Many of us dream of starting a business and being their own boss in their professional life. There are people who want to think out of the box and exercise independence in their way of doing things. To them staring their own business is a passion. They want to work in their own way and gradually develop the business.
A Sub-Broker business is one of the best entrepreneurship that can be started at any phase of life. You can start it at the beginning of your career, or you can start this business after taking voluntary retirement from your regular office. You just need to stay focus and be dedicated to your work. A Sub-Broker is any person, who is not a direct member of a Stock Exchange, but he transacts on behalf of the stockbroker as his agent. His function is to buy, sell and deal in securities for the investors through such stock-brokers. In this article, the process of starting a Sub-Broking business would be briefly discussed.
- Capital Requirement to Start Sub-Broker Business
The capital requirement is the most important factor in starting a business. This is because money is the most critical constraint of every business. In a Sub-Broking business, the initial capital requirement can be tabulated under the following heads.
- Registration with the Ministry of Corporate Affairs
This is a one-time capital investment to obtain the registration certificate in order to start working. It includes the fees of the Chartered Accountant and the stamp duty according to the state. The registration fee varies from Rs 15000 to 20000.
- Initial Deposit with Main Broker
This is also a one-time capital investment and depends on the broker who’s Sub-brokership you intend to take. It typically ranges from anything from Rs 50000 to 300000.
- Computers, Workstations, and Television
These are the one-time unavoidable capital investment and with the betterment of technology the prices for these gadgets have come down over the years.
- Internet Connection
This is a monthly working expanse for high-speed internet access. The charges of internet connection have also come down over the years.
- Monthly Rent of Office
The monthly office rent depends on the size and location of your office. Luckily, sub-broking business does not require a very big office area. Office size of approx. 200 sq. feet carpet area is sufficient to start the business.
- Salary to Staff
You require a minimum of two employees to start the sub-broking business. The salary of the staffs depends on the location of the office and the skill of the employees hired by you.
- Other than all the above-mentioned expenses you would also have to pay the monthly electricity bill, telephone bill and water bill for the office. You should maintain a fund for miscellaneous expenses.
- Prepare a Natural Database of Clients
After you have obtained the Certificate of Registration and set up an office, the next step would be to make a list of prospective clients. You may include your friends, relatives, family members and social contact in the list. Your objective would be to transform the people on the list to your clients.
Continue making cold calls to the people who are likely to become your clients. Update your prospective clients on the financial investments which is best suited for them and which are likely to give them better returns in future.
- Meeting with Clients
You should at least conduct 3-4 meetings with your clients/prospects. This is the only natural way of adding new members to your clientele. It will help you to either source new clients or bring in new money from the existing clients.
- Networking with Fellow Sub-Brokers
Networking with the fellow Sub-Brokers would keep you updated about the newly inducted financial rules and regulations. It will also add more people to your contact list to make the business flourishing.
The above was, in brief, a few tips to kick-start your Sub-Broking business.