While the thought of starting your own business may be exciting, it can also be intimidating – even for someone with a successful business career behind them. The good news is that, by following a few basic rules, it's easier to start a business than you think – and the chance of success is much greater.
The difference between owning a business and working in one is significant. As the owner you're directly responsible for every aspect of the business's success. That's why it's important to do your research and plan accordingly. Here are some steps to follow if entrepreneurship is where you want to go.
1. Choose an option that's right for you
When thinking of starting your own business, choose one that'll suit your lifestyle and preferably one in which you have some direct knowledge and experience.
For instance, if you want to work regular hours, opting for a fast food franchise isn't a good idea. Similarly, if you're thinking of buying a boat-building business, it's important that you know a little bit about what's involved, even if you're not a professional boat builder yourself.
2. Do your market research
Market research doesn't have to be complicated, but it's important to make sure that there's a need for your product or service. Find out whether there is competition already established in your area, whether your offering is unique or fills a special gap in the market.
If you can offer a product or service people need, which doesn't already exist, you'll have a good chance of success. For example, you might be able to offer a scholar transport service in an area off the public transport route or develop a new form of health snack where there's a demand, but no supply.
3. Draw up a business plan
Writing a business plan is like drawing up a road map. You're not likely to reach your destination unless you know where you're going and what you'll need to get there. As intimidating as it may sound, this isn't rocket science. You need three or four pages that will give the business operational and financial direction.
4. Choose a specialist investor
When looking for investment, choose a company that has specialist knowledge of the challenges facing entrepreneurs, as well as of the sector in which you intend to work. This could be one of the most important decisions you'll ever make - for yourself and for your business.
And before you waste your time and face unneccessary rejection, find out what a financier's criteria are for finance. When you know the requirements, you can prepare accordingly, or choose to go somewhere better suited to your needs.
5. Employ the right people
Not all start-ups employ people from the start, but if you do, it's important to choose wisely. In a small business, people spend a lot of time together, so you need to have employees that you feel you'll be able to work with. Also, choose people who have experience in the business you'll be starting - this will give you a valuable support system.
6. Market your business
Business doesn't come to those who wait - it comes to those who go out there and tell people what they have to offer. Even the smallest business needs to market its services by, for example, placing ads in the local papers, distributing flyers, putting up notices in shopping centres, recreation centres and schools and developing special offers for special needs or occasions.
7. Put financial systems in place
Even if you're not a financial expert yourself, implement simple but solid financial systems right from the start. There are excellent, user-friendly software packages you can use to do this and it's even worth contracting the services of a bookkeeper or other financial professional to assist you on a regular basis. Lack of financial discipline is often where start-up businesses go off the rails.
8. Manage your cash flow
Cash is the life-blood of a business and it's important to manage cash flow carefully. The right investor and/or financial consultant will be able to help you do this.
9. Supplement your own knowledge with specialist skills
It's important to constantly build on your skills in all aspects of your business. Read, research the internet or attend training shortcourses on a consistent basis to implement the most productive processes in your business and keep abreast of industry trends.
However, no entrepreneur can be a specialist in every aspect of business and it's important to contract specialist skills and services when you need them. For example, if you're thinking of setting up a small factory and don't know much about the production process, an experienced production manager will be worth his or her weight in gold.
10. Enjoy yourself
One of the best things about owning and running your own business is that you have total independence. There'll be good days and bad days, but it's important to enjoy what you're doing and try to maintain some kind of work/life balance.
Owning one's own business is an adventure – enjoy it every step of the way.
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