Tag: Entrepreneurial Finance

Top Finance Business Ideas in India: Best Small Finance & Startup Ideas for 2025

If we go on to trace the crux of our living in modern times, we must always end up discovering finance. The Cambridge Dictionary defines finance as (the management of) a supply of money.

We must all have heard of finances since time immemorial, but many of us are often confused regarding what the term implies. To demystify, finance is a term used to define the matters associated with the creation, management, and study of money and investments. Starting a business in finance sector requires strong market knowledge, regulatory compliance, and a strategic growth plan. A major part of finance focuses on the ways an individual, an organization, or the government earns money or, as we say, how they manage and spend it. Financial service business ideas require careful planning, legal compliance, and a deep understanding of the market and customer needs.

We will talk about finance here in this StartupTalky article. We’ll learn what finance is and how to build a financial business. And What are the categories of finance? Here are 57 best finance-related business ideas to begin with. Furthermore, we will also discuss the amazing business opportunities in finance.

Short Record of Finance
How to Build a Financial Business?
Things to Keep in Mind Before Starting a Finance Business (2025)
Best Finance Business Ideas [Infographic]
57 Finance-related Business Ideas [In detail]

Short Record of Finance

There is sufficient information to testify to the fact that finance is as old as our existence on Earth. The term “finance” originally emerged from finer, which meant “to settle a debt.” This word was absorbed in the late Middle English and came to be known as “finance.” Along with standing as a word, finance also sums up the department of economics. Revolving around money, the significance of the word has grown over time, much like money itself, which is now used to signify an educational domain of greater significance, looked up to by the entire world.

The financial sector of India is wide and expanding at a relatively fast pace, both in terms of the growth that the existing firms are witnessing and the establishment of the new entities that are entering the market. The vast financial sector of the country is inclusive of but not limited to commercial banks, insurance companies, non-banking financial companies, co-operatives, pension funds, mutual funds, and other smaller financial entities.

The banking sector comprises a major portion of the Indian financial industry. Banks account for possessing more than 64% of the total assets of the country’s financial system. Though the Indian finance sector has suffered a setback due to the coronavirus pandemic, followed by the nationwide lockdown in 2020, it is otherwise a very prolific sector, which is showing a promising comeback with the help of startups and other businesses.

Types of Finance

In today’s world, finance can be divided into two major categories:

Public finance
Private finance

Public Finance

Public finance deals with the revenue and expenditures of the country. It can only be defined as the study of the role of the government in the economy. Furthermore, public finance can also be used to signify the study of the branch of economics that assesses the government revenue and expenditure of the public authorities. Public finance can be prominently divided into the following: Public Expenditure, Public Revenue, Public Debt, Financial Administration, and Federal Finance.

Private Finance

Private finance is associated with income, expenditure, borrowing, and the administration of finances of private companies and individuals. Though both the public and private finances are similar, they are way different from each other when the operational aspects are considered. Private finance is again classified into two sub-finances: Personal Finance & Business Finance.

Personal Finance – Personal finance is a term used to denote the finance or the financial management that is limited to an individual or a family, hence personal. Personal finance defines the income, budget, and savings, along with the financial risks and future life events of an individual or within a family. It can also mean the optimization of finances by an individual or a group of them in a family.
Business Finance – Business finance deals with the finance and the management of it when in a company. Business finance denotes the funds availed by business owners or entrepreneurs to establish and manage the operation of their companies.

How to Build a Financial Business?

There are many regions where you can receive some revenue. A noticeable one and the centerpiece of this statement is home loans. But of course, you will learn very fascinating things when you realize more about the soft-governed super funds and their significance. That’s an extremely sensational region that you might just suppose getting implicated in specializing. All of our homeland clients, primarily Neverland, are for car loans. Some of the business people bargain with tool financing, retail loans, manufacturer’s pubs, and so on personal lending explanations for when the bank sees we retain a huge database of a personal lender, security service commodities, and other commodities. The financial industry in India works in a complex way. There are many financial sector business ideas like loan advisory, tax services, and investment planning that are ideal for new entrepreneurs.

You will be utilizing cutting-edge software called Symmetry, and it will show you all the delinquent stuff. You just meet this business and do not possess the ability to do everything like computers. These days, real-time comparisons, i.e. the lender-to-lender comparison, client evidence, occupy the application forms, etc. You will like it when you receive it through this region of the business.

Home loans

We’re discussing home loans especially, and look, it’s a vanilla bread and butter industry, yet we’re glimpsing that some sixty thousand home loans every month are written around India. A dealer is relying on which lender you eventually labour with. Home loans are an important aspect of the financial industry in India.

You can receive an upfront committee to print a loan of around half percent of the loan percentage. So, in a regular four hundred thousand dollar loan, that loan would reimburse you around 2000 to 12000 for a normal loan.

In addition to that, you’re also capable of the trailing committee from most lenders. The trailing committee is about 0.15 percent per annum on the extraordinary balance, meaning for this very similar home loan, that’s around five to six hundred dollars a year, primarily paid monthly, so around forty to fifty dollars per month. For the life of the loan, be it 22 years, it doesn’t issue. This financial business idea depends upon the trust as the dealer is completely relying on the lender.

People will often want cash

People will constantly want wealth, and why not from you? Believe me about this. You’re getting on to be requesting the same banks that they eventually maybe belong to choose anyhow. The similar taxes, if not adequate, are completely free assistance where you can correlate the entire marketplace using cutting-edge software. You can easily enter the financial industry in India. This is an easy financial business idea to start your career with, but it has very little stability.

Create Your Business With Referrals

One of the vastly outstanding and authentic techniques of enticing clients, joining with clients, and marketing with clients is through referrals. Referrals come from friendships you build with some like-minded or business partners. Real estate dealers, real estate sellers, and accountants are an entire range.

Most commerce people and website holders can link producers of industry owners. Most want to expend extra cascades of revenue if they can. Understand this thing. What would it be if you lived to offer 50% of your upfront commission as encouragement for a supporter to lend entry to customers? Feel about that for a moment.

I mean, would you receive any takers? 50% is unheard of, and huge people in the enterprise would say oh, I don’t spend anything for referrals because I just assisted them in making the contract, and that’s all valid.

I’m saying I will plant that germ for you; not everyone will bring you up on that. Understanding this, how do you want to create a nice personal practice for yourself? How many real estate sellers in all countries do you want to associate with you and drive to you?

The customers that they’re swapping buildings and anyway you are going to earn cash. However, of the alternate treaty, you appear to be able to protect all the cases. We never lend that away always. So that’s your industry, so it commands you 50% of your upfront. How are you, however, building an elegant trial book?

Use public domains

Another path of evolving your industry is just through public realms. Domain.com is a real property site. I’m sure you have been there. They composed their connection for open examination. You can maintain it at any time. You can go directly and have an open glance for inspection. What is your region of choice is accessible to look at today, this week, or next week? There are dozens of them. The dealer’s name in the lecture is often of the properties.

Realestate.com

It’s similar to the above website. So they’re readily available for what’s on-demand, what’s occurring, and if they’re bought no house at a time, the consumer wants money. What I’m going to recommend to you is that one of the easier things that we could ready you to achieve is just also some of these open houses, of course, with the committee of the seller or the agency dealing with the open for inquiry.

Just to give out a few industry cards on in which you’re telling, look I’ve got thirty pots and lenders. Then alone I could enable you upon one, hey somebody even says look lend me your pamphlets, and I will put them second to the enrollment table.

You go to the following clear home and put your handouts there, too, so you can make twice as much of your time. Some real quotations, not all of them, but a little bit of glimpse at some of their friendships are right. Might whisper to you, hey, look, I will provide you with a bit of window. You can sign up there, and we will put a banner or a little thing on a medal on each of the ads.

They might even let you allocate commerce inside of the new journal that’s being allocated from the front of the store. Also, it is inside the shop dispense for your booklets on the counter. They might even put the flyers inside the post-outs.

They, however, have to physically post owners, tenants, and why their receipts declarations. Why aren’t the emails already getting on our people’s evidence back in there? There is some belief about this. Some smart entrepreneurial boutique category ones might even say hey, overhear, why don’t we begin a finance division inside the company?

And we will co-brand. I will provide the guides, all the open cottages, and everything. Let’s create the finance industry and pull that off; you will be right for existence rather than what you are. Almost explain just that I know of have entry to a subscription, essentially RP data. If you are not aware of RP data, please visit RP.com.

Things to Keep in Mind Before Starting a Finance Business (2025)

Starting a finance business can be rewarding, but it’s not as easy as selling products or running a regular store. It comes with laws, licenses, and risks.

Here are a few things to think about before you dive in:

1. Do Proper Research

Before starting, learn everything about the finance service you’re planning.

Check if the business idea has growth potential.
Find out what risks are involved.
Look at competitors – what they offer, how they advertise, and how they reach customers.
Study their websites and services to see what works.

2. Follow Rules & Laws

Every state has its own rules for finance businesses.

Some require a special business license before you can start.
Visit your state’s government website or talk to the local finance office to get correct info.

3. Get the Right License

You’ll need legal permission depending on the services you offer:

If you’re dealing in stocks, mutual funds, or bonds → Get an investment license.
If you’re giving legal advice → You’ll need a law license.
Always check what licenses are required before offering services.

4. Make a Simple Business Plan

A business plan helps you stay focused.
It should include:

What services you’ll offer
Who your customers are
Start-up costs
How you’ll promote and grow your business
This plan will guide you as your business grows.

5. Decide What Services to Offer

Make a list of your services and fees.

Different services can have different charges.
Be clear and upfront with customers.

Example:
If a client gives you INR 8,00,000 to manage, and you charge 3% yearly, you’ll earn INR 24,000/year from that one client.

Ask Experts for Advice

Talk to experienced people in the finance industry.
They can help you understand hidden risks and give you tips to avoid mistakes.

Best Finance Business Ideas [Infographic]

57 Finance-related Business Ideas [In detail]

No.	Business Idea	Description	Target Audience	Potential Revenue Model
1	Micro-finance Bank	Provide small loans to underserved communities	Low-income individuals, rural clients	Interest on loans, service fees
2	Finance Consulting Firm	Offer expert financial advice and planning	Businesses, startups, individuals	Consulting fees, retainer contracts
3	Allowance Consultant	Help clients manage budgets and allowances	Families, individuals	Fixed fees or hourly rates
4	Mutual Funds Investment Agency	Assist clients in mutual fund investments	Retail investors	Commission on funds invested
5	Gold Loan Company	Provide loans against gold collateral	Individuals needing quick credit	Interest on loans
6	Fundraising Consultants	Help startups and NGOs raise capital	Startups, NGOs	Success fees or retainer
7	Private Finance Blogs	Create finance content for education	General public, students	Ad revenue, sponsorships
8	Insurance Agency	Sell insurance policies	Individuals, families, businesses	Commission on policies sold
9	Retail Loan Brokerage Company	Connect borrowers with lenders	Individual loan seekers	Commission from lenders
10	Business for Deal Broking	Facilitate financial deals & partnerships	Corporates, investors	Commission on deals
11	Forex Trading	Trading foreign currencies for profit	Traders, investors	Trading profits, spreads
12	Debt Collection Agent	Collect overdue debts for clients	Businesses, banks	Percentage of collected amount
13	Tariff Consulting	Advise on pricing strategies & tariffs	Companies, utilities	Consulting fees
14	Angel Investment Company’	Invest in early-stage startups	High net worth individuals	Equity stake, returns on investment
15	Audit Firm	Perform financial audits	Companies, government agencies	Audit fees
16	Commercial Bank	Provide banking services	General public, businesses	Interest margin, fees
17	Freelance Bookkeeping	Manage financial records	Small businesses, freelancers	Hourly or monthly fees
18	Stock Broking	Facilitate buying/selling of stocks	Retail and institutional investors	Brokerage fees
19	Tax Consulting	Provide tax planning & filing services	Individuals, businesses	Consulting and filing fees
20	VC Firm	Invest in startups with growth potential	Startups, investors	Equity returns
21	Mortgage Bank	Offer home loans & mortgages	Homebuyers	Interest income
22	Finance-related Coaching	Provide finance education and training	Students, professionals	Course fees
23	Finance-related Podcast	Create finance-related audio content	General public	Sponsorships, ads
24	Finance-related Books	Publish finance educational books	Students, professionals	Book sales
25	Finance Magazine	Publish finance news and insights	Investors, professionals	Ads, subscriptions
26	Credit Repair Business	Help clients improve credit scores	Individuals with poor credit	Service fees
27	Investment Management Firm	Manage client investment portfolios	High net worth clients	Management fees
28	Build Investment Tools/Products	Develop financial software/tools	Investors, firms	Licensing, subscriptions
29	Start ATM installation & Maintenance Company	Install & service ATMs	Banks, retail outlets	Installation & maintenance fees
30	Supply of POS Machines	Provide point-of-sale machines	Retailers, merchants	Sales and rental fees
31	Risk Management Consultant	Advise on financial risk reduction	Corporates, investors	Consulting fees
32	Credit & Thrift Business	Offer saving & loan products	Individuals, small businesses	Interest, fees
33	Commodities Trader	Trade commodities like gold, oil	Traders, investors	Trading profits
34	P2P Lending	Connect borrowers with lenders online	Borrowers, retail lenders	Commission, interest margin
35	Real Estate Appraiser	Value properties for sales or loans	Buyers, banks	Appraisal fees
36	Crowdfunding Solutions	Facilitate funding via online platforms	Startups, creatives	Commission on funds raised
37	Bill Reminder App	App to remind users of bills due	General public	Ads, premium features
38	Crypto Exchange Platform	Platform for trading cryptocurrencies	Crypto traders	Transaction fees
39	Build Regtech App	Software for regulatory compliance	Financial firms	Licensing fees
40	Bureau the change	Micro-donations rounding up payments	Consumers, retailers	Service fees
41	Online Payment Service Platform	Digital payment gateway services	Merchants, consumers	Transaction fees
42	Business Subsidy and Grant Consulting	Help businesses get subsidies & grants	SMEs, startups	Consulting fees
43	Franchise Consulting	Guide businesses on franchising	Business owners	Consulting fees
44	Budgeting Service	Help clients manage finances	Individuals, families	Subscription or hourly fees
45	Online Finance Courses	Teach finance online	Students, professionals	Course fees
46	Start a Community Bank	Local banking services	Local communities	Interest, fees
47	Start an Investment Club	Group investment opportunities	Small investors	Membership fees
48	Start a Debt Collection Business	Collect debts for clients	Businesses, banks	Percentage of collections
49	Start a Hedge Fund	Manage pooled investment funds	Accredited investors	Management & performance fees
50	Become a Financial Advisor to Retirees	Guide retirees on finances	Retired individuals	Consulting fees
51	Robo-Advisors	Automated investment advice	Retail investors	Subscription or asset fees
52	Green Finance Solutions	Finance eco-friendly projects	Environmental projects	Interest, fees
53	Fintech App Development	Build finance-related apps	Financial firms, startups	Development fees
54	Debt Counseling and Consolidation Service	Help clients manage & consolidate debt	Individuals in debt	Service fees
55	Mobile Notary and Financial Document Service	Notarize and manage finance docs	Individuals, businesses	Service fees
56	Digital Payment Service	Enable digital payments	Merchants, consumers	Transaction fees
57	Blockchain-based Payment System	Secure payment processing using blockchain	Financial firms, merchants	Licensing and transaction fees

There are enormous Financial business ideas in this sector, following which you can start your own financial business. We will glimpse some of them here. The impressions can be begun by imploring enterprise capability. The Financial Industry in India is possibly the biggest industrial area under the sky. This is an enterprise that doesn’t stress a particular educational knowledge in most trials but rather offers reasonable information and a little knowledge above the content. The financial industry business is lucrative.

Just like launching any other business, establishing a financial business needs a considerable amount of passion and determination, along with a game-changing idea. Here are some foundational ideas that can help you start your business associated with finance:

Micro-finance Bank

Micro-finance banks, as the name suggests, are banks or financial services offered to those who belong to low-income groups. Microfinance business ideas are one of the best options that might work well if you are looking for some finance business ideas. Furthermore, the microfinance niche needs less capital than the banking sector and is blessed with tons of opportunities to grow. Besides, it would also be a great help for the people who are desperately in need of money and are otherwise deprived of it by banks or financial institutions.

Finance Consulting Firm

Financial advisors are often one of the most important persons who are looked up to by everyone, including both small and large companies and other individuals. Though you must indeed have a good deal of knowledge about finances and how to manage it on both small and large scales, establishing a finance consulting firm does not really need a lump sum and can easily stand as a promising finance startup idea.

Allowance Consultant

Allowance can be defined as a permissible amount of money that is allowed to an employee of a company. These allowances add up to the salary to define the total value of a person’s salary.

Dearness allowance, entertainment allowance, overtime allowance, city compensatory allowance, interim allowance, project allowance, and tiffin/meals allowance are some of the common allowances that are added to the salary. Handling all of these allowances and bringing improvements to them seems to be an uphill task for any company. This is why they tend to hire allowance consultants to deal with their finances and allowances. You can also look up allowance consultants to know all that you need to be a candidate fit for such a role.

Mutual Funds Investment Agency

Mutual Funds - Best Finance Business Ideas — Mutual Funds – Best Finance Business Ideas

Mutual funds are not a new concept, in fact, the oldest mutual funds still exist in the form of Vanguard Wellington Fund, which was established in 1929. The first modern mutual fund, however, was launched in the U.S. even before that in 1924.

Over the passage of time, with the growth of companies, the demand for mutual funds investment has only witnessed a rise all across the world. This is what makes a mutual funds investment agency one of the best finance startup ideas of now.

Gold Loan Company

The value of money is increasing day by day, and with it is increasing the value of other precious metals and stones like gold, silver, diamond, sapphire, ruby, and more. Furthermore, the recurrent financial crises and the outbreak of the pandemic further added to the woes, shooting the value of gold and other metals sky-high. Among all the metals, the rise in gold prices is the most conspicuous because gold is the most important metal that everybody loves to possess.

However, the rising prices would definitely benefit those who already possess gold or the gold loan companies who can profit highly from the metal and its limitless potential. Gold loan companies are, thus, considered to be one of the safest investments that one can be involved in looking at today’s markets.

Fundraising Consultants

With the increase in the number of companies, fundraising is becoming something more than a daily affair. Though bootstrapping always remains another option if fundraising happens to be out of limits, it’s neither safe nor the best option for startups. However, with the emergence of angel investors and other capital investors that scrutinize each request wisely and extend their capital resources to startups and other budding companies, raising funds happens to be simply within our limits.

Nowadays, companies can opt to raise funds, but weighing their requirements for the funds can sometimes be exceedingly hectic, and they might require experts for it. This is where fundraising consultants come into play. These consultants help the companies identify their requirements and raise just enough funds effortlessly. You can also be one such consultant if you want to be a part of the financial services businesses where you can also utilize your own financial skills and gain exposure along with a fitting income.

Private Finance Blogs

If you are interested in finance and finance-related subjects and have an itch to express things clearly for your audiences, then you can choose to write private finance blogs at your leisure, and this might simply develop to become your profession. A flair for writing is something that will serve as a bonus, which you need to develop as you go! It is considered one of the most profitable small finance business ideas for beginners.

Insurance Agency

We are always at risk of losing our lives, and money, damaging our cars, falling ill, and more. Being insured is something that we can opt for to keep our peace somewhat intact. This has been easier than ever with the emergence of insurance agencies that help us find the best plans for our home, car, health insurance, and more, with which we can insure almost anything without worries.

An insurance agency offers a satisfying sense of security that people never want to miss out on. Building an insurance agency that is trustworthy and reinforced with the best insurance plans possible at affordable prices is a foolproof financial business idea that would not fail to grow to the highest heights. To get started with a finance-based insurance business, have a look at these Best insurance franchise businesses in India.

Retail Loan Brokerage Company

In the time we are living, loans are one of the primary requisites that we must avail to fulfill even our basic needs. Not every one of us possesses the capital that we need to cope with the fast-paced world of now. Nonetheless, with affordable EMIs that we can pay at the end of each month, the world becomes an easy place.

However, not all of us can avail of the right loan that we need, and this has resulted in the birth of loan brokerage companies that help us secure the loan that we want or need at a particular point in time. Retail loan brokerage companies make their own profit and fulfill the needs, dreams, and aspirations of countless individuals and companies, which makes it one of the best business opportunities in finance.

Business for Deal Broking

There are numerous good business ideas in finance. With the expansion and the widening channels of income, companies, and businesses are forever ready to offer lucrative deals on their products and services. However, most of such deals come on a first-come, first-serve basis. Therefore, we have deal broking services that help other businesses and individuals get the best deals lightning fast. Building a deal broking firm can also stand as one of the best financial services business ideas that would be rewarding on a long-term basis.

Forex Trading

Globalization has made the world a small and well-knit place that is easily navigable. It has also made trading options easier than ever. However, the difference in the currencies of the people of different countries sometimes creates a list of problems in businesses and the transaction of money. Forex trading is a solution to these problems and can also be a business that you can look up to in case you want to set up a finance business. Here are the Best Foreign Exchange Companies you can look at.

Debt Collection Agent

With the increasing demand for loans across the globe, the total volume of debts is also increasing with each passing day, and a considerable number of such debts are recorded as bad debts. Therefore, to avoid all these debts being written as bad debts, there are debt collection agents and agencies that companies and institutions hire to follow up with their customers, and debt collection agents and agencies in this way, recover the debts.

Tariff Consulting

Tariffs and duties that are levied on the goods always widely differ from each other. For instance, the tariff levied on clothes differs greatly from that levied on alcohol and so on. Fixing these tariffs is not easy. They can only be fixed with the help of expert tariff consultants who are well-versed in tax management and duly analyze the markets. Tariff consulting is a growing financial services business that you can step in to find a world of opportunities.

Angel Investment Company

Living in the age of startups that are making our lives comfortable and changing the world ahead of us, it is the angel investors who contribute a lot towards raising successful brands out of startup ideas. Therefore, opening an angel investment company is something that you can really look up to if you have capital and are pondering on business opportunities in finance.

Audit Firm

If you are finance-minded and waiting to open a financial services business, then you are in luck because an audit firm might be just the right business option that you were looking for!

Audit firms are responsible for helping businesses cut costs, identify inefficiencies, investigate potential fraud or theft, and more. Most importantly, the demand for audit firms will never be less shortly and is one of the best financial services business ideas.

Commercial Bank

Commercial banks are insignificant to the masses and pretty much central to the overall economy of a government and of the country. They fulfill tons of financial requirements of the individuals and businesses of the country and are not without profit. Furthermore, more and more commercial banks joining the league of the already established banks have truly shown the way forward for all of them who are interested in finance business ideas in India and possess the tellable capital to start one!

Finance Business Ideas in India

Freelance Bookkeeping

Bookkeeping is a significant part of a company’s back-end processes. Finance bookkeeping is the maintenance of the company’s financial records. It includes a variety of accounting and bookkeeping services along with keeping an official track of the company’s spending. Bookkeepers are growing in demand and are usually hired on a full-time or a part-time basis. Therefore, opting for a career as a freelance bookkeeper is a wonderful choice if you are looking to proceed with a financial services business.

Stock Broking

Stockbroking is a service offered by stockbrokers that helps retailers, marketers, and other individuals to buy and sell shares. The stockbrokers are professional traders acting as registered representatives or investment advisors to their clients and are authorized to buy and sell the shares on their behalf.

Stockbroking is highly profitable and will never be less in demand in the near future, which makes it a good choice for all those who are wondering about finance related business ideas.

Tax Consulting

Tax is to be filled out by everyone in the country, but for most of us, it happens to be a boring and time-consuming process. Moreover, many of us also happen to be unsure of the process altogether. This brings tax consultation into play. Tax consultants are the persons who help their clients with crucial suggestions to file their taxes and make informed decisions while filing them about tax-related issues. This can well be one of the bright finance related business ideas if you are looking to start with one! Here’s a guide on How to start your own tax preparation business.

VC Firm

Venture Capital firms are built on the capital from wealthy investors, which offer much-needed capital to other budding companies and startups. With more and more promising startups coming into prominence and growing into big companies each day, the importance of Venture Capital (VC) firms is growing rapidly.

Therefore, if you are pondering on the best finance business ideas, Venture Capital firms can be a rewarding choice, which will not only help you grow your company and your income but also will stand as a great help to other companies.

Mortgage Bank

We are all familiar with mortgage loans, in fact, these kinds of loans happen to be quite popular in the modern world. Mortgage loans are offered by the usual banks as well as by specialized banks, popularly known as mortgage banks. The mortgage banks look after the origination and the servicing of mortgage loans and can come in really effective for all the people who are interested in mortgage loans and not willing to wait for them.

Starting a mortgage bank can thus be one of the best businesses in the finance sector if you are looking for one!

Finance-related Coaching

Finance is one of the core subjects that students can pursue and is strongly growing as a career option for students worldwide. This makes finance coaching classes all the more important for today’s generation. Therefore, if you have been a good student of finance and deem yourself to be strong in finance, marketing, accounting and other finance-related subjects, then offering financial coaching classes for students and business professionals is a welcoming career option around finance.

Finance-related Podcast

Podcasts are interesting as well as informative, and needless to say, we love to delve into podcasts that interest us. As finance has always been an important matter of concern, whether it is for students or for business professionals, finance-related podcasts ought to interest a wide range of audiences. Therefore, it can be a wise decision to start with finance-related podcasts if you have a knack for finance.

Finance-related Books

If you have a good grasp of finance, write well, and are really passionate about finance and accounts, then you are in luck! This is because you can hope for a huge career ahead as an author. Yes, you can author some really informative finance-related books and leave the finance enthusiasts and businessmen turning to the pages of your book over and over again. Here’s a list of Must Read Startup Books for Entrepreneurs in 2021.

Finance Magazine

Reading still remains one of the most popular hobbies. Most of us like to read every now and then and on a range of different topics. Finance, being an important subject of interest, boasts of a large number of enthusiasts that have grown with time. Therefore, finance magazines certainly rope in an incredible number of finance enthusiasts and business professionals, and writing or publishing financial magazines can turn into your favourite obsession.

Credit Repair Business

Credit repair, as the term indicates, is a way to help others improve their credit scores and their overall ability to borrow money from others. A major section of society today relies on credit, and a considerable number of them have already worsened their credit condition and need to repair it. This can well be your opportunity to score via a credit repair business.

Investment Management Firm

Businesses grow and eventually acquire capital that they can invest, but the investments should always be wise. Therefore, most of the companies reach out to several investment firms, who manage their investments in the best possible way. Investment management firms are quite in demand and can be an excellent way forward if you are looking to start a financial services business.

Build Investment Tools/Products

Investment tools and products never fail to draw a good deal of attention from businesses, and most importantly, they are increasingly growing in demand. Building investment tools and products will not only benefit your own company and other ventures but also help you extend them to other companies and profit from them.

Start ATM installation & Maintenance Company

The world and our country have surely gone the digital way, and along with all other industries, the banking industry has also seen quite a transformation. We hardly hit the banks today and would love our money to be withdrawn or deposited at ATMs. This makes ATM installation and maintenance really crucial, which gives a solid reason why you should look to start an ATM installation and maintenance company if you are determined to start a financial services business.

Supply of POS Machines

POS or point-of-sale systems are rapidly growing in demand for their effectiveness and the diversified uses that they enjoy in a whole range of modern industries. These systems are being absorbed by almost all the industries of now. So, opting to manufacture POS machines can definitely be a profitable business that would be beneficial for anyone who is looking to step into finance-related businesses.

Risk Management Consultant

Risk management is one of the pillars of business growth and is pacing incredibly fast with the growth of businesses and startups. It is one of the key factors that every other business looks for, which gives rise to the risk management consultants to stand with their companies as well as independently. Risk management consultants are, therefore, highly valued by every other company and can be quite a career if you want to pursue a career in financial services.

Credit & Thrift Business

Credit and thrift, as the name says, are businesses that take care of the credit requirements of other businesses, entrepreneurs, and other individuals and grant them loans at the decided rates of interest. The scope of credit and thrift businesses has been underlined first by the credit unions and thrift societies, which pooled all their resources together and offered loans to their members at agreed rates of interest.

The Credit & Thrift business is not only rewarding but is quickly climbing up the ladder of demand as well to pursue a career in it.

Commodities Trader

The commodities market is ever-expanding. Commodities include physical substances like oil, fruits, gold, grocery items, and more, the trading of which happens when the traders buy them at a low price and sell them at a higher price, thereby making a profit.

The trading of these products is never going to end, which makes commodity trading an important listing if you are noting down some finance business ideas that are well worth pursuing.

P2P Lending

P2P lending, also known as Peer-to-Peer lending, is a money lending process where businesses and individuals are lent through online services that match the requirements of the lenders with the criteria of the borrowers. These are mostly small loans that are granted via this process, thereby minimizing the risks to the lenders.

P2P lending is a great idea to proceed with if you are interested in pursuing a promising financial services business.

Real Estate Appraiser

Appraisers are the persons who assess goods, assets, and properties to define the monetary value of the same. Appraisers are of various kinds and are absorbed in a wide range of industries, including banks and financial institutions, real estate, and more. Real estate appraisers, like those who are associated with the banks, are quite in demand and enjoy an incredible amount of respect. Furthermore, they also enjoy a solid income and nurture the potential for earning more. Therefore, being a real estate appraiser is something that you cannot miss putting on the bucket list of financial business ideas. Here’s how to start a real estate business in India.

Crowdfunding Solutions

Along with bootstrapping and raising funds from investors, including angel investors and others, crowdfunding is something that has noticeably risen in demand over the years since it came into existence. Crowdfunding suits a list of different purposes and is something that both individuals and businesses look up to. Building a business that extends crowdfunding solutions for people is, therefore, a wise choice, eyeing the bright future ahead.

Bill Reminder App

We are living in an age that is pacing as fast as ever. Time is fleeting for real and brings in more wonder with every second that passes. Reminders are something that all of us need all the time unless our brains are supercomputers, of course. This is giving rise to a collection of reminder apps that help us remember the things that we should be accounted for.

Along with all the other tasks that we should be reminded about, reminders for our monthly bills are something crucial, and with some apps, the excruciating task is becoming easier. However, building another smart and foolproof app that solves the persistent issues of failed bill payments can be a bright idea, which can be equally rewarding.

Crypto Exchange Platform

The demand for cryptocurrencies, the likes of Bitcoins, Ethereum, NEO, and IOTA, has only increased over the past decade since the first cryptocurrency, the bitcoins, was discovered.

Now, with the increasing demand for cryptocurrencies, the demand for exchanging these currencies has also increased likewise. Furthermore, the crypto exchange platforms are highly profitable. This makes building a crypto exchange platform a must in case you have been looking for lucrative finance startup ideas.

Build Regtech App

Regtech apps are the cluster of software applications that are now used to manage regulatory compliances for present-day companies. Regulatory technology apps, which are now known as regtech apps, are powered by cutting-edge AI, ML, and more technologies. These apps help in a range of ways to save the time and money of the companies that depend on regtech companies. Additionally, exploring new business startup ideas within the realm of regtech can open up innovative opportunities for entrepreneurs looking to venture into this dynamic sector.

This business related to finance can be hugely beneficial as a financial services business idea because they are counted among some of the primary requisites of most small and medium-scale companies that are hoping to grow today.

Bureau the change

Operating a currency exchange business can be lucrative, especially considering the unique nature of currencies in every country. Anyone attending international locations is expected to alter their money, and with proper licensing, you can commence this business. Offering unique and successful business ideas in the currency exchange industry, such as innovative marketing strategies or loyalty programs, can set your enterprise apart and attract a diverse clientele.

Online Payment Service Platform

Amidst the flourishing online payment industry and increasing interest in digital financial transactions, the demand for online payment service providers has surged. As a provider in this space, you will furnish businesses with a resilient payment platform, enabling customers to make transactions with credit cards, debit cards, or cash cards. A processing fee will be applied to each financial transaction with confidence in return for this service.

Business Subsidy and Grant Consulting

There are various government subsidies and grants available for different types of businesses from different agencies. Small business owners often seek the assistance of experts who can handle the paperwork and other necessary tasks to secure the subsidies. If you possess knowledge and experience in a specific subject, you can start a business that caters to a niche segment.

Franchise Consulting

Starting this financial services business is great for those with limited funds. There are two ways to operate: you can represent franchise-offering companies in search of clients, or you can guide clients on the best franchise based on their location, experience, and investment capacity.

Budgeting Service

Many individuals, families, and businesses face challenges in managing their budgets. Handling finances for a business adds another layer of complexity. Leveraging your financial expertise can make you highly sought after, providing valuable assistance to individuals, small business owners, and those exploring business startup ideas. On average, individual budget consultants earn around $85,000 per year, but the earning potential can significantly increase when working with businesses. This business related to finance allows you to make a meaningful impact on both personal and professional financial well-being.

Online Finance Courses

Sharing your knowledge and experience becomes accessible by creating an online finance curriculum on platforms like Coursera or Skillshare. With self-paced courses, once your content is live, your main tasks involve answering students’ questions, allowing you to generate income passively. Successful creators in this space can achieve six figures in earnings, making it a lucrative avenue for those looking to share expertise and earn simultaneously. It can be top entrepreneur ideas in finance industry.

Start a Community Bank

In the diverse landscape of the banking sector, one notable niche is the community bank, which boasts a lower startup requirement compared to commercial, mortgage, or investment banks. If venturing into the finance services industry, initiating a community bank presents itself as a viable option, especially if you possess the qualifications necessary to obtain a commercial bank license. This business endeavor proves to be both profitable and thriving, offering a promising opportunity for investors.

Start an Investment Club

Many individuals neglect the importance of serious investing for the future for various reasons, including laziness. Recognizing this, starting an investment club is one of the top business ideas in the finance-related industry. Whether targeted at colleagues, church members, or neighbors, an investment club is a platform to engage people in the finance services sector. Fostering a communal approach to investment encourages individuals to participate actively in securing their financial future. It can be one of the best business ideas for finance professionals.

Start a Debt Collection Business

One of the most profitable finance businesses to start is starting a debt collection business, particularly focusing on bad debts. This niche field presents an opportunity to assist individuals and businesses in recovering owed funds. Clients will likely seek your services once they recognize your capability to reclaim money from debtors. In this business model, earnings are generated through commissions or percentages based on successfully recovered debts, emphasizing the importance of negotiation skills to enhance profitability.

Start a Hedge Fund

For significant investors seeking portfolio expansion, delving into establishing a hedge fund firm can be one of the best business ideas. A hedge fund, broadly defined as a regulated investment fund with diverse investment and trading activities, caters to a limited set of investors who remunerate the fund’s manager through a performance fee. Operating a hedge fund entails assisting clients in maximizing their returns, with the manager’s income directly tied to the fund’s performance. Consequently, the performance fee stands out as the defining characteristic of hedge funds, prompting managers to employ various investment strategies for optimal client returns making it a very profitable business ideas in finance industry.

Become a Financial Advisor to Retirees

Many individuals fear retiring from businesses or organizations due to uncertainty about managing their retirement entitlements such as gratuity, pension, and other benefits. As a financial expert and planner, you can start a business in the financial services industry by becoming a trusted financial advisor to retirees. There is a substantial market for your services, as retirees seek guidance and assurance in navigating their financial concerns during retirement, making your expertise highly valuable and in demand.

Robo-Advisors

Robo-advisors use smart algorithms to provide low-cost, simple, and diversified investment services. People like robo-advisors because they are easy to use and affordable. Startups can improve them by making the algorithms smarter and offering more services. With AI advancing, this area is expected to grow quickly. It can be one of the top business ideas in finance industry.

Green Finance Solutions

Make your finance business stand out by offering eco-friendly options. This could include supporting green investments, eco-friendly bonds, or loans for sustainable projects. These solutions can attract customers who care about the environment and want to make a positive impact. It is one of the best ideas for business in finance.

Fintech App Development

Financial Services Business Ideas — Global Fintech Market

Start a fintech business by creating apps that offer new financial services. These apps can make tasks like transactions, budgeting, and investing easy for users. This is a growing field with big opportunities to solve everyday money problems for people.

Debt Counseling and Consolidation Service

Help people manage their debt with services like counseling, debt consolidation, and financial restructuring. Earn through fees for these services and educational programs. With rising consumer debt, this is the right time to offer support. It suits financial experts skilled in negotiating with creditors and designing repayment plans.

Mobile Notary and Financial Document Service

Providing mobile notary services to help clients with document verification and signing, especially for financial papers can be one of the best business ideas. Earn through fees for notarization, travel, and fast service options. As businesses become more mobile and global, the demand for on-the-go notary services is rising. It’s ideal for certified notaries with a business mindset and a focus on busy clients.

Digital Payment Service

A digital payment service is a great business idea because more people are using cashless transactions, and there’s a growing need for safe payment options. You can add features like mobile payments, peer-to-peer transfers, and connect with online shopping platforms to boost growth and profits.

Blockchain-based Payment System

A blockchain-based payment system offers extra security by using decentralized ledgers, making it harder for fraud or hacking to happen. It also enables faster and cheaper transactions, helping with smooth cross-border payments.

Conclusion

We understand that starting a finance-related business can seem daunting, which is why we have put together a comprehensive list of the best financial business ideas for you to consider. From starting a bookkeeping service to launching a financial planning firm, our list covers a wide range of business ideas that cater to different niches in the finance industry. We are committed to providing you with the latest and most relevant information for your business, which is why we will keep updating this list as we gather more insights from industry experts. So, be sure to stay tuned for more updates on the best finance-related business ideas to start with.

FAQs

What are some of the finance business ideas?

Top Finance-related business ideas include:

Micro-finance Bank
Finance Consulting Firm
Private Finance Blogs
Insurance Agency
Retail Loan Brokerage Company
Finance-related Coaching
Finance-related Podcast
Crowdfunding Solutions
Bill Reminder App
Crypto Exchange Platform
Build Regtech App

Name some personal finance business ideas?

Businesses in finance include, Tax consultant, investment management services, mutual fund agency, build personal finance management tools/apps, bookkeeping services, impart your knowledge regarding personal finance.

Some banking business ideas are:

Micro-Finance Bank
Commercial bank
Gold Loan Company
Mortgage bank
P2P lending
Build Regtech App/Tools
Merchant Banking
Forex

How to get Finance to start a Business?

7 Ways to raise finance for your business:

Personal Money
Seek for Angel Investors
Crowdfunding
Bank Loans
Find a venture capitalist
Pursue startup grants
Family and Friends

What companies are in the finance field in India?

India has a wide range of companies in the finance field. Major banks like HDFC Bank, ICICI Bank, SBI, and Axis Bank offer loans, savings, and investment services. NBFCs like Bajaj Finance and Muthoot Finance focus on consumer and gold loans. Insurance providers like LIC and digital platforms like Paytm and Policybazaar offer online payments, lending, and insurance options. These companies play a key role in supporting both individuals and businesses with their financial needs. There are tremendous financial services business opportunities in India.

Which are some best financial business to start?

A great financial business to start is a loan advisory or brokerage service. You can help people get home, personal, or business loans by connecting them with banks and NBFCs. It’s low-cost to start, uses online tools, and earns commission from lenders.

Which are the business ideas for finance students?

Finance students can start small businesses like loan consultancy, tax filing services, or freelance bookkeeping. They can also offer investment advice, budget planning, or stock market education through blogs or YouTube. Other good options include mutual fund distribution, credit repair services, or financial analysis for startups. These ideas need low investment and help build real-world experience.

June 3, 2025

Everything about Mudra Loans | How to Apply for Mudra Loan?
The increase of startups and the interest of young entrepreneurs to start their businesses has led to many schemes introduced by the Government of the country. Several opportunities are given, to pursue the dream of being an entrepreneur to the interested people. Out of so many schemes, one of them is Mudra Loan.

Mudra loan or the Pradhan Mantri Mudra Yojana (PMMY) scheme was launched in 2015 by the Prime Minister of India. MUDRA, which is short for Micro Units Development and Refinance Agency, provides loans up to Rs. 10 Lakh to the non-corporate and non-farming small and micro-enterprises. This also includes enterprises involving allied agricultural activities.

It is known globally that Indians have a great creative and innovative mind, however the majority of them are unable to convert these ideas into profitable businesses due to financial reasons. This is common in almost all the different sections of society. PMMY was mainly to encourage everyone to try and implement their ideas.

What is Mudra Loan?

In 2013, it was found that there were around 5.77 crore micro and small enterprises in India and about 60% of these were owned by backward classes. These units cannot be covered by the formal loan lending sectors. This means that they might have to depend on informal lending sectors which can lead to a lot of issues or manage with their own funds. The Mudra Loan scheme is to support young, budding entrepreneurs and also existing businesses to expand and experiment with their ideas. This is much more secure and the rate of interest is not very high.

The Schemes Under Mudra Loans

Mudra loans have several schemes under them and they are:

Shishu

This is when the amount required by the borrower is less than INR 50,000. This is usually given to entrepreneurs in their early stages. This is basically a working capital term loan. There are a few things that are checked in this case. The checklist here includes the Machinery quotations and the details. The machine details have to be provided perfectly well. The borrower should also provide all the details that the banks ask for. This might include the details of the supplier. This is basically for startups.

Kishor

This covers loans from INR 50,001 to 5,00,000. This is not for beginners but already established businesses when they want to expand their business operations. In this case, they might require tax returns. The lender needs to know all the details of the company. It is also required to submit the balance sheet for the last 2 years, the estimated balance sheet for 1 year, MOA and AOA, and the sales made before the company applied for the loan in the Financial year.

Tarun

This is another scheme that covers loans from INR 5,00,001 to 10,00,000. This is when the business owner meets certain preset conditions. The required documents and details are similar to that of Kishor but there are a few other proofs that are to be included. This includes the caste certificate, Address proof, Identity proof, and other essential documents. The loans are approved only if all the documents are perfect and none of the documents is missing or faked.

Who Can Borrow Mudra Loans?

Mudra Loan Schemes encourage women

There are various enterprises that can borrow under the Mudra loans scheme. This includes individual business entities, partnership firms, public companies, private companies, Proprietary firms and so on. Also, to be eligible to borrow this, the applicant should have a proper credit track record. The proposed activity is properly studied and based on that, the lender might ask for educational qualifications and other basic requirements.

The borrower will be eligible if he submits all the documents and has all the basic requirements listed by this scheme.

Sectors Covered Under Mudra Loans
- Food product sectors
- Textile
- Transport and transport activities
- Community, personal service and social activities.
- Activities allied to farming and agriculture.
- Finance for the equipment in micro-units.
- Business loans for shopkeepers.
Features and Benefits of Mudra Loans

The key benefit of this scheme for borrowers is that they do not need to show collateral or security. Also, there is no processing fee for this. Also, there is no minimum amount that you need to borrow. It can be used for various purposes like expansion, modernization, machine purchase, renovation, etc. There is no processing fee involved. Only in the case of the Tarun loan, 0.5% of the loan amount is charged as the processing fee. Mudra loan can also be availed online and the repayment period lies between 3 and 5 years, depending on various factors. The interest percentage for Shishu is nil and for the other 2, it is 10%. Also, the age of the borrower must be above 18 and below 65 years to avail of Mudra loans.

Steps To Apply For Mudra Loans

It is very easy to apply for Mudra loans. You have to have all the necessary documents.
- Step 1: Check what are the documents necessary for the amount you need and keep all the documents ready.
- Step 2: Approach a financial institution. This loan is available in almost all renowned financial institutions. You can approach any one of them or even check their website out for details. Make sure to check if the financial institution is registered under the Mudra scheme.
- Step 3: The next step is to fill out the application form carefully. Almost all the details like personal and business details. The documents have to be attached. Mention the amount you might need. There are different forms for Shishu, Kishore and Tarun. Choose the right form and keep the documents in hand while filling out the form.
- Step 4: Wait for approval. Once the loan is approved, you will receive the Mudra card. You can use the card to draw the money you need.
This is the set process in almost all approved financial institutions. It is safe and secure.

Conclusion

Small businesses and entrepreneurs can go for a Mudra loan as it is easy to get approved and also it will help them get the first capital for their company. Since there is no collateral or security required, it can be availed by anyone satisfying the criteria. This serves as an encouragement for youngsters with an idea to get basic funding for their business idea and hence they will be able to put their idea into practice. This is available in various institutions and also can be dealt with online. This makes the entire process much easier than it is. The only major criteria are that all the documents to be submitted must be perfect and the borrower should be within the specified age limit.

FAQs

Who introduced Mudra Loan?

Prime Minister Narendra Modi introduced the Mudra loan.

When was Mudra Yojana announced?

The Mudra Yojana was announced on 8th April 2015.

How much loan is provided by Mudra Yojana?

Mudra Yojana provides loans of up to INR 10 Lakhs to borrowers.
June 1, 2022
Entrepreneurial Finance: Resource-Based View (RBV)
One of the directions of the search for the foundations of the strategic success of an enterprise is the resource approach of strategy formation, which is considered as an alternative to the market-oriented strategy of strategy development. The resource concept occupies a steadily leading position, being currently the most advanced and reasonable tool of the theory of strategic management. The theoretical background of the resource approach is in good agreement with the works of classical economists, for example, E. Penrose, J. Schumpeter, R. Rumelt, and others.

The practical significance of the resource approach lies in the new justification of the role of management in the strategic management of the company. To effectively manage the process of creating competitive advantages, management needs to identify, develop, protect the organization’s resource base promptly, implementing new combinations of resources, which will ensure effective transformation and change of resources “at the entrance” to the organization into output value-added products that have value for consumers. The resource approach lays the methodological basis for the qualitative analysis of strengths and weaknesses, allowing to highlight the resources that are key to building and maintaining the competitive advantage of companies, especially startups. The purpose of this study is to analyze the resource-based view as an essential element for the development of startups.

The Concept of Resource-Based View (RBV)
Resources as a Critical Category of RBV
Analytical Evaluation of Resource Properties in RBV
RBV as the Foundation of a Competitive Startup Business Model

The Concept of Resource-Based View (RBV)

The “compression” of the economy, the structural and temporal uncertainty of the further development of industries and regions make the study of internal sources of economic potential startups relevant. The results of monitoring the main approaches and methods of strategic management (Prahalad et al. 2001) show that the study of the micro bases of firms’ sustainable competitive advantages is increasingly concentrated in the area of the modern resource concept (RBV). The primary side of a resource-based company representation theory is its ability to combine many previously separated threads of the theory of strategic management into a single stable analytical framework – competitive analysis, industry analysis and assessment of parameters of the internal environment of a company (Fleisher & Bensoussan, 2007).

The resource approach to the formation of a strategy is based on the fact that each firm has a variety of resources acquired in the factors of product markets and “acquired” in the course of its activities, as well as the ability to combine them with their capabilities (qualified personnel, technical means) and goals.

The principal differences between the modern RBV approach and other theories of strategic management are as follows:
1. The unit of analysis is the firm, not the industry (market) (Wernerfelt, 1995).
2. The source of sustainable competitive advantages in different resources (heterogeneity is explained by the specific transformation of resources within the firm) (Penrose, 1995).
3. The essence of the company’s strategy is not in the traditional development of the product structure and coverage of market segments but the development of a dynamic concept of changes in its nature (Ciszewska-Mlinarič & Wasowska, 2015).
4. The ability to use economic instruments allows us to explain how a company’s resources determine its effectiveness in dynamic competitive conditions.
Resources as a Critical Category of RBV

Studying the controversy on this issue and at the same time recognizing the dynamic nature of the market and intra-company processes, the authors generally consider the differentiated approach to the separation of categories of the resource concept to be the most successful from the logical nature of the puzzle of terms. Nevertheless, some definitions and their interrelations require clarification. The basis of the formation of the company’s resources is the factors of production, defined as undifferentiated resources available on the market – land, unskilled labour, the capital.

Thus, the external environment is the primary source of the company’s resources. It is clarifying the existing approaches to understanding the category of “resources” (Helfat et al. 2009). The authors propose the following definition: resources are specific assets controlled by a firm that are difficult or impossible to imitate and which allow a firm to implement strategies that enhance its economic and managerial efficiency, as well as ensure its receipt of quasi-rent (Helfat et al. 2009).

The definition focuses on two significant points: first, the company must control resources. To control does not mean to own, but to find an opportunity to use them. This theoretical construct not only explains how business ideas “start” without resources but does not contradict the idea of using resources within the framework of a relational approach (sharing resources in an inter-company network); secondly, the concept of quasi-rent is interpreted as a method of obtaining economic benefits by capturing the disproportionate share of other economic rents over the competitive level: Ricardian (income from owning limited valuable resources), monopoly (income from market power) and entrepreneurial (income from risk and innovation) (Fleisher & Bensoussan, 2007).

Thus, effective resource management should automatically provide higher returns than competitors. It is precisely the presence of quasi-rent that, unlike the industry approach proposed by M. Porter (2008), explains the difference in the efficiency of companies operating in the same market. Adhering to the principle of separation of the categories “resources” and “abilities,” it is important to note the available classifications of resources that meet this requirement (Porter, 2008).

According to K. Hofer and D. Schendel (1978), the firm’s competitive advantages can provide six types of resources: financial, physical, human, technological, organizational and reputational. R. Grant (1991) adds intangible resources to this typology. Later, they were allocated three blocks of resources: material, intangible and human (Grant, 2016). Sh. Hunt (1999), in addition to the generally accepted list, identifies the seventh type of resource – jurisdiction (legal), bearing in mind the possibilities of using the institutional and other advantages of the company’s location. Roos, S. Pike and L. Fernstrom (2005) classify all the company’s resources in the context of two blocks: the first includes the so-called traditional economic resources — material and monetary; The second group includes intellectual resources, including relational, human and organizational capital. The authors argue that it is the second block of resources that can provide the firm with competitive advantages in the long term.

D. Collis and S. Montgomery (1998) divide resources by type of efficiency into two categories:
- Public goods – resources that can be simultaneously and conflict-free to be used in several businesses (trademarks, technologies, advanced management methods);
- Private goods – resources that are harder to manage due to competition between departments (financial resources).
The classifications of J. Timmons and S. Spinelli (2004) are based on the need for resources to create a business. They allocate four types of resources required for the organization of a firm: human (management team, not employees!), Financial assets (plant, equipment) and a business plan, i.e., resources that an entrepreneur can control, starting his activity.

From the standpoint of the theory of transaction costs, resources are specific assets that cannot be used in an alternative way without a significant loss of their potential. It is a problem of moving resources that make their heterogeneity long-term, and their competitive advantages sustainable. Using the specified evaluation criterion, O. Williamson (1985) identified six types of resource specificity: the specificity of the location of the asset; the specificity of physical assets; human capital specificity; targeted assets aimed at expanding production capacity; trademarks; asset specificity over time.

Combining the RBV analysis with the principles of the systems approach, G. B. Kleiner suggests investigating two significant resources – the right of ownership to the space available to the subject and the time available to them, proving that it is these resources and their properties that ensure sustainable development of the system. Despite the differences in the structure of resources, the authors, adhere to one position – they seek to select resources that meet the requirements of uniqueness (Chursin & Tyulin, 2018). Therefore, before determining the final composition of a firm’s resource portfolio, it is essential to determine the list of properties that should be present in a competitive resource.

Analytical Evaluation of Resource Properties in RBV

For the first time, an analytical scheme for assessing the properties of resources was cited in his work by J. Barney (n.d.), proposing four measuring parameters: value (value – V); rarity (R); the impossibility of copying (imitability – I) and the indispensability of a model of organization (organization – O). The VRIO model, linking the listed properties of resources with the sustainability of the competitive advantages of a firm, is currently almost the only generally recognized and widely used tool for identifying resources in strategic management. The study of J. Barney gave a powerful impetus to the use of this analytical framework in other works. So, R. Amit and P. Schumaker (1993) clarify the properties of resources: value consists of external value (strategic industry factors) and the complementarity of resources within the firm; rarity is determined by the physical rarity of the resource and (or) the low possibility of its sale; the impossibility of copying is divided into merely the impossibility of copying and the low substitutability of resources.

According to D. Collin and S. Montgomery (1999), the value of a resource is created by three factors: rarity, conformity, and demand, i.e., the value is a consequence of rarity, and not an independent attribute of a resource, according to J. Barney. Also, the authors point out that resources cannot be assessed in isolation from other factors since their value is determined in conjunction with market forces (Collis & Montgomery, 1999). R. M. Grant determined the most significant properties of resources according to the level of potential of their profitability: at the stage of creating an advantage – the rarity and relevance (relevance) of a resource; at the stage of creating sustainability, the advantages are the duration of use, the ability to imitate and transfer the resource; at the stage of assigning the results – ownership of the resource, level of market power and integration in the processes (Grant, 2016). M. Peteraf (1993) identifies four criteria that a firm’s resources must meet to generate sustainable competitive advantages: resource heterogeneity; ex-ante restrictions on competition (only those resources that are purchased at a price below their present value can generate rents); ex-post restrictions on competition (difficulty in imitating a resource) and imperfect resource mobility.

The VRIO conditions given in general are only necessary but not sufficient for the usage strategy of specific resources of a particular firm: a strategic resource for one firm may not be such for another (Barney, n.d). In other words, the correspondence of the available resources to the degree of their importance is significant for obtaining sustainable competitive advantages in this market (spatial aspect) and existing conditions (temporal aspect).

The theory of resource dependence is closely intersected with the RBV concept, according to which an organization depends on the business environment in direct proportion to its need for resources or actions (Thompson, 1967). Possession of strategic resources increases the independence of the company from changes in the external environment. The founders of the resource dependence theory J. Pfeffer and J. Salancik (2003) distinguish two properties of resource significance: the relative volume (size) of the required resource (for example, for a university the primary resource will be human capital) and its criticality for the functioning of an organization for many types of business it will be insignificant, but without this resource the activity of the company is impossible).

RBV as the Foundation of a Competitive Startup Business Model

Supporters of the traditional approach consider the resource strategy as a combination of two groups of decisions: decisions about the volume and quality of the necessary resources and decisions about the behaviour on the market of resources. In the resource concept, resources play a fundamental role, which means that their management should be much more efficient. The sequence (algorithm) of the development of the strategy of the company based on the RBV analysis can be represented as follows:
1. Setting the goal and determining the desired results;
2. RBV – analysis;
3. The rationale for the choice of strategy (Foss, 2005).
For a firm to be recognized as competitive, it must be of value, be unique in terms of visible external results, and useful from the internal results of the activity. Therefore, at the 1st stage of the formation of a resource strategy, before deciding on the acquisition or use of resources, the firm should make a forecast of the results that are planned to be obtained with the help of these resources. Thus, the management of a firm must classify external (visible) and internal results, to understand how they are related to each other. There are three areas of a company’s strategic development (three ways to get visible results): cost leadership, focusing, and differentiation. In each case, the firm generates specific values for the consumer; accordingly, it can be concluded that the required resources and their significance will differ significantly (Deusen et al. 2007).

Assessment of the results, in general, is a needed practice not only for companies but for college and university students as well. While they are taught to write entrepreneurial finance research papers, they often forget about their own productivity. Conducting research, writing essays, and analyzing different business studies is a valuable academic experience, but often it stands between students and their own, much more perspective projects, side jobs, networking, etc. Addressing one of the professional academic writing services, for assistance, is a cost-effective way to deal with the academic to-do list on time and spare energy for real breakthrough projects.

At the 2nd stage of the formation of the company’s resource strategy, the resource portfolio is analyzed (RBV analysis). Systematization of the previous provisions of our study allowed us to identify the main directions of this analysis:

1) Assessment of the degree of relevance of resources (compliance with the demands of the external environment) is feasible by studying four parameters that determine the key success factors for any business (Rockart, 1979): characteristics of the macro-environment, industry parameters, competitive position and the specifics of the company (in particular, determining the place of the company in the value chain);

2) Assessment of the availability and adequacy of resources for the implementation of the chosen strategy. The identification of the resource base of a company can be made by drawing up a resource tree – a structure that allows the decomposition of common groups of resources for their specific types (Roos et al. 2005). The method of compiling a resource tree allows you to identify both resources and the portfolio as a whole simultaneously;

3) Determining the significance of each type of resources for creating quasi-rent – can be made by weighing resources in two directions: assessment of the impact of the resource on the generation of economic rent; comparison of the available resource with the normative (ideal) in quality and quantity;

4) GAP-analysis – identification of excess and (or) missing resources. In terms of a combination of properties, a resource can be conditionally assigned to one of four groups: an unconditionally valuable resource (regardless of market conditions and other institutional conditions, gives a firm a competitive advantage); conditionally valuable resource (gives competitive advantages under certain market conditions); a necessary but not valuable resource (available for most market players, but necessary for generating economic rents; an example of this is the source of funding); non-valuable and optional resource (its presence does not affect the competitiveness of the company or gives a negative effect) (Økland, 2015);

5) Determining the complementarity of resources. Complementary resources, as noted earlier, can have an additional positive effect. Therefore, it is important to classify resources by pairing degree, which will allow choosing from the available strategic alternatives those that will use the associated resources, i.e., to give the maximum possible synergistic effect (Ambrosini, 2007). It is also important to carry out a “reverse” process, namely: to determine how existing resources can be integrated in another way, and on this basis for choosing adjacent strategic alternatives.

At the 3rd stage – the justification of the choice of strategy – the problems identified in the process of RBV analysis are eliminated. Within this stage, in our opinion, the following strategic choice is possible:

1) Investment in resources – At the same time, the firm must answer two questions:
- How to invest: in current resources to maintain existing competitive advantages, in new resources to implement new projects or to refrain from investing;
- What to invest in? (It is possible to use resources in different strategies);
2) Improving the quality of resources – strengthening existing, mutual addition of resources and their balancing, reprocessing and co-optation;

3) Resource regulation – expanding the company’s resource access to markets or focusing on one; focus on cost reduction or product quality (according to the selected strategic area). Resource properties are not stationary. It means that their uniqueness and, consequently, their value may change over time. Therefore, the proposed sequence of actions the company must comply with permanently – only then can we talk about long-term success (Kirsch, 2007).

Conclusion

So, proposed by identifying the resource portfolio, determining its properties that provide sustainable competitive advantages, the algorithm for justifying the strategic choice of a company allows to: determine the resources of the company in the context of the modern resource approach; identify the factors contributing to the uniqueness of the company’s resource portfolio; determine the set of properties of the resources needed to generate economic rents; identify the final composition of the firm’s resource portfolio, allowing to achieve sustainable competitive advantages; highlight the main directions of RBV analysis.

FAQs

What is a resource-based view?

The resource-based view (RBV) is a managerial framework used to determine the strategic resources a firm can exploit to achieve sustainable competitive advantage.

What is a resource-based view example?

Examples include buildings, plants, equipment, exclusive licences, patents, stocks, land, debtors, employees.

What is the primary limitation of the resource-based view?

(1) The recourse-based view has no managerial implications, (2) the resource-based view implies infinite regress, (3) the resource-based view’s applicability is too limited, (4) sustained competitive advantage is not achievable, (5) the value of a resource is too indeterminate to provide a useful theory.
February 25, 2020