If You Choose To Start A Business, Make Sure It's Right For You
Starting a business is tough. Most startups fail, and it's because the founder faced challenges they couldn't overcome. The right business can be incredibly rewarding though; you just need to know what you're getting into.
In the post-2000 era, there have never been as many opportunities for budding entrepreneurs to take the leap and to go it alone, using their energy and steely determination to create their own future careers and income.
I have great admiration for people who have taken on this challenge, made it through all the hurdles and then still have managed to create their own successful business ventures.
We live in challenging times and my belief is that the more business opportunities that can be created by small business owners, the more unemployed people will stand a chance of finding work and creating a source of regular income for themselves and their families.
Peter Drucker said, “Wherever you see a successful business, someone made a courageous decision.”
I believe this, but we also shouldn’t go into business blind.
Be honest when you ask yourself, do I really want this?
Ask yourself why you would want to throw away your existing career. What are your reasons for wanting your own business (no, really!) and are they good enough for you to walk away from your job, assuming that you are currently employed?
It’s time to dig deep
Are you easily stressed, or have you had stress issues in the past? Are the reasons for wanting to have your own business because someone you know has a successful business, which looks appealing to you? Maybe you come from a family that has a history of having their own businesses.
Whatever the reason, write it down and think about whether it will make you happier to go this route, rather than remaining in your current career. What is certain about new businesses is that many of them fail, due to a wide variety of reasons.
It cannot be stressed enough that your reasons for wanting to go into your business need to be based on a passion and belief in yourself and your ability to do everything in your power to make it work.
Many first-time business owners just didn’t realise what they were in for, before embarking on their journey and what catastrophic consequences were to follow when everything fell apart later on.
Get a second opinion
Are you young enough to bounce back if it all goes wrong, or do you have dependents who rely heavily on your income for support?
Whatever your circumstances, be sure to discuss your plans with family, friends and trusted colleagues, and also create a basic business plan early on to help you clarify what you intend doing.
You may know someone whom you admire as an entrepreneur, so arrange to meet with that person to ask about the ups and downs of having your own business.
Try to choose someone you trust to be straight with you. Discuss your idea with people who are successfully running their own businesses, or even much older business people who will have years of experience that can be used to assist you in making your decision about whether to proceed, or not.
Far too often, people start businesses after receiving payouts given to them by companies, like retrenchments or early- retirement packages. They feel that they must do something with their newly-acquired funds, especially if replacement work is not an easy option.
The problem with this is that it really shouldn’t be their primary reason for wanting to pour their hard-earned savings into something that can so easily be a high-risk venture.
The lesson here is that there must be a solid and credible reason for wanting to start your own business. If not, taking the slow road and having a secure income may just be your better option.
First, the harsh realities of starting a Small Business (the down side)
Firstly, you may lose everything that you have worked for so far in your life, if your new venture goes unexpectedly wrong.
Your health may suffer and your family life and relationships may be negatively affected, too.
These are some of the worst-case scenarios, but a lesser downside may just be a delayed and frustrating startup, filled with lots of financial stress, punishing self-doubt and human-resource stress.
Know what you’re getting into
The unofficial figures for businesses that don’t make it in the first few years generally say that nine out of ten don’t get to year three.
That said, it’s people like you who will continue to push past the boundaries and improve these figures, and business success is good for the economy, employment and the entrepreneur.
To achieve something worthwhile, you will have to step outside of your comfort zone and that is exactly what starting a business does to you.
Most failed businesses are due to fundamental mistakes made by prospective entrepreneurs not doing their homework before starting the venture or, even worse, not detailing a business plan well in advance of the startup, to ascertain the pitfalls versus rewards that need to be considered before investing their hard-earned cash into their business idea, or borrowing money from somewhere.
Common problems why businesses fail in the first two years
- Improper financing of the business start-up, including accessing finance and/or not determining the correct finance needed. Add cash-flow to this problem.
- A lack of core skills to drive the business, i.e. lack of management skills, experience in supervision, fluid
- cash management, customer skills and technical skills, etc.
- Poor stock management and stock losses.
- Not finding customers for your products or services.
- Not keeping expenses down to a minimum, i.e. going for flashy cars, expense accounts, large premises,
- etc., especially in the early stages.
Pulling it all together
Someone once said, “Don’t put if off because it’s difficult; do it because it’s difficult.” It is this kind of positive attitude that will be needed, once you decide to start your own business.
Yes, the downfall could be huge, but so are the rewards, if you succeed in making it work.
This is an edited excerpt of Ian Minto’s book, Lessons From An African Entrepreneur, available in all good bookstores.