When setting ideas in motion and deciding to start a business, most entrepreneurs don’t really know where to start. Every year, hundreds of thousands of South Africans take a leap of faith and start their own business. This path requires a lot of hard work, dedication and commitment and unfortunately many end up failing. But for those businesses that survive, the rewards of entrepreneurship far outweigh the challenges they face on the road to success. It is said that entrepreneurship is living for a few years like most won’t so you can live for the rest of your life like most never will.
Darlene Menzies, CEO of SMEasy offers some guidelines to consider before starting your own business.
- Taking a leap of faith: One of the most important characteristics of successful entrepreneurs is courage. When it comes to starting a business some people need the courage to let get go of the security of a monthly salary and the benefits of employment, others need courage to put everything they own or have saved on the line and for some it’s finding the courage to take the leap even when their family and friends are not convinced. There is never the perfect time to start your own business and you may never feel 100% ready but once you have considered every aspect, have done your planning and preparation then the only thing left it to find the courage to go for it!
- Registrations: On the practical side, entrepreneurs who want to start a business need to be aware of the various business registrations required in order to trade. These include getting your business name approved and registering your business with the government department called CIPC (Companies and Intellectual Property Commision) – cipc.co.za. This CIPC registration includes automatic SARS registration for your Company’s Income Tax number. If you will be paying yourself a salary or you employ staff you will have to register for UIF and Workman’s Compensation with the Department of Labour. These are the basic legal registrations required when you start a business. It is also helpful to register a domain name so you are able to create email addresses and a company website.
- Startup capital and access to finance: Funding is a major challenge for many entrepreneurs. According the 2015 Ventureburn Startup Survey, 56% of startups are self-funded and 11% borrow money from friends and family. If neither of these resources are available to you, using a free product like Finfind to secure finance is your best option. Finfind is a unique product that enables business owners to understand and identify the best finance solution for their needs and includes tools which will help you to check your financial readiness, get small business advice, learn about access to finance and find lenders. For more info see sanews.gov.za/business/access-funds-small-business-click-away
- Budgeting and cash flow: Having enough money to meet your expenses each month is critical for every business. Well managed cash flow is the lifeblood of your business and is important for survival. How can you ensure that you will have the resources available to fund your business if you don’t do a budget to understand your cash flow needs at the start? By committing a budget to paper, your chances of success are far greater as you are able to plan for all your future needs. To set yourself up for success from the get go, choose an easy-to-use system that helps you stay on top of your cash flow. Something like the awarding SMEasy – an online accounting and small business management software package especially developed for start-ups. Check out – https://www.youtube.com/watch?v=qtHhlq_rlns
- Getting your name out there: Marketing and advertising play a huge role in ensuring the success of start-up businesses. Marketing, even if it is simply word of mouth advertising, is crucial to attract new business and ensure that you establish your footing. Put time aside to think about and define your brand (who you are, what you do, why you do it, etc.) and also to understand your target market (who are you selling to) is very important. Once you have done this you can then decide what the optimum marketing strategies are for you to implement to get your name out there, taking into account what you can afford of course.
Starting a new business is an exciting journey and as with any journey, there are often unexpected challenges to overcome. Give comprehensive consideration to these five critical factors to help you to plan for success and avoid failure. Success is where preparation meets opportunity. Prepare well so that you are well positioned when doors of opportunity start to open.