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Starting A New Venture

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DQI Bureau
New Update

Dreaming of being your own boss,

starting a venture?  Never has the environment been more favorable

for entrepreneurship.

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If there ever was a time to start a

new venture it is NOW. Never before have sectors like the internet,

software, biotechnology or even conventional areas such as retailing

and leisure provided such a myriad of business opportunities. Never

before have venture capitalists, angels and even staid business

houses been so enthusiastic about funding new ventures. Finally,

never before has even the legal and financial environment been more

favorable to entrepreneurship.

First, you need an idea, which can

be transformed into a business proposition and has a potential to

succeed. Ask yourself–Are you able to take a high level of risk,

work long hours, and be able to lower the standard of living that

you and your family have got used to? If the answer is yes, then

there are some further questions–does the business have a market

that is large and likely to grow rapidly in the future? Does it

have the ability to overcome existing or potential competition?

Will your business be able to scale up its operations to meet the

market demand without the burden of money or people?

Planning is critical



If your answer to all the questions is yes, then you have a potentially
feasible business idea. Next, you need a business plan that will

examine the feasibility of the idea. The plan will answer all the

questions that anyone assessing the viability of your project is

likely to ask. This means that it should be able to define the market

for your product or service as well as estimate the revenue or market-share

that you propose to achieve. Then, you need to assess the competition

and other market conditions and determine how you will market your

products or services. This should also address the type of promotion

you will need, the distribution structure and the people that would

be required to achieve it.

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Marketing and finance

guidelines




Marketing is the most crucial element of a new business idea. In
a competitive marketplace, it is very difficult to promote a new

product or service, make the customers interested and have them

purchase it.

You should have the technology, manufacturing

or service capacity. Then, an organization to accomplish it and

broad time schedules to reach certain business goals. Finally, you

need to estimate the money that you will need to achieve all the

above. Along with this you should also be able to forecast the operating

costs that you will incur to deliver these products or services.

Based on this, what you have is a projected profit and loss, cash

flow and balance-sheet of your future business. It may be possible

for you to entirely finance the business– then you would use the

plan primarily to cross-check with people whose business judgement

you trust, to assess its viability. It would also form the program

for action when you actually take the plunge or need to employ senior

executives or induct co-founders.

Here comes the crucial question–would

you prefer to seek external funds from day one or phase your business

in such a way that you can start up with your own capital and then

seek external funding on achievement of certain goals? There are

clearly trade-offs between the two alternatives. When you start

with your own and possibly limited funds, you run the risk of being

undercapitalized to meet the business needs. On the other hand,

if with the limited money you are able to achieve a few successes,

then the external investors may be willing to put a premium on the

investment opportunity. This is a critical decision and the funding

strategy is best discussed with your financial advisors, or friends

who have some experience in the area.

Apart from venture funds, there are

some other sources like your friends, relations and business associates.

This is usually called faith money. Such people have faith in your

abilities and are willing to put up some money even though you don’t

have anything on the ground. There are also some angel investors

who would be willing to back you just on your business plan and

also be able to help you with contacts and advice, which is essential

for a new business. Depending upon the size of your business, you

may also need an external consultant who understands your business

as well as information about venture funds and angel investors who

could invest in your business.





SUSHANTO

MITRA




is the founder of Technology Capital Partners

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