Profit is not something to add on at the end. It is something to plan in the beginning.
The success of a small business depends on its ability to continually earn profits. Profits equal revenues minus expenses. Earning a profit is important to a small business because profitability impacts the growth of its business. Businesses cannot run without earning a profit. A business owner must understand the importance of profitability in business management and develop strategies that give his venture the best chance at remaining profitable.
We, as the young entrepreneurs of ECO THREADS left no stone unturned and unraveled the mantra to success and profitability. Here are few ways that aided us in attaining success in our business venture.
Step 1: Find product(s) for the business
Don’t find customers for your products. Find products for your customers
A business can’t flourish using guess work. In order to succeed one has to be confident about the customer’s tastes and preferences. Keeping this in mind, we held a few sessions with our potential customers (parents of the students of our school) to gain an insight into their preferences and needs and at the same time we conducted a survey in our neighborhood to be more certain about our venture.
Our customers were our strongest supporting pillars in creating our business by assisting us in finalizing our ideal products as they would cater to huge demands.
SESSIONS BEING HELD WITH OUR POTENTIAL CUSTOMERS
Step 2: Identify the buyer
People do not buy goods and services, they buy relations, stories and magic.
Our business involves recycling of old clothes into new products such as cushion covers, table mats and a variety of bags. First thing to be kept in mind while establishing a business is to identify the customer base or the target market as we will be producing goods that are being demanded by them.Since our school has a strength of 2891 students, we already had a well identified customer base in the form of parents of our students for our business. We were in constant touch with our customers through various social media sites( ‘Eco Threads Facebook page, school Facebook page) which made us retain a healthy personal relationship as well as helped us keep them updated with our latest products and events that were to take place. The routinely sessions that we had with them also played a pivotal role in building everlasting relationships with our customers.
Screen Shots of our posts in Eco Threads Facebook Page
Link to our Eco Threads Page :
Step 3: Pre-selling our products
Since our customers are marketing geniuses, we conducted a “pre-sale” of our products to know the market price that should be quoted for our products. A few team members pre-sold a few products in their area and received an overwhelming response. It helped us to quote the right price for our products and at the same time created an awareness about our products in the neighboring areas of our students.
Step 4: Raising funds
Big things often have small beginnings.
Funding is the fuel on which a business runs. It makes possible the smooth design, production and marketing of a product; and it keeps the administrative functions efficient.
We were able to raise a fund of Rs 15000 in 20 days through crowd funding. We rewarded everyone who helped us with the funds by gifting finished products from our first stock.
This money helped us immensely and the process of manufacturing was done with great rapidity.
After manufacturing came packaging. We packaged our products in such a fashion that our customers would not have to think twice before buying them.. Our packaging department took about two hours to give finishing touches and packing the products.
VIDEO SHOWING STUDENTS RAISING FUNDS THROUGH CROWD FUNDING
Students involved in segregating old clothes, manufacturing and packaging
Products ready for our first sale
Step 5: Launching our business
Our launch event was held on 29th July 2017 in the school premises. We had a huge footfall and gained profits. This launch event helped us gain insight as to what we should manufacture more to match the increasing demands. Since potli and slings bags were a huge hit with our customers, we doubled the manufacturing of bags for our next selling event.
Our next sale on 28th October 2017 was done on a bigger scale with more products to offer to match customer demands. This time our success reached even greater heights as we had an insight into the requirements.
We were always in touch with our customers through our Facebook page ECO THREADS. We kept them updated about different activities taking place from collection of raw material to marketing. They became a huge part of the ECO THREADS family and wished for it to be an enormous success.
Our launch event : 29 July 2017
Our second selling event : 28 October 2017
The more we share, the more we have.
Since our business is generating a good amount of profit, the next task for us was to decide how we are going to make the optimum use of it.Therefore, keeping our motto “Concern for the 3 Ps- People, Profit and Planet” in mind, we split the profit 4 ways.
1. Out of the profits, 25% will be ploughed back. They will be the retained earnings which will be further reinvested into our business.
2. 25% will be given to our manufacturers i.e., the parents of EWS category, who helped us in making the products.
3. For the upliftment of the EWS category students, we used another 25% of our profits for providing them with stationary products, school uniforms, etc.
4. Since our school always extends its support to NGOs, 25% of our profits will be donated to the two NGOs that we are associated with.
Planning is bringing the future into the present so that you can do something about it now.
Planning is the key to any business throughout its existence. Every successful business periodically reviews its business plan to ensure it continues to meet its need. It’s sensible to review current performance on a regular basis and identify the most likely strategies for growth. For expansion and diversification of our venture we planned the following:
- Launching new products was essential. We have decided to bring out an entirely new range of merchandise like table cloths, runners , aprons and sofa covers.
- We have also decided to hold a sale outside the school premises so that we can further expand our market and generate more and more profit.
- Since social networking sites like Facebook proved to be a boon to our venture, we will come out with a personalized advertisement to get more people on board.
- With customers spending more than Rs 800 on our products, we will have a super buyer contest where the highest spender will get a reward in the form of our products.
- We will also conduct a selling event wherein we will sell the merchandise at discounted prices.
We would like to conclude by saying that this venture is not only teaching us various entrepreneurial skills like marketing, customer relationship management, manufacturing, accounting etc. for our business but also helping us learn a gamut of attributes such as team work and cooperation, strategic thinking and basic administrative skills, perseverance etc. which are constantly helping us in our day to day life. We are all very grateful to the School Enterprise Challenge Team for providing us with such a big platform.
To give real service, you must add something which cannot be bought with money, and that is sincerity and integrity.
ECO THREADS TEAM
SMSJP, NEW DELHI, INDIA