Thursday, August 16, 2018

Entrepreneurs & Startups - The Secret Economy Boosters

A recent conversation with my best friend, who's starting her new business, made me realize a very important thing. The message she conveyed, totally changed my thought process and made me realize some of the things I may have been  probably doing wrong all along. I'm quite sure, that you might be equally guilty of this action at some point in your life. What could possibly be such an incorrect action that you haven't realized so far? Read on...



Source : https://ecowarriorprincess.net/wp-content/uploads/2016/12/Local-Matters-Why-I-Buy-Local-Eat-Local-Support-Local.jpeg

Before we get to the actual problem, let's get a sense of the ground situation here. In any given market, the attraction, trust & eagerness to buy newly a launched Branded product and Celebrity owned/endorsed products is always pretty high. We proudly share the purchase immediately in social media and even list outs its advantages,. Despite a steep retail price (compared to a domestic/in-house brand) we do not think twice before buying it either because i) we can afford it or ii) we want to look cool iii) you just love the brand so much or iv) you may actually "need" the specific product. Absolutely nothing wrong about any of the four points though, because who doesn't love to indulge in a bit of luxury.

But in addition to it, you can also do one small thing.

Encourage and Support a friend's Business !

This could be a relative, friend or even a FB acquaintance who has started their own business .  The first thing you can do to encourage them is by buying their product. This could be anything from a book, a handmade artifact, handmade soap / homemade skin solution or even visiting their cafe/restaurant. A purchase from the friends circle alone can make a significant difference in their confidence, morality and pushes them to work harder . This allows them an opportunity to bring down costs and get more quality products at the same price, while also enabling them to grow their business.


Source : https://stampington.com/blog/wp-content/uploads/2016/09/20150826_SoapParty_019.jpg

Having been given free samples and products during initial launch phases by top brands, we expect the same from our friend's startups too. Even if its a small product worth say 100Rs, we expect them to give us for free. The bigger brands with deeper pockets can splurge on such activities to expand their market base, but on the contrary it can incur significant losses to small businesses.

Criticism Helps, but don't Bargain ! 

In the rare event that you dislike the product or if it causes any adverse effects, do let them know in private about it (than raising a hue & cry in FB directly about why something didn't work). Any serious entrepreneur would take that negative comment / criticism only as a feedback to make his products better than taking it in a wrong way. It actually helps him more to understand where he might be going wrong and places to improve.

However having said that, the amount of doubts, hesitation and questioning the price point is pretty undesirable. Despite knowing its being sold for very small margins, a lot of us end up bargaining/hassle with these startups and literally force them to sell at zero profit situation. An extra few bucks may not really affect us a lot. But that little extra multiplied by a higher volume can make a real difference to that business.


The Cost of Labour

When we enquire a product's price, all we calculate is its worth of ingredients along with a small margin. We then magically come to a conclusion that its "costly" or "average price". However what we don't take into account is the time taken to make the product, cost of labelling, packaging, expensive instruments needed to manufacture the same, electricity among other things.. More importantly, we forget that there's a "labour" component to this costing. It's very wrong to ignore labour cost or rather assume labour as 0 just because the person who made it herself sells it. The technical skill needed to make any product or even write a book should be rewarded and quite handsomely as well!

Why do we need to do it & why is this important?

Most people are confined to a desk job working from 9-6 for the rest of their lives. They never aspire to do something new or take up their favourite hobby as a profession. There are very few people around you, who actually have the guts and courage to take a risk, leave a stable/high paying job and start their own business. It could be a reseller business, it could be a soap making business or even a person who wants to take up blogging full time ( be it in Travel or fashion). Nevertheless, the motive is the same. Build something wonderful from scratch, become an entrepreneur and be a successful one at it.

Impact of startups/SME's on Economy

 The top brands may contribute a large to the economy & GDP by employing several thousand workers in each firm. But these startups and SME's also play a vital part to the economy. They create a healthy market environment, find unexplored niches and in some cases produce both nature and people friendly products. Every big company in the world including HP, Apple, Microsoft, Facebook etc started out from a garage or a dorm room. They now result in controlling 70-80% of the market share in their respective industries. Just Imagine contributing to a startup's success and watch it grow multifold in a few years time . This results in three things : More contribution to the economy, growth of new market spaces and of course creation of jobs.

Spread the Love

Supporting a new business is not just about buying their stuff. It could also be in the form of subscribing to one's social media page, sharing/liking their posts , leaving valuable comments and of course spread a word about their products to your network.

So next time , along with your usual list of products, additionally pick up that beautiful handmade soap your friend made, a book your friend wrote or a jewellery / saree /clothes your friend is reselling. It will make a whole lot of difference to them.

Featured : Products made/written by my friends 

From my end, any of my friends & readers who would like their product / book / service to be featured, let me know the same in your comments.. The post here will be updated with the relevant links below.

This post is a small dedication/tribute to my best friend, Deepika who's taking up her passion of making organic, handmade skincare solutions as a full fledged successful business. This includes beautiful handmade soaps, face & body pack/powder , herbal oils among other things. (Social media links to be updated soon).
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