The past few years have seen unemployment rates climb to unimaginable levels. So it comes as no surprise that young people are now resorting to other ways of generating income, the most prominent being starting their own businesses. An entrepreneur is defined as a person who sets up a business or businesses, taking on financial risks in the hope of profit. Like any venture in life, preparation and research goes a long way in starting something new.
For any start up business a good idea is crucial. Developing a business idea can take a while. Having an idea is only half the work. An idea only gains economical value once its been successfully realised in the market. So you have to ask yourself a few questions before going forward. Firstly, what does the customer benefit from your product or service? Is your idea a solution to a problem? Sometimes entrepreneurs think of ideas that only benefit them without considering the larger population, after all you can’t be your only customer. The idea has to appeal to a larger group of people besides yourself. Secondly what is your target market? You need to know who will be interested in buying your product. And lastly how will your idea make money? Lay out a simple revenue mechanism of how the business will be generating its revenue. But don’t just stop there, run your idea through a plausibility check. That is run the idea past your friends, family even experts.
To ensure success, conducting market research is vital. This part overlaps a bit with the development of the business idea. Determining your target should be the next step after developing a business idea. You must always understand what your customer wants. Clearly define their demographics; age range, gender, geographical location, income classification, etc. You can never be too specific with this one. Doing your research should also include investigating your competitors. Know well in time what you are up against, this can help modify your idea to make it more unique. One way to do this is by reading customer reviews posted about your competitors. It’s a great way to know what the customer wants from the product. And lastly a good entrepreneur needs to understand the industry they are entering. If you are going to sell oranges for example, you have to know when they are most in demand, challenges faced by orange sellers, etc. It prepares you for what’s in store ahead.
It’s always advisable to go into business with a partner or a team of people. Starting a business is a stressful and time consuming process and having someone to help take off the load goes a long way. Partnerships can inspire great ideas, add another dimension to your idea and provide essential insights. A lot of young people make the mistake of going into business with their friends without doing a proper analysis of the situation. A good partnership or management team is made up of people who complement each other’s skills and strengths. Having two people with similar qualifications and experience go into business together is redundant, the other person brings nothing new to the table. A shared vision is also important among partners. Always be on the same page with your business partner, it will ensure smooth sailing. In some cases when most of the team members are inexperienced bringing in an experienced professional can be helpful especially within a specialised industry. For example, with a construction company an experienced engineer would be a huge asset to the business.
A business plan isn’t just for your consumption but also for potential investors, therefore it has to be done right. A good business plan is effective, structured, comprehensible, brief, user friendly and attractive. It should include a detailed financial plan i.e. cash flow calculations, profit and loss statement, balance sheet, etc. Not forgetting a SWOT (strengths, weaknesses, opportunities and threats) analysis and risk assessment.
No man is an island so you can’t expect to pull off a successful business in your first try without any help. Help and advice can come in different packages. One way is to identify an experienced professional to be your business mentor. They have been in in the industry longer than you have and will help you avoid making rookie mistakes. There is also lots of online resources available, some of which are free, take advantage of them. And lastly you can get help from your community. Different organisations are always running business trainings and workshops, don’t underestimate them. There’s a lot you can learn from them plus it will give you an opportunity to network with fellow businessmen.
Starting a business isn’t easy, a lot of people get frustrated along the way and give up that is why patience is a good quality for an entrepreneur. Although a successful business isn’t always guaranteed, employing some of the ideas above will nudge you in the right direction.