How do e-commerce startups sustain with minimal profits?

Surviving the first few months of the beginning phase is critical but possible!

Don’t be surprised to see your local Brick-and-mortar business closing or going bankrupt in recent times. With a wave called DIGITAL WORLD, we had all seen it coming!

And why not,

The e-zone is an exciting place to be, with even small business owners, start-ups paving their foot in surviving and competing in the digital domain.

The result?

Most local brands and stores have been shifting their focus into creating an online presence!

So, if you’ve already established an eCommerce business or are looking to toying with the idea of creating your first venture, now is the time to shape that paper draft into a screen reality!

But before that,

Guard this reality mantra — Don’t expect to make a profit from the get-go. It starts pouring in much later!

Yes, before you expect big, happy numbers appearing on your cash statement, you got to know the tricks to sustain before the break-even point in your small venture.

Wondering, how exactly do small businesses or ventures survive without actually making any profits at a nascent stage?

Well, the key here is to understand that — there’s something called a lean period before the revenue or extra income starts coming in, where business owners are expected to be creative to keep the business wheels running!

We have listed some of the options that can help your local business survive without profits. Follow these suggestions until you turn a profit!

Bootstrapping and self-funding

Bootstrapping is building a company from the ground up with nothing but personal savings, and with luck, the cash coming in from the first sales. It may not be such a hip option in today’s time and age but going the “old is gold” way and self-funding your business is working in favor of many business owners.

How to go about it?

1. Prepare a business plan and see how much money you require until the money starts coming in. It will help gauge whether it’s a suitable option or not!

2. Asking others for money (family members, relatives, friends) is a sensitive chapter, to say the least, but once borrowed — you have to see that your lenders won’t lose in most cases. Also, make sure you keep a written agreement for every personal loan you have taken so far.

The Revenue Generators

Building profits is something you may be aiming from day one but generating steady cash flow should be your number one priority especially at the starting stage.

How to go about it?

1. Work with a digital platform that offers low upfront development costs and work around a business model that can generate a permissible ratio of cash for the time being.

So, instead of looking to build a brick and mortar store why not create an online store where chances of making sales are much brighter and faster!

2. Get a cue from various Indian start-up success stories like Flipkart, Zomato, etc. Make available the business tractions new companies can attract potential investors and gain a competitive edge in their industry. Depending on the industry and external marketplace factors, you might measure traction through sales, customer response, or market research.

Join an incubator

A start-up incubator is a collaborative program for start-up companies — usually physically located in one central workspace — designed to help start-ups in their infancy succeed by providing workspace, seed funding, venture capital mentoring, and training.

How to go about it?

1.Since incubators mostly work sector-wise i.e. Healthcare, e-commerce, it’s only viable that you research first and look for the one that is appropriate for your business.

2.Some of the most well-known names include CIIE IIMA, Indian Angels Network, NSRCEL, etc.

Discover Government Schemes

Okay, it’s quite a common issue to finance small businesses, especially in India but that’s not to say there aren’t any options. In fact, many avenues, bodies promote help shape up the small ventures. Many institutions like Small Industries Development Organisation (SIDO), Startupindia, etc provide a range of schemes that are conceptualized by the government to help build small businesses.

How to go about it?

1.The government-built schemes and funding institutions assist in microfinancing, working capital funding, and business-specific financial aid.

2.Get to know the kind of support you require, figure out what’s necessary to make the cash flow statement balances on a monthly basis before you can actually apply to such schemes and support.

Decide what’s best for you

While the above-mentioned hacks may help you sustain in the initial period or lean time — it’s up to you to figure out what will work for your business and need. Also, it’s not necessary to stick to only one fund channel.

How to go about it?

Know that, many successful start-ups are often seen using a combination of techniques to keep it above the water! So, do not limit yourself from exploring various channels and options.

Note that,

Start-ups, eCommerce businesses are poised for remarkable growth in the coming years. You need to approach it in the right way to see fruitful results.

Here are some quick tips for eCommerce success:

1. Take your time to launch the website

Don’t rush into launching the website. Remember you get only one shot to launch a site and it’s pretty obvious that you don’t want to mess it up. Purchase your domain name, include or indicate the “coming up” page but do not reveal the website content fully until you have figured out the SEO, Social media campaigns, paid ads, content marketing, etc.

2. Test and re-check everything.

Always make sure to check the analytics — before, during & after launching your eCommerce venture. Take it from the customer’s viewpoint. Figure out what’s working, what’s not, why, and how behind those questions/answers. Get help from some of the best A/B testing tools/platforms.

3. Make the end-user a priority

The biggest disadvantage of eCommerce is the inability of a user to feel, touch, or see products before making a purchase. The best way to balance this shortcoming is by offering the best pricing options, free shipping, easy checkout process with simplified shopping carts to stay ahead of those physical shops and businesses.

4. Be Social

In today’s day and time if your e-business is not social enough — it won’t survive much. Social media is the heartbeat of your business and being in the loop gives you enough scope to interact, glance into the lives of your customers. Appoint a social media expert to handle the daily social activities necessary for your set-up. Do keep a tab of reviews, testimonials to improve in certain sections, or appreciate the positive feedback of your business.

5.Create an App

Most buyers prefer to use mobiles whenever browsing or looking for items, products — because it’s pretty convenient that way! Nowadays for an e-commerce business to have an app is a common gateway — for the simple reason being, if you aren’t developing eCommerce businesses with mobile in mind, you may be obsolete in three to five years.

6.Beat the competition with SEO

Staying on top of the race of over-crowded e-commerce ventures is a tussle. Staying on the top of SEO is one of the key solutions to stand out amongst your competitors. Hire a skilled SEO expert who can help you stay afloat for a longer duration.

7. Keep Developing

E-commerce domain has a definite future and no one’s denying that. You should find your way by never stop evolving. Note that, the technological advancements, consumer preferences, trends will be changing; and so, should you to succeed in a variable marketplace!

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