Your own business: 7 tips before you start
Having your own business often seems like the last thing. However, the grass is not always greener on the other side. It is important not to be blinded by the potential rewards. Do you have what it takes? You need the right skills, determination, financial backing, etc. There are also several serious and potentially fatal risks. The following tips act as a guideline before starting your own business:
- Make sure entrepreneurship is for you. Entrepreneurship is not for everyone. If you feel more secure in your comfort zone and are risk averse, chances are you are better where you are, there is nothing wrong with that. Entrepreneurship takes passion, a certain amount of risk-taking, and the motivation and dedication to be successful when everything seems to be going against you.
- tofromUnderstand the risks. Financial risk, including possible bankruptcy, is a real threat if things go wrong. Less obvious risks include social, professional, and psychological risks.
- Build a support structure. Having your own business can sometimes be quite difficult. The more support you have, the better your chances of surviving these times. It is worth making an effort to get your family and friends to be positive about the business.
- Get the right partners. It is often not advisable to start a business on your own (or even impossible). Good synergy between partners can dramatically increase the potential of a company. Unfortunately, many trade associations do not work and are often disastrous. Choose your partners very carefully and make sure there are legal contracts for any possible “divorces” in the future.
- Prepare diligently. Having your own business generally means a lot of work. This should start with a proper feasibility study and business planning. Is there a big enough gap in the market that your company can fill? As you do? How will it be financed?
- Be realistic. A new business is never just liquor and roses. It tends to take much longer than expected to break even and requires far more resources (especially financial) than is normally planned. Reflect this in your cash flow planning.
- Get expert advice. When you lack specific skills, it is much cheaper to pay for them up front than later when the business is down. The advice of auditors, attorneys, bankers, consultants, and other experts should be sought where appropriate.
Copyright © 2008 – Wim Venter
Leave a Reply