In this day and age it is becoming very difficult to rely on your salary alone. Life is just becoming more and more expensive each day. So you have decided to start your own business but don’t know how to go about it, I know the feeling because I’ve been there, but don’t worry, I got you. Hopefully after you are done reading this article you will have learned one or two things about starting a business. So let’s get into it.
Coming up with an idea is the first step. It is the first milestone in the process of founding a business. So what really is an idea? Well an idea is a thought/collection of thoughts that generate in the mind, an impression, notion or concept that can be used to make money. The key stumbling block to entrepreneurship is not necessarily funding, but the lack of recognition of the importance of the “idea” in the funding and development model. Without an idea of a viable business, the entrepreneur has no way to proceed, hence before funding considerations, the idea is key.
Where to get the ideas
One particularly important source of new venture ideas and entrepreneurial opportunities may be entrepreneurs’ social networks. Social networks encompass all of the people an individual knows i.e. family members, friends, business. An entrepreneur’s social network can help by expanding the knowledge and information levels of entrepreneurs. This can lead to the identification of more ideas and the recognition of more opportunities.
The reality of commercial endeavor is that it is fraught with risk, and the chances of failing are high. However, the learning and insight you gain from a failed endeavor could very well prove to be the elements that increase your chances of success in the next venture. Other sources of ideas include The Net – web surfing, Travel and brainstorming. Learning and insight from a failed endeavor, Social networks, Family members, friends and Business associates.
When is an idea an opportunity?
Many aspiring entrepreneurs think that the key to a successful startup rests with having a unique one of a kind idea. A good idea is a necessary starting point for any new business but ideas are not scarce commodities. What is rare, on the other hand, is the ability to execute an idea and turn it into a profitable business. That’s why so many startups fail year after year. An idea is nothing more than a tool in the hands of an entrepreneur. An idea has no substance and in order for it to be an opportunity, someone must recognize it and take advantage of it.
An opportunity occurs when the right person is at the right place, with the right skills, at the right time. Therefore it is important to evaluate a business idea before implementing it. An entrepreneuer should ask ,
- HOW FEASIBLE IS IT TO GET A CUSTOMER BASE?
- DO I HAVE A SPECIAL ADVANTAGE THAT I CAN LEVERAGE?
- IS THE IDEA ECONOMICALLY FEASIBLE?
- WILL I GET A SUFFICIENT RETURN ON INVESTMENT?
- WHO IS MY COMPETITION?
- WHAT ARE THE COSTS ASSOCIATED WITH IMPLEMENTING THIS IDEA?
If you are satisfied with the answers then you can go ahead and establish a team to work with.
It is difficult to clap with one hand. It is a myth that an entrepreneur is a lone hero. Successful entrepreneurs built teams. A team can be two or more individuals. These Individuals should be present during the pre-start-up phase. It is easier to fail when you are working alone than when you are working as a team. Most successful new ventures are started by teams.
A team can be current and former colleagues, friends, relatives, family members, providers of finance including banks, potential suppliers. They should be people you like or feel comfortable with. A team is important because they will help you in resource mobilization, provide mix/depth of functional skills. There is diversity of perspectives, they are important for sharing of duties, responsibilities, work load, accountability, social and psychological support. Also investors want to know the team.
A Business requires significant resources, not only money and materials but also time, energy and commitment. Capital is determined by the minimum set of essential resources. Resources include sources of financing (lines of credit and investment capital), networks of contacts who can be called to contribute financially, Expertise and a Business Plan.
The Business Plan
The business plan should be written by the business owner. It is your leadership that delivers the results of your business plan, therefore take ownership of your business plan. You can get help from a marketing specialist, a skilled writer and advise from financial information specialists. You are better placed to convey the vision and mission as the leader, you should not be out seeking investment until you have a solid business model.
Financing the Business
Entrepreneurs use their creative talents to secure necessary resources to start their businesses. Most start-up funds come from an entrepreneur’s personal resources; however, there are other common sources of funding such as banks, finance companies, investment companies and government grants. One of the unique talents of entrepreneurs is finding the resources to launch a business requires the understanding of: Short-term needs, those associated with activities not part of normal operations and Long-term capital needs, relating to preparation for future growth.
Most entrepreneurs get their businesses started by bootstrapping, operating a business as frugally as possible and cutting all unnecessary expenses, such as borrowing, leasing, and partnering to acquire resources. Bootstrapping involves: hiring as few employees as possible, leasing anything you can and being creative. Bootstrapping entrepreneurs can also ask suppliers to allow for longer payments terms, ask customers to pay in advance.
So this is a rough blue print on how to go about starting your own business. I hope you will find it very helpful as you start your entrepreneurial journey.