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    With an economy that continues to grow at a promising and blistering rate, coupled with favourable demographical shifts and suitable policies and regulation, India is riding high on the startup wave.

     

    But unfortunately, 90% of the startup enterprises fail within the first five years (1). Therefore, it is also very important that startup business enterprises get off on the right foot. This article will attempt to reiterate the basic fundamentals of setting up a business.

    Need / Problem Identification

    The very idea of creating a product or service emanates from the fact that people have unfulfilled needs or unsolved problems; a gap between what is required and what is available. The first consideration in floating a business idea is to reason or figure out whether there is a need or a problem that needs to be addressed and if the answers lie in creating a specific product or a service.

    Core product or service

    The second consideration is envisioning or developing the concept of a product or service that could fulfil the identified needs or solve the specific problems. This gives rise to the idea of the core product. An entrepreneur must grab a clear understanding of this core product / service. The core product constitutes the primary benefits or the problems solved by usage or consumption of the product or service.

    Some pertinent questions, requiring very specific and comprehensive answers, could be –

    • What is the primary purpose of the product?
    • What basic needs will be fulfilled by using the product?
    • What problems will be solved by using the product?
    • How, when and where will the customers use the product?
    • What are the requirements for using the product?

    USP or Unique Value

    Markets are competitive everywhere. If a startup enterprise has to make an impactful and long-lasting mark, it has to create an USP or some unique or premium value to its customers through its offering. Creative advertisements can help garner some attention for a while but it is short-lived. Moreover, promotional campaigns are not always economical. An USP or unique value can be created not just through the product but also through pricing, channels of distribution and elements of retail management like merchandising and shopping experience. A unique brand positioning will be fruitful in the long run only when it is consistently maintained and competitively defended. You can consider availing startup consulting services to identify your USP and see whether it is aligned with the market needs or not.

    Customers and Market Segment

    An idea of a product or a service is conceived with an implied understanding and preliminary requirement that there are potential customers. In order to effectively and efficiently market a product, knowledge and understanding of customers and customer behaviour is crucial. The first step in this direction is the identification of the customers through market segmentation. Markets can be segmented on various grounds like geographic, demographic, geo-demographic, behavioural etc. Market segmentation helps businesses distinguish their customers from people in general based on shared features and characteristics. The selection of the right market segmentation strategy can help businesses identify and target the right market segment(s). Other important considerations are the total size of the market for the product or service and size of the targeted market segment. Professional startup advisors will help you in customer identification and market segmentation.

    Value-Chain

    After the product concept is defined and customer segments have been identified, the next step is figuring out how the product or service will be created and how it will reach the customers – the value chain process. The value chain not only includes processes which add value to the product or its inputs but also include activities and operations through which this value is sustained and maintained. This is the value that has to be delivered through the channels to the customers for their usage or consumption.

    Competition

    Competition in the targeted market segment can be perceived as a deterrent and also as an indication of the presence of a favourable business environment. However, it is important to assess the level of existing competition (both direct and indirect) in the targeted market segment. In the last two decades, the nature of competition has undergone significant changes. Products (in any category) are increasingly becoming homogenous. The focus of competition has shifted to services, quality, branding and promotion, technology and channels. The presence of intense competition does not leave much room for quick growth and expansion unless the startup comes with a really strong and hard to imitate USP.

    Capital, ROI and Break-even

    Not many private and institutional investors are willing to put their money into startup business ideas and projects fearing loss of investment. Most of the startup enterprises are self-funded combined with borrowed informal loans from family and friends. Angel investors are rare. Every startup should have an investor presentation (startup business plan) ready all the time.

    After capital sourcing, the next important financial consideration is whether the business will generate a healthy ROI to repay the liabilities and create surpluses. How soon a startup can achieve its break-even is something of great relevance to potential investors.

    Once a startup has got its basics right at its infancy, it provides the enterprise with the vision, the guiding principles and the roadmap to devise business strategies and carry out business operations. These basics can help a startup realize the reason for its existence and provide a sense of purpose and direction throughout its life cycle. The significance of the forming stages of a startup enterprise often makes entrepreneurs turn to startup business consultants for professional expertise and guidance. Entrepreneurs can gain relevant business insights from the professionals of startup business consulting.

    Stay tuned with our blogs, as there is more to come in “Part-II”

    Sources/References:
     (1) Business Insider

      To know more about “New Creative Ideas” get in touch with our Retail Experts on [email protected]


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    Author Bio

    Rupal Agarwal

    Chief Strategy Officer

    Get Advice to Starting a New Business

      PROCESS AUTOMATION

      The idea of having Ecommerce Consultants on-board from the beginning itself points towards reducing the involvement of the promoters in daily operations. Ecommerce Businesses willing to be a brand reaping profits & sustaining the competition must ensure that most of their processes should be automated. The more the manual intervention, the more would be the errors.

      In Ecommerce business, you get only 1 chance to impress the customer & if you mess up there, you lose the customer for long.

      Process automation in respect to all the activities pertaining to customers from order receiving to order fulfilment is a must for a seamless experience for the customers.

      Task Management is another grey area where most deadlines fail as 90% of the tasks are assigned manually & are forgotten, unheard, misunderstood or mistaken.

      YRC Team of Ecommerce Management Consultants helps to make maximum of the processes system-driven to ensure minimalistic manual intervention.

      VIDEOGRAPHY & PHOTOGRAPHY

      No matter how good your product is, the customer would know only if it looks good.

      Photography includes the following steps:

      • Cataloguing your products
      • Cataloguing your images
      • Backup your images (A few cloud storage solutions include Dropbox, Google Drive, Bitcasa, Apple’s Cloud Storage etc.)
      • Choose the right camera & lens (You may also outsource the photography to a third party agency)

      DIGITAL MARKETING

      Digital Marketing includes SEO & SMM. SEO i.e. Search Engine Optimization includes activities like back-linking, meta tags, blog-writing etc. to ensure your website ranks on the 1st page on Google Search.

      Next comes SMM i.e. “Social Media Marketing” which as the name suggests including promoting your products on all the social media sites, email marketing, influencer marketing & several other BTL activities.

      These activities are going to be recurring & would decide the traffic on the website, the conversions, whether the right target market is tapped, the likes, the views, the orders, the reviews & much more. YRCs Ecommerce Consultants create a budget for digital marketing right from pre-launch to launch & for each month thereafter.

      Building digital marketing strategies in coordination with the agency, selecting them to signing them off would be the role of YRC.

      This ensures seamless coordination, detailed interactions & desired execution as it is always advisable to work with a single agency than multiple of them.

      IT INTEGRATION

      Selection of the right software for smooth functioning of back-end operations right from production to webstore display would be suggested and integrated by YRC Team.

      YRC’s Team defines SOPs of Product Movement, maps it with the locations & people. They then create a blueprint of all the features required in the software & help in shortlisting & selection.

      IT Integration involves connecting your offline inventories with real-time online webstore so when a sale occurs, inventories get deducted real time across offline as well as online platforms.

      This helps in accurate inventory management, maintaining the MOQs, re-order levels & achieving the optimum inventory levels.

      Some popular software include unicommerce, viniculum for your front-end website management & Genisys for your entire back-end Purchase, Production, Accounting, Invoicing etc. management.

      WAREHOUSE & LOGISTICS PLANNING

      • How many cities or countries you wish to sell in?
      • Where should your Warehouse be located?
      • Should you have one warehouse in each country or city?
      • Should you be having your own delivery team in your base city?
      • Would the 3rd party vendors be reliable? What happens when they lose or misplace your product during delivery?
      • How should I manage the logistics if my goods are coming from different countries?
      • How should the goods be stored and barcoded?
      • How much space do I require for warehouse?
      • I am sure several such questions must be haunting you while you think of starting your own fashion ecommerce brand.

       

      At YRC, our warehousing and logistics experts can help you devise a strategy for all of the above mentioned queries and much more.

      We design the layout of the Warehouse considering the inward, goods processing, software entry, barcoding, outward, goods return, scrap storage, goods stacking & much more.

      Logistics route plan is devised considering the manufacturer to your warehouse and from there to last mile delivery locations.

      UI & UX DESIGNING

      This Step involves 03 distinct parts:

      Part 1: Choosing the right Platform:

      From several platforms available in the market right from Shopify to magento, woocommerce, prestoshop, wordpress etc. you must choose the one that fits best for your business

      Part 2: UX Designing:

      “UX” denotes User Experience, which if put in simple language is building the functional requirements of the website.

      UX Designing includes designing the features required in the website, customer journey map, website features, the browsing features, navigation features, ecommerce order management process flow, checkout cart features, catalogue management, ecommerce payment system, cross selling features & much more.

      “As per statistics, 68% of the customers abandon the carts before payment”

      An interesting UX ensures the customer sticks on to the website for a longer time.

      Part 3: UI Designing:

      UI stands for User Interface, which means designing the look and feel of the website. UI includes using the right colours, elements and the entire aesthetics of the website.

      A good User Interface ensures the user completes the task that he has come for. It navigates the user through the journey of the brand in the simplest but most effective way.

      The UX designer maps out the bare bones of the user journey; the UI designer then fills it in with visual and interactive elements.

      If User experience is the bare bone, user interface wraps it up with an attractive cape.

      At YRC, our team if experts can help you develop the entire User Journey to ensure it is engaging!

      SAMPLING & PRODUCTION

      This step follows the “Designing” Phase, whether you have an in-house design team, freelance designers or an outsourced design company. It is one of the most exciting phases, as here you see your designs turning into products & your ideas turning into reality.

      In most start-up cases, production is outsourced i.e. brands tie-up with the established manufacturers/ job-workers to get their products manufactured.

      Sampling involves multiple 04 Stages, Fit-Sample, Prototype Sample, Pre-Production Sample & the Production Sample.

      Prototype Sample is the first sample provided to the buyer. It can be in any fabric/ colour. This sample is just to understand whether the product design looks equally great in reality.

      Fit Sample, as the name suggests is prepared to check the fit of the garment i.e. the various sizes, length, width etc.

      Pre-production is made by the actual production line. Here the stitching quality and other aspects related to manufacturing are checked. This is the last stage where rejection can be accepted.

      Production Sample is made before the production which is the replica of what is going to be finally produced.

      Once you are through with all this, you are good to go ahead & get your goods manufactured.

      PRODUCT DESIGNING / SOURCING

      Product Designing or Sourcing is the heart of the Ecommerce Fashion Brand.

      Product Designing / Sourcing can be done in several ways, as follows:

      • In-house Design Team
      • Freelance Designers
      • Outsourced Design Team
      • Ready Product Sourcing (From Manufacturer or Wholesaler)

      At YRC, we evaluate your business strategy & business model to arrive at the decision, which of the above ways would be best-fit for your business. In certain cases, product sourcing may be a combination of the above.

      These are the people who are going to build your brand! Whether they are the designers or merchandiser, your brand look is going to be in their hands.

      If you are designing each garment from the scratch, the sourcing would play crucial role in developing design identity of your brand.

      Sourcing includes fabric, trims, lining & all the raw material required to build the garment.

      BRANDING

      Branding is the “Look of the Brand”, right from logo to tagline, the colours used, the brand story, the brand communications on social media, the packaging & all the other aspects which speak directly or indirectly to the customers. Branding constitutes the look & feel of the brand & hence must be thoughtfully planned to match with the product that we are selling.

      Branding must appeal to our target audience. Example : A golden colour logo depicting finesse, art, richness, premium, however beautiful it may be individually cannot go with a brand selling affordable kids wear products. So, your logo must be in-line with your brand positioning, whether you are an expensive brand or a luxury brand or a value for money brand, it must be depicted from your “Branding”.

      It is an integral part to attract the target audience.

      ORGANOGRAMS & SOP’s

      Organogram is the “HR Blueprint” of the business which is created at the onset, to map out the team required across each function at various stages of the business. At the launch, only key people need to be got on board to ensure the project gets started & at this stage, all of them need to multi-task. Similarly, certain financial as well as operational goals are set for addition of the further team. Example, for the operations team, we hire 1 operations manager during the pre-launch phase & we add 1 more only when the business kicks-off & we reach a volume of selling more than 1000 pcs/ month or a turnover of more than 0.1 million USD.

      SOPs are Standard Operating Procedures, a bible to run the entire organization right from Sales, Purchase, HR, Order receiving to Order fulfilment, Inventory Management, Accounts, Warehouse, Logistics, Supply Chain, Production & all the other relevant functions for the business. Business must be organized from its first day of operations; only then the tasks can be delegated.

      At YRC, we design the organization structure, the processes, and approximate time taken to execute each process, job profile of every member within the organization, their KRAs, KPIs & the Reporting Structure.

      CRITICAL PATHWAY

      Critical Pathway Analysis (CPA), is a project management technique which cannot be overlooked while launching an ecommerce fashion brand. Brand launch process is cumbersome with multiple inter-dependent & time-bound tasks involved, which need to be tracked to ensure the project remains on track.

      CPA outlines key tasks across the project, their turnaround time (TAT) & the dependencies of tasks upon each other. It identifies the sequence of tasks, their interdependent steps from inception to completion, their criticalities, and their dates of onset, target dates of completion along with the key responsible person for the respective activities. Critical Pathway helps in understanding the unimportant & not urgent tasks which may jeopardize the execution of the project because of an unexpected snag! It also maps out the potential bottlenecks which might be posed because of the dependencies of tasks upon each other & cases where the next task cannot be commenced before the completion of the previous one.

      CPA detects the minimum & the maximum time involvement of a particular individual or team to execute the task, thereby arriving at the overall deadlines associated with the project.

      At Your Retail Coach, we design the Critical Pathway & review it periodically to ensure the project is on track & the progress is measurable.

      BUSINESS STRATEGY & BUSINESS PLAN

      Business Strategy includes the vision, mission, goals, business model, business plan & strategy for all the functions within the organization.

      Business Strategy is a well-defined plan that outlines who, what, where, why, how & when for the company; for example, who would be the target market, how to attract the target audience, when to launch new products, where to operate from, how to handle competitors, what would be the USP, what would be long term goal of the organization & several other answers to the 5Ws of Strategy.

      Business Strategy aligns the organization towards a common goal. Business SWOT helps company to identify & overcome their weaknesses & focus to sharpen the strengths. Business strategy forecasts future risks and helps business in building skillsets to overcome the potential threats.

      YRC’s Business Plan focuses on creating a “Blueprint” of the business, thereby deriving the feasibility of the concept & gauge whether the opportunity is lucrative to invest time, energy & effort. Business Plan creates cash flow understanding i.e. building inflow & outflow cash projections from Week zero to week 60 i.e. 05 year projection. Business Plan calculates the capital investment, operating costs, one-time costs, recurring costs & all the other numbers relevant to obtain the breakeven sales, return on investment, return on capital, internal rate of return & several other ratios. Business Plan is also one of the important requirements if you are targeting the “Investor Route”. Fund raising becomes extremely transparent & channelized. With business plan panned out clearly, the business will know until what point must it be stretched & where to stop, which reduces the probability of unplanned investments.

      MARKET RESEARCH

      Starting the concept of Ecommerce Fashion brand with Market Research ensures we get detailed understanding of the industry & this research report also acts as a social confirmation for your concept. Market Research helps in understanding the target locations, their population, potential online buyers for your product, competitors for each category, and top selling products of the competitors, competitors’ price range, offers & their responses & much more. Market Research helps in thorough understanding of your brand position as compared to our competitors. It helps in identifying gaps in the market, in your category along with the scope of the said product in the desired market. This will help in validation of your concept & prevents you from making the same mistakes as your fellow brands, eventually saving your time, energy & efforts. This phase is also a make or a break phase, as the market research study may at-times come up with some eye-popping numbers & statistics which might compel you to re-think on your product or category that you are planning to sell or alter your entire concept itself!! Market Research Reports analyse the competitors’ webstore for their traffic, conversion & sales. This is extremely valuable information to derive our inventory budgets & projections, which takes us to our next phase.