How to Build Your Business from Scratch: A Practical Guide
Hi, my name is Maya, just sharing my experience
Wholesale business from scratch (intermediary model)
I'll tell you very briefly about how you can create a wholesale business from scratch and earn your first serious money.
In general, a wholesale business can help you make good money without even leaving your own home. Starting a wholesale business can make you fast and big money.
The standard scheme by which the wholesale business works is known: due to the fact that you buy goods in bulk, these goods cost you much cheaper. You can then wholesale these items at a higher price. Alternatively, you can sell these products at retail at a much higher price.
You might think that starting a wholesale business will definitely require money, at least for the first batch of goods. And since we buy in bulk, it means that it will take a whole mountain, or maybe several wagons of money. Not! The beauty of a wholesale business is that it can be done with absolutely no start-up capital (apart from minor costs).
To be honest, wholesale is a relatively simple business, its huge advantage is that the success in this business can be completely copied from another wholesale business.
1. Wholesale business is a serious business. Large volumes are involved here, which means a lot of money. But the coolest thing is that the wholesale business scheme is simple for beginners too. Simply, beginners start with small volumes, and when they understand that they are already ready for a big swim (primarily psychologically), they build momentum. A pleasant surprise awaits wholesalers when they realize that in order to get 10 times more money, you need to sell not 1 bag of potatoes, but 10. But the amount of time spent on 1 bag and 10 bags is about the same. So from a beginner, people turn into entrepreneurs with money.
2. When doing wholesale business, you can concentrate entirely on one product or one niche. This is much easier than having to deal with the huge assortment of a retail outlet, for example. The more expertise you have, the better you do.
3. The wholesale business scheme is simple and accessible to everyone, even those who have no experience.
4. Copying a successful wholesale business model is easy enough. All for the same reason - the scheme is simple and transparent.
5. No large initial investment required.
6. Initially, the wholesale business does not require a lot of time, so until you make sure your business is making you money, you can stay in your job without risking anything.
If you want to have an additional source of income and are thinking about where to start a business, one of the first ideas that comes to mind is probably to open a store. New outlets are opening in every city and many of them are really profitable. Learn how to open your store from scratch, step-by-step instructions will help you avoid many newbie mistakes. You can find out more important and relevant information about what you need to open a store and develop your business from the book "Retail: How to Open Your Business from Scratch".
Where to open a store
Marketers believe that two factors are most important for successful trading: the location of the store and the product in demand. Moreover, some experts assure that there are three such circumstances: place, place and place. This is, of course, a joke, but like every joke, there is a significant amount of truth in it.
Indeed, if the location of two stores (each of which sells approximately the same product) is very different, then the buyer will come where it is much closer and more convenient to get to. There is even such a concept - a zone of attraction, i.e. that territory, the inhabitants of which the store can consider as its potential customers.
In large cities, the zones of attraction of shops do not exceed 10 minutes (no more than 1 km) for walking distance and 15 minutes by transport. In residential areas of cities, 30% of the residents living in this 10-minute zone consider as possible buyers. The smaller the settlement or retail outlets, the larger the store's attraction zone. Now, when large chain supermarkets have penetrated almost all cities, outlets “near home” manage to compete with them precisely due to their proximity to customers.
Before you open your business from scratch in a room where there has not yet been a retail outlet, inquire at the local SES and EMERCOM offices about whether it meets the sanitary and hygienic and fire safety requirements (especially stringent for grocery shops). In addition, the opening of a retail outlet requires approval from the local administration. It makes no sense to resolve the issue with the owner of the property or buy a premise if it turns out that it is impossible to create the necessary conditions or obtain permission to open it.
If you are thinking about how to start your business from scratch, but you do not have enough funds to rent a detached building, study the options for premises that the shopping centers offer. As a rule, shopping centers are opened in places of congestion of buyers, in addition, many issues with government agencies have already been resolved, so the administrative barriers are lower here.
What to sell
Unfortunately, choosing exactly which product will be guaranteed to sell and bring a good profit is quite difficult. Even experienced sellers can make the wrong choice, and yet, certain patterns exist here. Here is a list of product categories in descending order of consumer demand:
- Products and necessities (household chemicals, office supplies, hosiery, inexpensive cosmetics, pet food);
- Children's products;
- Clothes and footwear;
- Household goods, electronics and household appliances;
- Furniture, goods for repair, sporting goods, watches, gifts and decorations.
Many aspiring entrepreneurs are wondering what to trade in a small store. In fact, the question is much deeper than it seems - after all, in a shop with an area of a couple of tens of square meters, not any product can be sold profitably, especially if the outlet is located in a residential area, that is, within walking distance. In this article, we will look at the best options for organizing trade in a small area.
The first thing that comes to mind when it comes to starting a retail business is opening a grocery store. And this is a really good option. An area of 20-30 square meters will be more than enough. The initial investment in the purchase of goods and commercial equipment will not exceed seven to eight thousand euros. If you buy used equipment, you can save about a thousand euros. Net profit can reach 1.5-2.5 thousand euros per month, depending on the location of the facility.
Selling children's products can also make great money. Investments will be more than when opening a grocery store, but the profit can be significantly higher. So, in addition to 9-10 thousand dollars of initial investment in goods and trade equipment, it will be necessary to invest another 200-300 dollars in the arrangement of the ramp - many parents will come with strollers. The profitability of such an object is on average about 2.2-2.7 thousand dollars and more.
Every second city dweller maintains pets, so a pet store is a very profitable business that does not require significant investments. The initial investment will not exceed six to seven thousand euros if you buy feed in the middle and lower price segments.
However, keep in mind that many pet owners want their pets to receive the highest quality product. And to make money on this, you will have to increase investments: you will have to invest about one and a half thousand euros in expanding the range of high-quality feed. The profit will be from 1.2 to 2.3 thousand euros. If you establish contact with local manufacturers of pet furniture, you can earn 200-500 euros per month extra.
Draft beer stores generate stable, albeit small, income and require minimal investment. In an area of 30 square meters, you can open a sales point with about 16 taps, that is, you can offer your customers 16 types of beer. Preference should be given to domestic varieties, since they are much cheaper and allow you to make a large mark-up (up to 100 percent), providing a higher profit.
The total investment in the opening of such an establishment will be about four to five thousand dollars. Earnings in this business entirely depend on the season - if in winter the profit is $ 1-1.5 thousand per month, then in the summer the income will be better - up to $ 2-4 thousand per month. It is especially beneficial to open such stores in regions with a warm climate.
It is believed that there are no conditions for self-realization in Russia. But entrepreneurs who work and earn money constantly come across. If you're looking to replicate your success, read on for how to start a business from scratch.
Entrepreneur is not an entrepreneur. Some businessmen are engaged in production, others work in trade, and still others use the Internet to earn money. You can make money in various fields, and people who have achieved success are an example of this.
Step by step action plan
If you want to throw off the shackles of an employee and start a business, step by step instructions will help. With the help of useful tips, you will implement your idea and organize your business from scratch. But you have to work hard.
- Start by looking for an idea. Don't start a project without thinking. At the initial stage, it is important to analyze the market and choose the demanded direction of activity.
- Starting capital. Having decided on the idea, take care of the start-up capital, without which it is problematic to start a business. It is easier to develop with the help of personal money, but it is not always there. Look for an investor. It is better not to take a bank loan for a business from scratch. If the business turns out to be unprofitable, in addition to losses, you will receive debt, and getting out of the financial abyss is problematic.
- Skills, skills and knowledge. You can do without them, but you have to hire people who understand. This is fraught with additional costs, so take the time to research the industry.
- Hypothesis and business plan. Before officially launching a business, be sure to work out the hypothesis. As a result, you will understand how many resources are required to produce the goods, at what price to sell and whether there will be demand. Create a business plan based on the numbers you received. With your hypothesis at your disposal, proceed according to the business plan. Adjust the business in a timely manner to reduce the likelihood of failure.
- Accounting for income and expenses. After starting a business, keep track of costs and revenues, analyze profit and loss. Keep a diary and record important data in order to understand if you are doing everything correctly or if it is possible to change something better.
Each of these stages is important and requires a special approach. At each stage of starting and running a business from scratch, you will be faced with paperwork and permits, the solution of related issues.
How to start a business in a small town
The second part of the article will be devoted to the destruction of the stereotype of people who hold the opinion that it is impossible to do business in small towns. I hope the material will help you start your own business.
Doing business in small towns has advantages and allows you to make money. Commercial activity is profitable in the metropolis, but in this case everything happens under pressure from competitors.
- There are many vacant niches in a small town, which cannot be said about a metropolis. Novice businessmen ignore such settlements and rely on large cities, where there are more people and money. In practice, for certain reasons, it is impossible to cover everything. Even an advertising campaign does not help out, and the delivery of goods is accompanied by difficulties. In provincial towns this is easier.
- In a small town, overhead and organizational costs are lower. We are talking about communications, transport, rental of premises and other nuances. As a result, a novice businessman can develop, which is better than the desire to return the investment. Haste leads to losses and mistakes.
- A small town is more likely to open a long-term business. Since in such regions the competition is lower, the businessman quickly settles in the chosen field and makes the right business structure. At the same time, he is not afraid of the appearance of a competitor with an enviable promotion and an aggressive advertising campaign.
Working in large markets is accompanied by fierce competition and lack of time for rest and development. As for small towns, the local conditions make it possible to strengthen, acquire buyers and find partners. It is not surprising that people working in small markets can buy a car, a house or a vacation abroad in a year.
Where to start speculative agribusiness? As in any commercial business, the grain reseller is the link between farmers and processing enterprises. The question arises why farmers cannot sell grain on their own? The answer is simple: mills need huge volumes, and it is simply unprofitable to contact small farms. This function is taken over by the wholesaler. He buys grain from several dozen private organizations in the summer and accumulates it until the peak of the price - in the spring.
Procurement territories - South and North Caucasian Federal Districts, sales territory - other states and northern regions of the country. The intermediary in this matter is facilitated by the work of many specialized sites, where you can find up-to-date information, prices and buyers.
Of course, before entering the grain resale business, it is worthwhile to study the topic, familiarize yourself with the chemical and physical properties of varieties, storage methods and proper transportation, so as not to get into a mess and not buy low-grade grain.
A step-by-step guide to a grain resale business begins with finding an area. The main asset of the reseller will be a hangar of 1000 square meters. This room can store up to 2021 tons of grain. However, the requirements for long-term storage of grain are quite high:
- The room must be well ventilated.
- The hangar must be kept at a constant temperature and humidity.
- The hangar should be disinfected periodically.
The storage method depends on the type and type of grain. Wheat, rye, barley are stored in bulk. Corn, poppy seeds and elite grain varieties are stored in canvas bags up to 15 rows separately from the embankments. So if you are going to be engaged in the resale of several varieties, separate storage should be taken into account when building a hangar. For survey and design work, for the construction of the foundation and installation, 3.5-4 million rubles should be allocated.
The business idea begins to be implemented at the registration stage. It is important to choose the appropriate organizational and legal form. The best option would be an LLC with a simplified taxation system. This makes it possible to conclude contacts with foreign companies and large Russian organizations. The state duty for registration of an LLC will cost 4,000 rubles. OKVED code corresponds to the selected activity - 46. 1. "Wholesale trade in grain, seeds and animal feed." It is also worth making a seal and opening a bank account. All organizational documents, as well as the conclusion of the necessary contracts for the lease of land, checking ventilation, disinfection will require about 160 thousand rubles.
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