Archive
team
Last on the pre-business list is Team.
Many entrepreneurs the world over, got themselves burned out, or simply gave up before their bright ideas could reach their full potential, because they thought they could do it all on their own. Human beings are social creatures; we’re not built for isolation. You can’t succeed on your own. You need, at least, one person in your corner.
As an entrepreneur, you need a support system – people who can and will encourage you, people you can draw strength from, people whose faith in you keeps you going. This support system can be your family, friend(s), mentor(s), partner(s), spouse, team, or all of the above.
A team is unique. It could be made up of family and/or friends. Most entrepreneurs are very reluctant to bring people on board, because they could be swindled by them, or become problematic/more trouble than they’re worth. Those are possible scenarios and very valid reasons, that’s why the kind of people you pick is necessary. Notice I said “you pick”, that’s because you do the picking, not the other way around. You should pick people who share your drive, share your passion, and most importantly, share your vision.
Once you have like minds working with you, you have people you can bounce ideas off of; people to brainstorm with; people to take on the world with; people who can do certain things better than you can; people moving your business forward by investing their contacts/talents into it; people who push you to be better, people who build, inspire and motivate you; people ready to go the distance with you. That is a team!
cash
Next on the pre-business list is Cash. It is the blood of the business; hence, essential to its survival.
Cash refers to the money coming in (revenue) and the money going out (expenses). To be successful, your expenses should never be consistently more than your income; luckily, this is actually manageable as it is pretty easy to determine and control [to an extent] your expenses as they would most likely be recurring (fixed/overhead costs or operational expenses) – utility bills, rent, salaries/wages, new inventory, and so on.
You don’t necessarily need money to start, but to grow and expand, you need money. Money can come from family, friends, grants, angel investors, partnerships, bank loans, or venture capital. If you’re seeking investment, you should seek in that order.
Before seeking investments and venturing into business, you need to, first, be disciplined with your personal finances. If, for example, you’re a spendthrift, and you don’t get your spending under control, you will bring that weakness into your business; before you know it you’re taking funds from your business is offset personal debts, and it’s a slippery slope from there.
Disciplined people work with budgets, so if prudence is a challenge for you, or you’re prone to it, you need to create a budget. A budget is simply creating a balance between your income and expenses, so you don’t spend more than you earn. A good budget has income portioned primarily into bills (phone, internet, power, water, heat and so on), groceries, savings, transport fare/fuel for vehicle and/or generator (gas/diesel), clothing, and miscellaneous (birthday cards, gifts, medical emergencies, repairs and so on). Everything has to be properly planned such that there are no constraints.
Beware, it is one thing to have a budget, and quite another to follow it. The true discipline is sticking to it long-term, and adjusting it as you see fit as income increases/decreases or responsibilities increase/decrease.
As soon as you’ve mastered making and following a budget, you can apply the principle to your business. However, this time, the budget will be called an Income Statement. Remember to ensure your expenses don’t surpass revenue too often, or it will be RIP business venture. Once you can maintain cash flow and steadily increase revenue, while keeping expenses low, you’ve begone to make a profit. You make enough profit, you can start repaying loans, and reinvesting into the venture. Now, you’re in business!
entrepreneurship 101
Every time I’m invited to give a lecture, or speak on entrepreneurship/starting a business, I have an outline I usually work off, and then, I give illustrations the audience can identify with to expatiate. Today, I’ve decided to share that outline for the benefit of those whom I may never have the privilege of speaking to (physically or virtually); at least, my words/writing may exceed/extend my reach.
ENTREPRENEURSHIP
Entrepreneurship starts with a need, and then, an idea on how to satisfy that need.
Entrepreneurs are people who identify a need and work towards satisfying it, or improving upon an already existing business concept. They provide products and/or services to satisfy specific needs while making a profit.
Entrepreneurs need to be POP – Passionate, Opportunity-Seeking, and Persistent – in order to be successful.
• Passionate: Passion is the intense love you have for and the satisfaction you derive from what you do. If ego, family, or money is the only reason you decide to become an entrepreneur, entrepreneurship may not be for you. A lot of times, it is only the passion for what you’re doing that keeps you going.
• Opportunity-Seeking: You have to develop the ability to see the favorable chances/uses for your product or service everywhere.
• Persistent: Don’t get easily discouraged. Be prepared to hear “no” a lot of times before you get a “yes”.
SMALL BUSINESS
A small business is any business one plans to start, or an idea one plans to introduce to the marketplace.
Any entrepreneur can be a business owner, but not every business owner can be an entrepreneur. This is because an entrepreneur is unique in his/her approach to business.
If you fail to plan, then you plan to fail; 30% of small businesses fail after two years of business because they had no business plan – not enough research/planning, little funding, poor management, and/or no adaptive measures.
BUSINESS PLAN
A solid business plan is the foundation for any successful business.
A good business plan has an executive summary, company overview, marketing plan, operations plan, financial plan, and sometimes, a customer service plan, funding plan, and networking plan.
A business plan gets you funding from investors, not a business proposal.
PRODUCT OR SERVICE
Unique Selling Point (USP) is the mark of distinction of any business. It is what separates your business from current and prospective competition. It generally should focus on FAB (features, advantages, benefits), not pricing.
TARGET MARKET
Never make the mistake of assuming your products or services will appeal to everyone. There is no such thing.
Your target customer is the person or business with the highest probability of buying your products or services – primary (high demand for your products/services), secondary (needs convincing to buy your products or services) and invisible (never considered would require your products or services).
COMPETITION
Your competition is the person or business who offers the same products/services or benefits, as perceived by your target customers – direct (offers the same products/services), indirect (offers the same benefits), and invisible (has the capacity and desire to offer the same products, services or benefits).
Competitive Intelligence is the process of learning, collecting/gathering and using information about your competition for the purpose of growing your own business.
FINAL WORDS
Know when to move on to the next idea. Entrepreneurship isn’t just about the idea, but the execution of the plan.
Always refer back to your business plan, and update it as your business evolves.
Funding options – Family, Friends, Grants, Angel Investors, Partnerships, Bank Loans and Venture Capital.
You cannot do it all alone – build a team or support system (family, friends, partner etc.)
Customer satisfaction, not money, should be your primary goal.
There will be good times, and there will be bad times, but it’s an exciting journey. Enjoy it.
There are no illustrations, but I do hope this makes a difference in your business life. All the best!
suc
As promised, I’m resuming with the pre-business list, and next up is Start Up Costs (SUC). Start Up Costs is basically everything your business venture requires to get up and running. If you’re a serious entrepreneur, it will be a part of the Financial Analysis section of your business plan.
I’ll segue here, just in case I haven’t previously emphasized the importance of a business plan. It is absolutely crucial. It is your road map, and possibly one of the most important documents you will ever own. A good business plan should have an Executive Summary, Company Overview, Market Plan, Operations Plan, Financial Plan, and Corporate Image Package (CIP). The Financial Plan should consist of the balance sheet/personal networth statement, start up costs (SUC), revenue model, projected income statement (profits and losses), and projected cash flow/projections (monthly, 1 year and 3-5 year projections).
The Executive Summary and Financial Plan are the two most important sections any investor worth his/her salt would want to inspect first, more so the financials. Therefore, do not make the mistake of educated guesses or guesstimations; not only will that reduce its credibility, but you will grossly underestimate what is required, and consequently run out of money. Hence, when preparing your SUC, you have to really take the time to think everything through, make a list and do your research on the costs/prices of the requirements.
Generally, your SUC should basically center around current assets (like cash-in-bank, and inventory) and fixed assets (like equipment, and office space). By way of example, a standard SUC sheet should contain: furniture – abc amount, internet/telephone set up – xyz amount, consultation/license fees – abc amount, desktop computer/laptop – abc amount, car/van – xyz amount, and so on. You should even list assets required that you already own and their current values., as well as prepaid expenses, like company registration fees, and so on.