Ranging from transcribing barely legible documents from a doctor’s office to typing out long sequences of numbers for computer programs, data entry has its requirements across all sectors. If you want to test the waters and see what you are getting yourself into, you certainly will have ample opportunities to do so.
Scope and benefits of a data entry business
With India’s progress in the outsourcing sector, this is yet another enterprise that can help you cash in on the boom. But, keep in mind that this is no secret and there are scores of small scale data entry businesses looking to do just what you want to do. So working out a plan to stand out among the rest has to top your set of business plans.
In India, data entry includes a variety of services such as basic data entry, survey entry, data conversion, data processing, online data entry, filing paperwork such as insurance claims online, maintaining a company’s reports and records and much more. Given its importance over the years, the data entry business is a reliable sector, provided you have a good marketing and promotion plan to constantly expand your clientele.
The biggest advantage of a data entry business is its low cost set up. You wouldn’t have to hire employees on a permanent basis either – there are enough freelancers to undertake work depending on your clients’ requirements.
Organizations that outsource data entry services to businesses specialising in the sector save substantially. Consequently, as a cost effective service, it has a lot of takers both locally and globally.
Skills needed to set up
If you are looking to work as a freelancer in the industry and gain some experience before setting up shop, you need to have a few skills handy:
- Excellent typing skills
- Ability to turn long hand and short hand documents into error free computer files
- Relevant software experience depending on the sector you specialise in
- Good reading skills
- Schedule efficiently
- Manage a host of freelance data entry experts
- Bring in business
- Coordinate with clients
- Adhere to the stipulated timeframe
- Have excellent computer skills
What do you need to set up?
A data entry business can be quite easily run from home. However, if you are sure about your venture and hope to undertake a lot of technical projects, it’s best to set up a base. You may need the space to train your employees occasionally on the use of new software or to even meet clients for presentations. But expand as you grow. Aim to get many clients as quick as possible
So part of your startup, capital has to be invested in hiring or leasing an office, furniture, infrastructure, computers, training equipment, any data entry software you may require, and other miscellaneous items.
Whether you opt to work out of home or set up a place of business, you’ll also need a marketing strategy in place to attract clients. If you have the expertise to create a website and reach out to them, you’ll do well for yourself. Alternatively, a consultant can also help you setup and reach out to potential clients.
Many data entry firms demand an initial investment from their freelancers. But, talk of any such initial investment is likely to send good candidates scurrying away from your website. Such offers are usually construed to be from unscrupulous employers. So be sure to offer straight forward opportunities that reflect well on you as an employer.
Type of business set up
When it comes to type of business set up, you can opt for any of the three – sole proprietorship, partnership or private limited company.
A sole proprietorship has almost become a thing of the past, as most low investment businesses that require skill and efficient management are started in partnership or as a private firm. Teaming up spares you of the ‘unlimited liability’ clause in sole proprietorship, which means that in the event of bankruptcy, the Indian government does not differentiate between your assets and those of your business while dissolving it.
You can also explore your options as a sole proprietor with limited liability. The paperwork and procedures are similar to those of a sole proprietor, but the liabilities are weighed out against those of your business assets and do not include your personal assets.
In a partnership, depending on an individual’s investment in the business, the profits and losses are divided amongst the partners in a set ratio. In a private limited set up, the company is treated as a separate entity and your liability stays away from your personal assets.
The legal framework of your business is very important as it contributes towards your operations, tax deductions and repayment of debts. Therefore, it has to be well thought out, especially when you are going into business with others.
The formalities involved here are the same as with any other registered business. The process of registering a business has been fairly simplified and it can be done online. Along with the registration, a few other things to do would include:
- Acquiring a Director Identification Number (DIN) which can also be done online
- Obtaining a digital signature from the same portal
- Getting your business documents stamped at an authorized bank or at the Superintendent’s office
- Obtaining a Certificate of Incorporation from the Registrar of Companies (ROC) with the stamped documents and registration fee
- Obtaining a seal for the company if you wish to go public with its shares at any time for expansion
- Obtaining a PAN (Permanent Account Number) card for paying taxes
- Obtaining a TAN (Tax Account Number) card for income taxes that are deducted at source
- Registering your company at the Office of the Inspector
- Registering for profession tax
- Registering with the Employee’s Provident Fund organisation
What do you need to become operational?
As discussed earlier, your operational needs depend largely on your investment and the kind of set up you opt for. A homed based operation requires predictably a lot less capital and investment than setting up private offices.
Investment and funding for most start up businesses and freelance businesses is not the easiest thing to come by. Banks need to see assets registered under your business or you should continue to juggle your job and your business, showing your salary as an income for the loan. Since it will be next to impossible to hold down a job and run a data entry business, a safer bet is to work out of home and avoid business loans till you start seeing substantial profits to warrant expansion.
Attracting clients and promoting your business
Experts suggest that if you want to start out as a low investment business, it would be better to offer parallel services to make sure your business is making profits or at least breaking even to begin with. For example, you can offer to carry out surveys and collate data for businesses looking to compile customer information.
Designing a customer friendly website and making sure customers find their way to you from common platforms like Facebook and Twitter should come next. Your website is pretty much your portfolio, so keep it well updated. References are a great way to sell your services too. So consider having a testimonial section in your website penned by clients. You are more likely to attract customers through your website and online presence as it is typically where most companies begin their search.
Also, be active on Social Media. Work out where your customers are. Make sure your LinkedIn profile is complete and uses keywords such as “Data Entry Services” etc. Also build a company page for your service. Do the same on Facebook – get a business page set up to promote your business.
Try services like www.odesk.com as they can bring you a lot of work. To learn more about oDesk read our in-depth article here.
Challenges and difficulties to overcome
Competition is probably the biggest hurdle to overcome when it comes to data entry business. Since data entry requires little skill, impressing your clients lies in the variety of services you offer and the accuracy of your data. Any inconsistency in the data provided, arising from the simplest mistakes, can cost you dearly despite the work you’ve put in.
Securing your data too takes precedence as most of your clients are likely to entrust you with private information and findings. Finding the right people for the job, using a secure network and storing this information in a reliable digital platform are few things to plan out well ahead. Many data entry businesses stick to online data entry, which means the information is fed into a network and it stays there secured by passwords, allowing your clients to access them directly as well. Again, it is a wide field and some of the content could be technical which calls for experienced persons for the job.
You will need to rely on sound financial planning as many businesses lose money when they start expanding. It gets more difficult to predict your expenses when you begin to grow, so charting out your business’ financial needs and adhering to it is quite important.
On the other hand, if you are constantly neck deep in book keeping and financial planning, it is likely to take away from planning your workflow and executing it effectively. It would be best to invest in reliable software to help maintain your books or hire a professional to keep abreast of your finances. Apart from maintaining your books and bank accounts, some financial planners can offer additional services like cash flow forecasts or even negotiating on your behalf for better terms of credit.
Comparing your progress with that of your competitors is not the easiest thing to do. But you should know where you stand and understand why you are losing out on business. Matching up to the competition is probably the easiest way to stay ahead in the market.
Data entry business plan
Charting out a business plan is often the best way to face the realities of running a successful business. Apart from projecting revenues and losses for the next few years, it also helps you understand the demands of your business over the same period. It encourages you to analyze the market keenly, understand the needs of your business and target potential clients. Your business plan will make you question and probe every avenue possible: the most promising industry to specialize in – legal documentation, medical coding or simply collating customer information for telecommunication. You can even learn more about your competition before you get started, allowing you to set realistic targets and goals.
Building a business plan also means working out a thrifty financial plan for your start up business. This includes finding business loans with the most economic interest rates and recruiting wisely and not extensively.
Despite drawing up a business plan, it may not be easy to accurately predict your revenue for the first couple of years since it entirely depends on bringing in clients and choosing the right projects.
Small Business Software
Finally, get a free account with Zoostr to help you manage your new business more effectiviely. Its free to use and allows you to create price quotations, invoices, and meeting notes, as well as sending out bulk SMS messages and scheduling meetings. Register for your free account here.