Mastering 3 Business Methods, 100,000 Yuan Can Be Used to Start a Business
Author: Source: Internet Update Time: September 16, 2010
A startup capital of 100,000 yuan is not much, and starting a business with this amount can feel quite challenging. However, if entrepreneurs can master three business techniques and possess two essential entrepreneurial concepts, small-scale operations can still achieve great success.
Mastering three business methods, one can start a business with just 100,000 yuan. Since this is considered a small-capital venture, the restrictions will increase due to the lack of funds. However, as long as one can grasp these three business methods, even great enterprises can be built from a modest capital base.
Method One: Professional skills are more important than equipment. With only 100,000 yuan to start a business, it's impossible to spend large sums on purchasing equipment; therefore, entrepreneurs must rely on their professional skills. For example, SOHO (Small Office/Home Office) workers may invest less than 100,000 yuan in equipment by initially purchasing computers, printers, fax machines, and other basic devices to establish a studio. However, SOHO workers must possess personal professional skills such as website construction, animation design, foreign language translation, graphic editing, writing, etc. Only superior professional abilities can satisfy customers and sustain the business over the long term. Entrepreneurs in various talent training programs must also have capabilities in English, mathematics, art, music, or essay writing to attract parents bringing their children for tutoring. Even when opening an online store or a street stall, doing homework on the market should not be overlooked. The total investment in equipment and goods for these industries might cost only 10,000 to 20,000 yuan, but if the entrepreneur remains uninformed about product trends and changes in the commercial district, making money could be very difficult.
Method Two: Appropriate financial management. For those who start a business with only 100,000 yuan, managing finances is a significant skill. If you only have 100,000 yuan, spending 60,000 to 70,000 yuan on purchasing equipment and raw materials would be ideal, while reserving 20,000 to 30,000 yuan as working capital. It’s important to remember that entrepreneurship involves risks. If all the funds are invested in the business without any reserve, facing setbacks could lead to a worse living situation. Many entrepreneurs with insufficient capital consider borrowing from banks. Investment experts suggest that the borrowed amount should not be too high to avoid immense pressure during the startup phase. The self-funded amount and loaned amount should not exceed a ratio of 1:1. This means that if the entrepreneur has saved 100,000 yuan, the maximum loan from the bank should not exceed 100,000 yuan. This way, the entrepreneur will have sufficient funds to use while reducing the burden of debt.
Method Three: Utilize cost-effective marketing techniques. Entrepreneurs starting with only 100,000 yuan cannot afford to spend large amounts on advertisements and promotions. Placing ads in newspapers would add another heavy burden. Therefore, with only 100,000 yuan, one can use some simple marketing techniques that either don’t cost anything or require minimal expense. For instance, entrepreneurs in the talent training industry can distribute homemade flyers to neighbors and parents and post them on community bulletin boards for effective promotion.
Two Concepts for Expanding the Business
After earning profits with a small capital startup, entrepreneurs need to embrace two concepts to expand their business scope.
Concept One: Reinvest profits after earning them. After earning profits, it is best to reinvest in equipment. For example, SOHO workers can purchase more advanced equipment, while street vendors and online shop owners can aim to open physical stores. Mr. Lin, the owner of a pancake house, started with only 40,000 yuan. Gradually, he reinvested his profits into equipment, and now his monthly net profit reaches 16,000 yuan.
Concept Two: Think long-term and aim for sustainable development. Many people who start with 100,000 yuan may initially operate illegally or fail to pay taxes, but these are only temporary phases. Entrepreneurs must look ahead and strive towards legal and large-scale chain operations. For example, opening a kindergarten can evolve into a bilingual kindergarten chain headquarters. In reality, many successful enterprise owners began with less than 100,000 yuan. As long as they operated diligently and worked hard step-by-step, small-scale startups can still achieve great success.
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