Starting a business is way easier than writing a post on how to start a business! I mean it. That’s why I couldn’t find a single post on how to start a business in Sri Lanka.
Here’s the thing. It’s such a broad topic. There are thousands of angles one can take when tackling a topic like this. I’m not saying I didn’t try. I wanted to write about this for a long time but I got so overwhelmed each time I sat in front of the blank doc. But it’s been too long since I wrote anything so I decided to take a stab at this one.
First, a disclaimer. I’ll be honest with you. By the time you finish this post, you will not know “everything” you need to know about starting a business in Sri Lanka. That’s not possible.
But here’s what you will know.
If you’re clueless as to how you should start, you will find the answer you’re looking for (I said “start.” Nothing else.)
If you feel like you need to understand the bigger picture of starting a business in Sri Lanka, you will get your bigger picture.
If you feel like you need a road map to follow, you’ll find your road map.
If you doubt whether you can pull this off, you’ll get that motivational kick in your butt (you can thank me later!)
If you’re in limbo thinking whether you should start or not, you’ll find your answer (hint: the answer is yes!)
Who am I to talk about starting a business in Sri Lanka?
First I’ll tell you who I’m not.
I’m not the everyday entrepreneur you see on Sri Lankan business magazines. But over the last 4 years, I built two successful small businesses from scratch and currently, they are doing great.
One of them is this website. It started off as a simple blog and now we are in the business of educating Sri Lankans on things that are not taught in schools or universities. I also run an online bookstore called Jumpbooks.lk and we sell non-fiction books that can help you to become a better person. Click here to check out my online bookstore.
When I started my first business, I didn’t have a clue about starting a business in Sri Lanka. Yes, I graduated from the leading management university in the country but I didn’t learn anything about starting and running my business there.
Everything you see on Jump.lk and Jumpbooks.lk, I did it myself and I had to go through a steep learning curve. It took me a while to learn everything but that gave me a practical understanding of how to start a business in Sri Lanka.
And that’s what you’re going to get from this post. When I started, I didn’t know anything. I was just where you’re right now. So I get what you’re going through. I understand that you have a million questions that you don’t have any answers too.
This post is not the answer to all your questions but it will answer the most important ones.
Step 1 – How to come up with a business idea
First, you need a business idea. You should have an idea whether to start a t-shirt business, export cinnamon, build an app, run a restaurant or anything you can do as a business.
I can’t help you here. This is something you have to come up on your own. But I’m not gonna leave you hanging. I’ll share some ground rules which will make your life easier when coming up with a business idea.
Your business idea doesn’t have to be innovative
Here’s a misconception most of us have. We think our business idea has to be so unique that no one else should do it. That’s crazy. There’s a good chance that while you’re thinking of your “unique” idea, someone must be already working on it or thinking about it. There’s no such thing as a unique idea. Stop waiting for a shooting star. Start with a normal star!
It doesn’t matter if someone else is already doing what you want to do
Just because someone else is running online shoe business, it doesn’t mean you can’t do the same. If not, every industry will have just one player and we all will have to buy from them. There will never be new restaurants, new clothing brands or new anything. That’s ridiculous.
We don’t want to start a business that’s already in the market because we feel guilty. We feel like we are stealing business from someone else. But what we don’t see is Sri Lankan market is expanding. There will be more people with more money to buy more things in the future. You don’t have to win at the cost of someone else’s failure. The market is huge. It’s not a zero-sum game anymore.
If you’re thinking of starting a business which is already out there, now you have the answer.
Finding suppliers isn’t difficult
Imagine you want to start your own clothing brand. Do you think every person who’s running a clothing brand manufactures their own items? Yes, some do but most of them source from different suppliers. If you’re thinking how you’re going to find them, stop thinking. Start searching. Google and you shall find (Here is an exercise. Google t-shirt suppliers in Sri Lanka. Do it now. I’ll wait.)
If somebody else has managed to do it, that means there is a way to do it. You just don’t know-how. Once you start digging you’ll find the way.
Importing products isn’t difficult
When I started my online bookstore, I had no idea about importing. I didn’t know the procedure. I didn’t know how to find suppliers. I didn’t know how to make payments. Basically, I didn’t know anything.
Most of us are in doubt because we haven’t figured out the “how.” The moment you know how to do it, you’ll have all the answers. That’s exactly what I did. I started searching for book suppliers in India and I started emailing them. When emails didn’t work, I started calling them. That’s how I found my book suppliers.
In a time where there was no internet, WhatsApp or email, our parents and grandparents started importing products from all over the world. Imagine how difficult it must have been? With what we have today, it’s just a piece of cake to find a supplier from another country and get it down.
Find a problem and solve it
I started Jumpbooks.lk out of frustration because I couldn’t find some of the best non-fiction books in Sri Lankan stores. I decided to solve the problem to myself. I knew that there will always be one customer to buy from me. That customer is me. A business is a solution to an existing problem. If you’re solving a problem in the market with your product or service, that’s good enough.
Figure out what’s missing in your industry. Whenever you think “wouldn’t it be great if there was a product/service for this and that” that’s a business idea. Best businesses solve interesting problems. Find a problem and solve it.
Passion vs. money test
My first ever business was a ladies jewelry business. I realized that ladies jewelry was super cheap in Aliexpress.com and I figured I can resell and make money. So that’s what I did. I ordered a bunch of jewelry and tried selling online. Wanna know what happened? Nobody bought anything from me. Why? Because what I sold was terrible. After all, what did I know about what girls liked? In the end, I “gifted” them to my girlfriend but for this day, I have never seen her wearing any of them!
Just because somebody else is minting money selling something, it doesn’t mean you can also do it and make money. As cliché as it sounds, money shouldn’t be the only factor when considering business ideas.
Try to find a business idea that combines your passion and talents. Even if you’re not passionate now, select something that you will be passionate about in the future. (Reapd How to come up with a business idea in Sri Lanka.)
Step 2 – Validate your business idea
Now you have a business idea. How are you going to know for sure if there will be customers who want to buy your product or service? That’s where idea validation comes in.
Let me give you an example.
I love reading great non-fiction books. But there was one problem. Some of the best books in the world were not available in Sri Lanka. I decided to solve this problem by starting an online non-fiction bookstore. But there was one problem. I didn’t know if there were people like me who were looking for the same books that I wanted to read. I wanted to validate my business idea. So this is what I did.
I created a page on this website (www.jump.lk) and listed a couple of books that I wanted to sell. Did I have any books by then? No. I didn’t have a single book. Then I waited. After a month, I got my first order. Then I ran to one of the local bookstores, got the book and delivered it myself. I made sure that whatever the books I listed are available in local stores. That’s how I validated my business idea.
If you’re struggling to figure out whether there will be customers to buy your products, this is what you should do. You don’t even need a website. Just create a Facebook or Instagram page (this is free) and list your products. You don’t even have to have products. Just grab some product images, decide the price and publish them.
If you get an order from a stranger, that means your business idea is validated. Why a stranger? Because you can’t count your mom’s or your best friend’s order as validation. They might buy out of sympathy or friendship and that’s the last thing you need. But if a stranger is willing to pay you money, that means your idea got potential (Learn 9 simple techniquest to validate your business idea in Sri Lanka. Click here.)
Then you can move to the next step.
Step 3 – How to fund your business
This is the next big question. Whenever I ask a wantrepreneur why they haven’t started a business, the first excuse is “where’s the money?”
Funding is going to be different based on what your business and the product/service you sell. This is something that you have to figure out on your own but I’m not going to leave you in the dark. I’ll share some tips, guidelines and thinking behind funding your business in Sri Lanka.
Don’t overestimate the funds required to start a business
Most think you need millions to start a business. Yes, for certain businesses you need millions to start. I agree. But for everyday businesses, you don’t need that kind of money. To start www.jump.lk, all I spent was Rs.13500. Most of us overestimate the amount needed to start a business.
First, figure out how much you need to start. You’ll be surprised to find that you don’t need a huge amount to “start”.
You see a software company or some export business and wonder how the hell you are going to start a business like that. That’s because you’re comparing someone else’s end to your beginning.
You don’t realize that the software company that has 100 employees today was started by one guy who managed to do some freelance work for an American company. That export company; they started by selling cinnamon to local shops.
Don’t compare yourself with an established business. Most of the time, every company starts really small. Then they expand over the long-term. That’s what you should do. Start small.
Different funding options
There are different ways to fund your business. Below is a small breakdown of what those are. If you want to learn more about them, read our post on How to fund your business in Sri Lanka.
- Bootstrapping – If you’re using your own money to start a business, that’s called bootstrapping. This is my favorite because it’s your money. You’re not responsible for anyone else. That’s going to give you a freedom that you can’t get from any other funding solution. Given the option, I would always select this.
- Borrowing from family and friends – If you don’t have enough money to bootstrap your business, this is the second-best option. As long as your family and friends trust you with their money, you can go with this. But make sure to borrow from people you trust.
- Bank loans – If you’re thinking of getting a business loan from a bank, that’s not gonna happen! To get a business loan from a local bank, you need to first have a registered business and even then it has to be in operation for at least 6 months. That’s the irony of business bank loans in Sri Lanka. You can’t get a business loan to start a business. Here I’m talking about personal loans. If you’re currently employed, you can get a personal bank loan. Talk to your bank and see how much you can get and the interest rate.
- Venture capital and angel investors – Broadly speaking, these are investors who will invest their money for a share of your company. This is the option you should seek if you need millions to start your business. There are so many Sri Lankan companies which have successfully started with VC funding.
You can check out our post on How to fund your business in Sri Lanka to learn more about this.
Step 4 – How to register your business in Sri Lanka
To set up a Facebook page or even to create a website, you don’t need a business registration. You can even start selling products without business registration. But without registering your business, nobody will accept it as a “legal business entity” in Sri Lanka.
What do I mean by that?
Imagine you want a bank account name under your business name. You can’t do that without a business registration. Imagine you want to accept online payments from your customers. You can’t do that without a business registration. Whatever the income you earn will be considered as your personal income. It will not be your business income until it’s registered as a business. You might say it’s a business but in a legal context, no one will accept it as a business. That’s the problem.
So the best thing you should do once you validate your idea is to register it. There are different methods of registering a business in Sri Lanka. I’m going to touch on the two most popular methods.
If you’re going to start a one-man or one-woman business, you can register it as a sole-proprietorship. The registration process is super simple. Go to your provincial secretariat. Get the forms. Fill them and get them certified from your Grama Sevaka officer and hand them over to your provincial secretariat. You’ll have to spend about Rs.3000 as the registration fee and that’s it.
- You can open a bank account name under your business name
- Registration process is simple and cheap
- Any income you earn will be considered as your personal income
- You can’t bring in investors because it’s a one-person business
- In case if your business bankrupts (let’s hope not) you will have to bring in your personal money to pay off for parties your business owe.
This is the most popular method of registering a business in Sri Lanka. Even if you want to start a business on your own or with two or more people, you can choose a private limited. You can do the registration on your own but the best is giving it to a company that does it. Why? Because it’s not as simple as registering a sole-proprietorship. There are so many companies that offer this service at different price points. Market average is about Rs.33,000 but keep in mind that you’ll have to spend at least Rs.50,000 to finish the registration.
- Private limited companies are considered as “legit” businesses
- Limited liability – In case if the company bankrupts, you don’t have to bring in your personal money to pay off to others
- You can bring in investors down the line
- Banks will trust you more when it comes to business loans
- They are scalable. You can bring in more shareholders and directors
- Registration is expensive
What about partnerships?
You can also register your business as a partnership but nobody really recommends this. If there’s going to be more than one in your business, everybody recommends to register it as a private limited. Once you register your business as a private limited, it is a legit business. The duties, responsibilities, and ownership of directors and shareholders are clearly mentioned. A private limited is more legally bounding than a partnership.
If you’re not sure about your business idea, the first thing you should do is forget registering your business and try to validate it using a Facebook or Instagram page. Once you’re sure, you can think of registering your business.
If it’s going to be a fairly small business run mostly by you, register it as a sole-proprietorship. But if there’s going to be more than one person involved, register it as a private limited. Also if you want to build a “proper” business that can be expanded in the future, you have to make it a private limited.
Can you convert your sole-proprietorship to a private limited?
No. You’ll have to register it as a new private limited.
Resources to register your business in Sri Lanka
These are few companies that register businesses in Sri Lanka. We recommend you to do your due dilligence before selecting any of them.
Step 5 – Create a website for your business
You don’t necessarily need a website to run your business. Thousands of Sri Lankans are running their business on social media platforms like Facebook and Instagram. But when you’re on someone else’s field, you’ll have to play by their rules.
Facebook, Instagram and every other platform is not there to help you. Their goal is to make money. Today, you can list your products free of charge on Facebook. What if suddenly they decide to charge for every product you list? These companies change their rules from time to time.
Here’s another problem. Remember when Maithripala Sirisena banned social media? Most small businesses were screwed because they couldn’t sell their products.
When you run your own business, you need to have total control of your business. Your customers should be able to reach out to you directly. That’s why it’s important to have your own website. I’m not saying you shouldn’t sell on Facebook or Instagram. I do that myself. But once you have a website, nobody can f*ck with your business. You will be independent. That’s what you need.
How to create a website
Broadly speaking, there are two ways of creating your website. You can hire a web developer or you can do it on your own.
There are so many website builders out there that require no coding or any technical skills to create a website. I created both my websites (www.jump.lk and www.jumpbooks.lk) using a website builder called WordPress.
Resource to create your website in Sri Lanka
If you want to know how to create your own website, read my post on How to create a .lk domain name website in Sri Lanka. You can also watch my video on How to create a website in Sri Lanka. I basically take you through a real example by creating an actual website. There are more than 100 Sri Lankans who have created their own websites by following these two. Click here to watch the video.
Step 6 – How to market and sell your products
For a long time, I had this notion that all I have to do is list the products and customers will eventually start buying. That never happened! It doesn’t matter how good your product is if the potential customers don’t know you exist. That’s where marketing comes in.
For a long time, I had this notion that all I have to do is list the products and customers will eventually start buying. That never happened! It doesn’t matter how good your product is if the potential customers don’t know you exist. That’s where marketing comes in.
How to market your products
Marketing is a broad subject. If I’m going touch on marketing in this post, you’ll have to sit here staring at least a few more hours. But now that you’re here, it’s not fair to leave you hanging.
Marketing can be divided broadly into traditional marketing and digital marketing. TV, radio, newspapers, magazines, billboards fall under traditional marketing. I’m not going to touch on that. I’ll introduce some basics on digital marketing so that when you finally launch your product, you won’t feel lost. Think of this as a road map you can follow.
Digital marketing basics
Any marketing you do on a digital platform fall into this category. It’s not just Facebook or Instagram marketing. Digital marketing is a lot more nuanced than that. Following are the different branches of digital marketing.
Social media marketing
Anything you do on a social media platform falls into this category. It can be Facebook, Instagram, LinkedIn, Snapchat, YouTube or even WhatsApp.
One of the key elements of succeeding on social media is consistency. You need to at least publish one post every day.
Imagine if you’re on several platforms. Publishing something every day on multiple platforms can become a whole new job. You’ll have no time to focus on your product.
Don’t make the mistake of trying to be on every social media platform when you start. Find 2 or 3 platforms that suit your product and go to town with them.
Social media marketing resources and tools
Hootsuite – If you’re managing multiple social media platforms, this is the Swiss Ninja Knife you’ve been waiting for.
SEO (Search Engine Optimization)
Imagine you want to order 100 cupcakes for a party. What’s the first thing you do? You might go to Google and search “bulk cupcake orders in Sri Lanka.” What happens next is called SEO.
SEO is how you get search results on Google or any other search engine. How does it work? Here’s the dummy explanation. When you add the keyword “bulk cupcake orders in Sri Lanka” in your website, Google will show it as a search result.
Obviously there’s a lot more to SEO but it isn’t difficult. When I started, I didn’t know anything about SEO. But after reading couple of articles and watching some videos, I was able to learn the basics. Go and search “buy sapiens book in Sri Lanka” and see the first result that shows up. You’ll see what I’m saying.
SEO resources and tools
There’s a great website called Backlinko.com. This is where SEO experts go to learn about SEO. Read couple of articles and you’ll understand the basics of SEO.
Most Sri Lankan entrepreneurs think that email marketing is dead. They think Sri Lankans don’t read emails anymore. I believe otherwise. Email is still a very powerful marketing tool.
Think of email marketing as a relationship building tool. You can share different things with your customers and subscribers. You can use it to educate potential customers and help them achieve results with your products and services. There are more than 3500 Sri Lankans reading my weekly email newsletter. That’s how I managed to build Jump.lk to what it is today. You can subscribe to my weekly newsletter here.
Going beyond email newsletters, you can setup automated welcome emails, abandoned cart emails, and automated coupons for subscribers. There are so many things you can do with email.
Email marketing resources and tools
MailChimp – This is the only FREE tool you need to start with Email marketing
Any content that you generate to market your business falls under this. It can be an article you write or a video your produce.
Content marketing complements every digital marketing branch. Imagine you write a post about your product. You can share it on social media. You can share it as an email newsletter. You can create a flyer and share it on Instagram. You can create a video about the article and publish on YouTube.
When you launch your business you can’t just post your product images. That’s not enough. You need to generate useful content around your products and services. That’s how you market. By educating potential customers. Content is also paramount for SEO.
There’s one rule to follow when generating great content. Always think of the user or the customer. Why do you think I wrote this mammoth of a post? I could’ve written the same post with 1000 words but I know that it’s not going to be useful for you. When I write an article, I make sure that it’s the best article on the subject. That’s why most of the posts you find on our website are super lengthy. Because we don’t compromise on the quality of the content.
Content marketing resources and tools
Canva – If you are not a creative person, this is the only FREE tool you need to create awesome logos, flyers, social media posts etc.
NeilPatel.com – My onestop shop for learning anything related to Digital marketing
Have you heard of social media influencers? These are individuals with a large amount of followers. Imagine you sell a healthy juice. If you’re active on Instagram, by now you should know that there are so many fitness influencers. You can partner with them to run a promotion. That’s called relationship marketing.
When you start your business, you don’t have to always be in your little bubble. You can reach out to different individuals and brands that will complement your products and services. You can run promotions and campaigns with them. The key word is win-win. If you can come up with a proposal that is beneficial to you as well as the other party, you can thrive in relationship marketing.
Relationship marketing resources and tools
Step 7 – You got this!
I get it. “You got this” isn’t great business advice but that’s what you need at this stage. The fact that you are reading this can only mean one thing. You want to start your business. So if you doubt whether you should do it or not, now you have your answer.
Starting a business has to do more with courage than anything else. Deciding to follow your gut and start something where there’s no guaranteed success on the other side requires courage. Starting a business is like staring straight into the face of uncertainty and finally saying f*ck it and doing it.
When I started my business, I didn’t even know how I would make money out of it! That’s how naïve I was. I get it. There are million and one unanswered questions at this moment. How am I going to do that? How is that possible? Who’s going to do what? And the list will go on. If you’re here, know that all of us started right here.
Step 7 – Do it!
Can these steps get any vaguer than this?
Here’s the thing. You can’t “learn” how to start a business by reading a book or a post. Yes, you can get an idea about starting a business but to actually learn, you got to do it. There’s no other way.
Once you start your business, you’re going to learn so much that 4 years of university can never teach you. No amount of talking to entrepreneurs, going to networking events, reading stories about others can match what you’ll learn within a month of starting your own business. And that’s the learning I want you to have my friend.
I may not have answered all the questions you have right now. That’s not possible. Not for me or for anyone else. Starting a business is a long journey that evolves over time.
This post isn’t about crossing the finish line. I wrote this to drag you to the start line and maybe give you a kick in the butt so that you’ll start.
Now go and start!
Did you learn something from this post? If you did, don’t forget to add a comment below and gimme some love. Have I missed anything that you think I should add to this post? Comment below and let me know.
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