Let’s Talk Business
We all value the chance to be self-employed, and many have considered starting their own businesses. Besides the returns it attains you, when you see past the huddles and stumbling blocks, that’s where the real financial freedom is. Most entrepreneurs, unfortunately, start off business without considering the major points that have helped others succeed. Below are five steps that will set you on the right track to starting your own business and getting it successful.
Look for that missing piece of the puzzle Sometimes the inspiration for business ventures comes from what’s around you--or from what isn’t. The lack of nice restaurants in your business area might mean that all those people working around there have to trek across town for lunch. Now that is the piece of the puzzle you are looking for. Investing in a restaurant or even a food delivery business would be a step in the right direction. Wouldn’t it be great if you could get some good food delivered?
The lesson? Always, there is something missing in your corner of the world. But, only a select few--the entrepreneurs--do something about it. It may be cliché, but it’s true: where there are problems, there are opportunities. Be alert, notice the opportunities around you, and seize those opportunities.
2. Plan ahead
Now after you have got the inspiration from step one, what next? Write a business plan. Most entrepreneurs argue that a business plan saves you from undermining ideas, and over estimating the potential of other ideas. In short, it gets you organized. You have a lot of ideas in your head that need to be put down on paper. A study carried out among more than 800 people showed that writing a business plan increases the chances that you will actually go into business two and a half times more than those who don’t write their plans. .
Business plans includes researching markets and preparing projections, which is valuable in itself, and also increases the chances that an entrepreneur will follow through. And if you want to get funding from banks, or capital venture agencies, a business plan is required.
3. Value your business
Unless your start-up capital is coming out of your own pocket, someone will have to value your business. Be prepared for a reality check: If investors say your start-up is worth 2, 000,000 Francs, then that’s what it’s worth. The purpose of valuing up your business gives you a clear picture of what exactly you are dealing with; are you able to raise the start-up capital? How much do you need to borrow to successfully start your company and sustain it? Are your income projections realistic and attainable? Have you over valued your assets, so that in case of a bank loan your assets are worthwhile security?
If you are going to be successful, you will have to start managing your finances properly from the very start.
4. Find the right location
Those who have dealt in real estate will tell you that in business, there is nothing more important than location, except, of course the original idea. Location gets you noticed, location sells, location equals money. “In business, it’s said that the three most important decisions you’ll make are location, location and location,” says Irene Dickey, a lecturer in management and marketing at the University of Dayton’s School of Business Administration in Dayton, Ohio. “Careful determination of new sites is critical for most retail and consumer service businesses.”
While you’re at it, look for competitors. Interestingly, the best place to be is as close to your biggest competitor as you can be. By being in close proximity to your competitors, you can benefit from their marketing efforts. This is good for small start up businesses, especially those dealing in retail.
5. Find your first customers
Your first customers are key--and not just because they’re turning on the revenue taps. They also legitimize your idea, demonstrating that there actually is a market for your products and services. They’re also a source of valuable feedback that will help improve your business so more customers keep coming in. Don’t overlook the opportunity to ask if you can turn some of the positive feedback into testimonials.
Where do you find your first customers? The answer varies somewhat based on your industry, but one common strategy is to leverage your personal and professional contacts, and their contacts. Those could include former employers, employees and customers, contacts within your civic activities, such as Rotary or sports club, and tradespeople and professionals; anyone you know is a potential customer, or link to a potential customer.
Consider sending each one a personal letter, then follow up with a phone call a week to 10 days later. In this letter, announce your new business and offer something, such as a free consultation or a special discount, or even a finder’s fee for any referrals they send your way.
Now that you have your first customers, how do you retain them, get even more customers and grow big in your market?
The writer is a business consultant working for Maisha Consults Ltd, a Management Consultancy firm specializing in Management and Human Resource services