developing era like now. If business people don’t dare to be creative and innovate, their work may go out of business.
Today, business innovation can come in various forms. Business owners can innovate in terms of their products and services, such as making the latest unique recipes, designing clothes in collaboration with famous figures, or giving gifts in the form of cashback or free shipping for every transaction made.
In addition, business people can also explore the latest technological innovations to make it easier for consumers to transact, communicate, and find their products or services. For example, using contactless payments such as QRIS to purchase products or services, build a website to increase consumer trust, and much more.
Dare to take risks
Starting from a dream fantastic idea, someone can start a small business in any industry in the current digital era. At the same time, these businesses also have the potential to threaten other brands that are already present in an ecosystem. However, it will only be an illusion if the business owner does not prepare himself carefully to face the emergence of new competitors.
Starting a business, in any form, is not an easy matter. Not all planned things can run smoothly without problems. Business owners will surely meet with various obstacles on the way to build their business.
When they run out of capital, one of the fastest and favorite ways to solve it is to look for a loan as funding. If the momentum is good, the money can be a tremendous momentum in accelerating its business. However, at the same time, fresh funding obtained from loans also can become a vicious circle that leads to business shutdown if the business owner does not balance it with good management insight and risk mitigation, notably related to the financial aspect.
On the other hand, creative innovations without understanding the problem to solve can also be an issue that haunts business owners. In general, they only realize this after realizing that their business becomes difficult to grow again. If this happens, like it or not, there must be an evaluation related to the innovations carried out.
Doing business with a fantastic idea, big funds, and courage alone as capital is not enough. Business owners also need to balance their capital with other insights such as knowledge about management, market trends, to emerging technologies. Otherwise, business owners will face limited space for growth and unfair market competition because they are filled with other players who have more capital and become predatory pricing.
So, if you want to enter the business world, business owners must have a lot of capital. However, it is not only capital in the form of money, but also knowledge in management, market, technological trends, to the point of having a strong mentality. That way, if they meet failure and fall many times, they will still have the courage to get up and learn more. The bottom line is, don’t be afraid to take risks.