How to gather capital for starting your own Instagram/Facebook shop?

Social media has become intrinsic to how businesses establish their presence, build clientele and find new avenues of expansion. For smaller enterprises, social media has been akin to a Midas touch – the world of Facebook, Instagram and WhatsApp have been the conduit for them to find customers in the remotest corners of the world. Be it your neighbourhood bed linen store that has been selling exquisitely embroidered duvets and bed covers to the people in your city since decades or the new chic bakery that has made artisanal breads a household staple, social media has enabled business owners, especially small and medium enterprises to look for opportunities beyond geographical boundaries.In India, social media has enabled many women to fulfill their dreams of starting their own businesses from the comfort of their homes. Gender stereotypes, unsafe work spaces and the lack of support from family members have always been major deterrents for women who have nursed dreams of entrepreneurship. In the pre-internet era, when the idea of running a successful business without having to step out of the house was inconceivable, the path of entrepreneurship seemed like sour grapes to women. However, as the advent of the internet started changing consumption patterns, running businesses from homes became not only feasible but a profitable avenue at that too.Technology has not only enabled women to leverage the reach of social media to make their ingenious business ideas a success, but it has also enabled them to acquire new skills in terms of operating businesses without the crutch of a formal education. With a working knowledge of social media sourcing, delivering and reaching out to people is just a few clicks away. However, despite the many blessings that social media and big tech have to offer, meeting financing demands for running a business continues to be a pain point.A survey conducted by IndiaSpend in 2021 stated, “Almost every woman entrepreneur interviewed by IndiaSpend spoke of hardships in accessing institutional finance. The problems related mostly to social attitudes and bias, difficulty in securing collateral-based loans (most women do not own property), and poor awareness or knowledge of financial schemes including those that provide collateral-free financing.”Shikha Agarwal (name changed), is a 33-year-old who runs an Instagram shop selling floral jewellery for brides. The business has garnered a pan-India client base in the five years of its existence and Agarwal has become a name to reckon with in the wedding accessories space. In the beginning though things were far from rosy, Agarwal reminisces and one of the biggest hurdles she faced was access to finance for setting it up. “When I floated the idea to my husband and family members, they were very supportive. Since the capital requirement wasn’t colossal, I wasn’t too worried about loan availability. However, what followed thereafter was nothing short of a nightmare – banks refused to give me a loan because I didn’t have a collateral then. To my utter dismay, I realised this was pretty common and women entrepreneurs everywhere have to struggle a lot to avail capital from banks,” she narrates.The roadblock forced Agarwal to delay the initiation of her business plans by three years. She tried looking into government financing schemes and realised that even though she would be able to acquire the capital, the process was uncertain and mired in red tape. “While I was trying to avail a loan, I decided to parallel start saving and investing for my business so that in case no doors opened, I could use my personal stash. At that point of time, I had fixed deposits and gold and I gradually started channeling investments into mutual funds. I invested in a carefully chosen mix of ETFs, debt funds and large cap equity funds and in less than three years I was able to accumulate enough to start my business. The SIP route turned out to be a godsend for me because I did not have to wait to accumulate a certain sum to start investing and over the period of three years it helped me reap the benefit of rupee cost averaging,” she narrates.

Aditya Birla Sun Life Mutual Fund has started a special initiative called For Her that focuses on financial inclusion of women and intends to provide them avenues for financial security.

Preeti Zende, founder of Apna Dhan Financial Services says, “Digital technologies have provided numerous options to women today for not just showcasing their talents but also turning them into lucrative businesses. It is a boon for women who have familial responsibilities and cannot sustain a vocation that requires them to be out of home for long hours. You may need a small working capital initially for this which you can manage from your savings if you were previously employed. If you have been a homemaker, you can either get a lumpsum from your husband or your family and park it in a linked FD or liquid fund and then you can liquidate from these whenever you need it for your business.”Zende further explains, “If at first, you need to accumulate capital on your own for the business, then a simple bank FD or a SIP in a liquid or money market fund is a good option. You can also think of going for a SIP in an arbitrage fund. Once your business attains a certain level of stability, you can seek a business loan.”Should you feel overwhelmed by the complexities of starting a business and are looking for a vocation that you can pursue without disturbing your domestic rhythms, you can consider becoming a mutual fund distributor. In that case too you can use the networking powers afforded by social media for running a successful mutual fund distributorship.All you have to do is appear for the National Institute of Securities Markets (NISM) exam for which you can find a plethora of resources for preparation. For instance, Aditya Birla Sun Life AMC Ltd. offers a free online module on MFD readiness programme, which enables users to prepare for the NISM exam and get ready to begin your MFD business. Any person who has attained 18 years of age and passed HSC (12th standard) or is a 10+ 3 diploma holder can attend NISM MFD course and examination.Upon clearing the NISM exam, you can get yourself empanelled with Aditya Birla Sun Life AMC Ltd. and set off on a lucrative path as a mutual fund distributor.Key takeaways- If you are eyeing a bank loan for a small business, pay attention to your credit scores. In case your credit scores are low, spend a few months on improving it and then apply for a loan.- Review your portfolio before starting the business, especially if you are using your personal stash for setting it up. This is to ensure that your personal goals do not get thrown off gear completely for your business and you have enough to sustain yourself during rainy days.- If you have been a homemaker, you can either get a lump sum from your husband or your family and park it in a linked FD or liquid fund and then you can liquidate from these whenever you need it for your business.- If you need to accumulate capital on your own for the business, then a simple bank FD or a SIP in a liquid or money market fund is a good option.This article is part of the HT Friday Finance series published in association with Aditya Birla Sun Life Mutual Fund.