Wednesday, September 15, 2010

Starting a Business with $10,000: What to Do?

Today, I received an email from a reader of this Blog. He is from India and he wanted to know by investing around $10,000 what kind of business should he start? You can easily understand that I am not exactly an expert on this field and it is very difficult and almost impossible for me to give solid advice. I also even do not live in India, but what I am going to do in this entry is to give some food for thought to my reader and to anyone who is thinking of opening a business.
Before anything, you should try to understand some basic things about business. First of all, in any kind of business, there is risk. Of course, if you are successful then you can earn much more money than any job can bring, but at the same time if you are not successful then you can lose almost all of your money. So, I always ask everyone who wants my advice to think of their background. Try to think a lot about what are the skills that you have. For example, I always know that my strongest skill is reading and writing and I will shine in anything related to reading and writing. That is why, I came to Blogging and I am gradually trying to make my ITES or IT enabled Services company successful. If I was not in Blogging then perhaps I would have been in writing field or teaching.
What about you? What is the skill that you think that you can do best? Also another thing to remember is your passion or interest. As for me, I am very lucky that I can be in Blogging and it is related to my passion of writing. I always wanted to be a writer and that is why the hard working part of Blogging most of the time is enjoyable to me.
If you are a fresh graduate and you do not have any particular skill or you didn’t have enough opportunity to get good education like university education then think of taking some kind of training.
If you want to start a shop then best way of understanding about this business is to look at the shops around you. Try to look at the shops that are successful and that are not successful. For example, may be you want to open a food shop or a cloth shop. Try to observe the food shops or cloth shops around you that are doing well and that are not doing well. Try to understand their strength and weakness.
This will help you a lot. If possible then consider working in this kind of a shop even for three months and you will learn a lot. Practical experience is very important. At the same time, try to do some courses on food or clothing. I am sure that nowadays in almost big cities there are some institutes who run courses.
Before taking any big decision of investing the all $10000 why not spend a little amount of money and try to know more about the risk of that business. For example, if you are thinking of opening a food shop then gather all the information about how the materials are supplied. If you can then go to a big market or whole sale market in which you can find the materials that you need when you open a shop. Also go to another market that sells good furniture. You can spend small amount of money for this kind of information but it will be very helpful later.
Again I like to remind you that business means always taking risk and be prepared to take risk. Many people want to go to the share market and these days share market seems to be a very attractive way to earn money. However, I always strongly advice against going to share market because it is full of risks. The reality is that in any country especially in South Asia, most of the people who invest in share market cannot earn good money but only a few of the investors are earning a lot of profit. What happens is that many people just look at to those few 10% or 20% successful investors in the share market and then they blindly jump into this market which is full of risks. In fact, I feel that stock exchange is the most risky business and you should never go there unless you have good knowledge about it.
Unfortunately, South Asia is one of the poorest regions on Earth. Millions of people are educated but unemployed and for men it is even double tragic because men are supposed to get a job or earn money and then they can get married.
So, I definitely understand the pressure of the educated but unemployed people in all the cities of South Asia. However, just don’t rush into something because if you lose your $10,000 savings then you will not get a second chance. Perhaps the best thing for you to do is to invest on this to quality education and work hard and then you can have a brighter future. In this age of out sourcing and knowledge based economy, education is always the safest place to invest. However, most of us do not understand this simple thing and try to take risk into something that we really don’t understand.
Also Read: 10 Steps to Starting a Business

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