Start Mobile Business in Pakistan Now (Very Easy Method)

If you have been searching internet on how to launch mobile business in Pakistan, well meri jan 😉 you have come to the right page!

Jokes apart!

I have already shared some really kick-ass business ideas for Pakistani market (check this link) that will definitely help you in finding the right business idea you have always wanted or at least when you read that article you will know how different businesses are run in Pakistan from franchises to distributions to wholesales, retails so on and so forth, so do read that article.

Note: Present January 2017, One gram gold value equals to 4817 Pakistani rupees, since gold value remains stable while currency value fluctuate thus we see hike/dip in gold price, therefore I will provide estimate of each business ideas in gold too, which will make estimates of this article valid even 100 years from now.

Coming back to mobile business in Pakistan, mobile business is doing great, the niche has reached what business gurus would call market maturity stage but that doesn’t mean there are no opportunities in it anymore.

In fact there are tremendous opportunities, all you need is healthy investment and some super cool management.

Here are some facts about mobile users in Pakistan from PTA
Total mobile users as of Dec-2016:  136,489,014
Total 3G/4G users: 37,574,396
According to Consumer Technology Association smartphones average life span is 4.7 years.

Considering the above facts, with over 13 caror mobile users in Pakistan with over 3 caror being 3G/4G users, meaning having high end phones & considering the average life span of a smartphone of 4.7 years, you can easily see that the market for mobile phones in Pakistan is huge!!! Like really really HUGE!!!!!!!

Okay, I am calming down now, coming to the article. In this article I am going to discuss just mobile retail business in Pakistan and in the next one I will be discussing wholesale mobile business.

What you will learn from this article:

1. You will learn practically how to launch such business
2. You will learn practically how to manage the whole thing
3. You will learn about return on investment (ROI) in this business
4. You will learn about other important aspects that are essential for running this business model type.

Remember: If you want to successfully launch mobile business then you have to read this article completely, without skimming, without being sleepy, if you get sleepy or bored or anything, just do some stupid facebook or something and get back to it with a hot cup of coffee!

So let’s start with the launching part.

Launching Retail Mobile Business in Pakistan

When it comes to launching, the first, most important thing that you need to do is to at least spend one month (although 6 months will be great) with those who are already running such business.

This will not only help you to understand all the tricks of the trades but will give quite a healthy insight of the whole trade itself, from suppliers to stocking, to which mobile brands are doing well and which ones aren’t, what is the actual target market, how the sales process works, what policies like return policies, warranties etc are involved etc.

Once you get all these insights, you will then be in a better position to launch business.

Now before going for the management part I want to share few important things or facts about this business.

Consider the following facts that I have collected after surveying over 50 mobile retailers. It is likely that you may not understand certain terms, phrases in the Key Facts mentioned below, don’t worry, I will explain all of them along with management part after mentioning the facts, you just need to read them, daro mat jigger! 😉

MOBILE RETAIL BUSINESS KEY FACTS:

Initial Investment: Minimum 5 Lakh (103 grams of gold) – Optimum 15-20 Lakh (310 to 415 grams of gold)

Return on Investment (ROI): 10-25%

Monthly Total Cost: 20-25K Pkr (4 grams of gold)

Sales Peak Time: Eid days, From March till June, From September till December

Peak Time Sales: 10-20K (2-4 grams of gold) daily on average

Sales Low Time: Ramadhan, From December till February

Low Time Sales: 5-10K Pkr daily on average

Best Time to launch: Launch in Market Low Time so that you fully prepare for peak time!

Human Resource Required: At least 2 guys with one being the owner and the other being the sales guy, even though an owner alone can manage it, make sure you don't end up on internet in mobile shop theft videos though, lol.

Required Experience: The sales guy must have at least 1.5 years of sales experience in mobile phones while the owner should at least have the overall know-how of the business.

Human Resource Compensation: The sales guy can be paid 6K Pkr (1.24 grams of gold) at minimum, optimum is 12-15K Pkr (3 grams of gold) .

Any Government Regulations: Yes, while selling the phone you are required to keep the id card copy of the customer, although this rule is not applied in all cases.

Main Suppliers: Your main suppliers should be from the nearest major city although you can buy stuff in bulk from Lahore, Karachi etc

Suppliers Return Policy: In case of defective item or any other item related issues most suppliers provide 2-4 business days to return the item while if you have good relationship with the suppliers, having high trust, this period can be extended up to one week at maximum.

Suppliers Payment Policy: For new mobiles business it is mostly hard cash while for old businesses it is credit plus cash.

Suppliers Bonus, Sales Promotions: No such things are offered by suppliers, there is always fixed price, which may fluctuate according to innovation, tech  improvement with time.

Competition: High

Break-even Achievement: 1.5 years for minimum investment; 5 years for optimum investment, although various other factors can reduce or increase the duration of achieving break-even increase in sales, market competition etc.

Essential Things Necessary For Running This Business Effectively:

1. Level of Investment, the more the better
2. Business Location
3. Service Quality
4. Sales staff & Owner character
5. Relationships with suppliers
6. Competitive Pricing
7. Outlet branding

Explanation of Key Facts & Business Management

Initial Investment

Initial investment means the money you must invest in order to launch this business, 5 lakh (103 grams of gold) is the minimum you will be required to invest to launch this business, it is likely that you will buy phones for 4 Lakh (85 grams of gold) while paying the rest for renting, outlet furniture etc.

If you are starting with minimum then you should spend at least 4-6 months with those who are in this business so that you know which phones brands you should invest in, yeh bhout zarori he, qk apky pas ghalti ki koi gunjaissh nai he!

Starting with minimum investment means business growth will take far much longer compared to starting with optimum investment, in both cases the more you know about the business, market, in demand brands the better!

Return On Investment (ROI)

Although in most cases your ROI will be around 10-15% but with passage of time and investment, once you have increased customers flow it is likely that you will sell brands or specific smart phones that will offer better ROI.

ROI here varies from phone to phone, in some smart phones you will earn 10%, in others 12% while many others 17%-20% etc so you really can’t point out the exact ROI.

ROI also increases when sales are healthy, for instance if you invest 100 rupees three times while earning 50 rupees in profit each time that means you earn 50% in profit, so it all depends on how many times you reinvest money in a given time.

The faster the money recovery & reinvestment cycle the more the ROI and vice versa and such situation can also help you in reducing break-even duration or lengthening it.

Monthly Total Cost

Monthly total cost depends on various things like how many sales guys you have, how much money you take from the business for your personal use, what other variable costs are etc.

If there are two guys with one being you and you are not taking any money from your business for first six months then your monthly cost will be 15K-25K (3 to 5 grams of gold), given that rent is 6-10K(1 to 2 grams of gold), utility bills are 3K (half gram of gold), salary of the sales guy is 7-8K (2 grams of gold), other expenses are 1-2K (half a gram of gold).

Sales Peak Time

Sales peak time means when the sales are high ? Well in this business case sales are high in eid days, in months of March till June and from September till December.

Peak Time Sales

Means how much in sales you can potentially have in those months, the amount is from 10-20K Pkr per day on average.

Remember: It is not necessary that you will always make 10-20K Pkr per day in sales peak time, for instance if you have invested in brands with no market value, demand; then it is likely that you won’t be able to sell and so lower sales even in peak time.

Or for instance you have hired incapable sales guy again you won't be making any healthy sales even in peak time.

Similarly if you are in market with very intense competition or having a poor location, it is likely that you will be having lower sales even in sales peak months, because of the location, intense competition.

Likewise if you are selling only low end smart phones brands then it is likely that your sales will be poor, far lower than mentioned here because of low end phones brands.

Your sales can also be higher than what is mentioned in peak time average sales, for instance if you have invested quite big money, so obviously then your daily sales will be higher then what is mentioned in this article.

So you need to remember that many factors play vital role in improving or decreasing sales.

Sales Low Time

Means months in which sales are at their low, sales drop in months of Ramadan, from December till end of February and from June till end of August.

Low Time Sales

You will be making 5-10K Pkr per day in sales.

Remember: That it is not necessary that you will always make 5-10K Pkr per day in sales low time, for instance if you have invested around 20 lakh then undoubtedly your sales even in low time will be higher than the amount mentioned here, simply because of investment.

Similarly if you are in market with very little competition or having a superb location, it is likely that you will be having healthy sales even in sales low time months, because of the location.

Likewise if you are selling only high end Samsung & Apple smart phones then it is likely that your sales will be healthy, better than mentioned here because of high end phones from world renowned brands.

So you need to remember that many factors play vital role in improving or diminishing sales.

Human Resource Required

Although couple of guys can effectively run a small smart phone retail outlet still if you think you can’t afford yourself to be on the outlet for one reason or another then you will need somebody else to do the job and so your cost will increase and with that also the risk of losing money due to poor customer service on part of your representative or he simply stealing away your phones or money! Or both 😆

Haatho ki saphai ka andaysha hota he!

So you really need to be there or at-least you need to keep daily check on the sales, cash flows, inventory, stock in hand etc so that you know where things are heading and what you need to do about it.

Required Experience:

Yep Jigger, experience bht zarori hey (yep, experience is really important), especially for the sales guys, sales guys are basically the backbone of your business, the more experienced they are the better.

As more sales experience means more sales and thus more profits, so hire experienced guys when it comes to sales, although there is a likelihood that you won’t get really experienced guys to work for your new business simply because you can’t afford them, if that is the case then read this article Startup hiring tips: How to hire really experienced sales guys.

Essential Things Necessary For Running This Business Effectively:

Jitna gurr dalo gay uthnaa meetha hoga, so yeah level of investment matters, the more the better.

Coming to business location, that is really important, make sure that your outlet is in well-known location easily identified and accessed by the customers.

By well-Known location I mean, location well-known among your target buyers, customers, for instance Lahore ki food street food k le famous he while Peshawar namak mandi is famous for mutton thikkay and medicine etc.

Medicine se yaad ayah, medicine business in Pakistan has tremendous ROI (almost 50%), check this article medicine business if you want to invest in medicine business.

Importance of character, behavior in success of any business is obvious!

While the more solid relationship you have with your suppliers the more easily you will be able to get relax terms and conditions, which is something you should always aim for, because at times you would need certain items but you won’t have money but good relationships will be the only thing helping you then.

And if you offer your items at better prices, terms and conditions than the rest of your competitors then it will definitely result in better sales consequently healthy, improved ROI.

While since there is intense competition in this niche, you will need to differentiate your business, your brand, outlet from the rest and the only way to do that is to do effective advertising and effective branding, do check out these articles.

That’s it, now if you want a detailed step by step approach to managing each and every aspect of your small business, from finance to marketing to hr etc then read this article, Starting Business From Scratch!

Lastly don’t forget to subscribe to this kick-ass website of mine for more practical, no BS tips, ideas on startups, marketing, small business blah blah!

And yeah do share this article link with your facebook, twitter friends, followers, that's the least I am hoping from you guys 😊😉!