Top 10 tips for starting your own business

Starting a business is no easy feat, and if you’re toying with the idea, it may pay to know some hard truths before you begin.

Zac de Silva, founder of business advisory firm Business Changing, says be prepared to work at least three years without a decent pay cheque and spend between 50 and 80 hours per week working on the venture.

He says it is a good idea to operate the business on the side for some time to see how it performs before jumping in with both feet and quitting your job.

De Silva, who has advised more than 1500 business owners over the past decade, says would-be owners should be prepared to earn the likes of $2 an hour for the first few years.

“Understand your personal whys – why you want to go into business in the first place. I think if you understand that then that gives you a much higher chance of being successful.”

Passion, perseverance

Ask anyone at the top of their game in business, they’ll tell you it hasn’t come without its hurdles. Being in business is hard work, and part of the journey is overcoming the obstacles and challenges that pop up along the way.

Perseverance – and passion – is key, and you’ll need a lot of it if you are going to jump into the world of commerce.

Passion is what keeps you going in the start when there is often little money coming in, says de Silva, adding that its good to have a pool of money in place you can dip into as you may need. “Make sure you have a bit of a runway to see you through six to 12 months or more of earning not much, if anything.

“The life of a business person ultimately can be incredible but nobody has it coming up all roses on day one. Be prepared to make big sacrifices. Make sure that your mental health is in a good space when you start up as you are likely to have some ups and downs as you grow your business.”

As Cromwell-based business owner Zoe Wood puts its: “Running a business can be overwhelming and sleepless nights come with owning your own business, but if you put in the hard work you do eventually see the reward.”

Don't do it on your own

Having staff around or a business partner to bounce ideas and challenges off is always beneficial.

De Silva says having the right people around you makes a big difference when it comes to success and failure, whether they are fellow shareholders or part-time employees or even a mentor. “What skills do you personally have and what are you missing? Who can help you here? You need to launch a business having good all round skills otherwise you might come unstuck if you have not considered some key parts.”

Conduct market research

Is there truly a need for what you want to do?

The starting point for any person keen on starting a venture is to do research before committing to the cause, says de Silva.

“Such a high proportion of new businesses fail as there is not an adequate point of difference or a huge need for what they offer. So why should customers truly want to buy from you instead of an incumbent? And if your idea is a truly new offering, you need to talk to more than friends and family as friends and family are often enthusiastic to your ideas because they like you and they want you to succeed,” he says.

“Get a cross-section of people, and a ‘doubting Thomas’, or three, is not a bad thing – you want a great cross section of views from your potential future customers.”

De Silva recommends that you conduct research and real in-market testing before leaving your job to focus on the venture.

Business plan

Have a solid, well-thought out sales and marketing plan.

“You cannot just open and expect to get customers flocking to you,” says de Silva.

“Make sure that you have a well thought-out sales and marketing plan. Likely it’ll be on a tight budget but you can still do things to get in the face of potential customers. You’ll need to get creative and lateral and you might need a hand from an expert.”

Have you considered your business model? That is how are you going to make your money? Have you built enough margin into your offering? Can you make your price a bit higher?

These are all important questions you need to have thought about, he says.

“You might start as a technician who wants to go into business. That is fine for starters, but unless you start to build a business, you end up buying yourself a job with more stress than just having a job. The power of having your own business apart from more flexibility and being your own boss is to actually build a business.

“A real business is one that lets you step away from the day-to-day work required to earn money. This will be a gradual but is a great reward if you are able to make it come to life, and this is hopefully one of the reasons you want to go into business in the first place.”

Look the part

De Silva believes a business needs to look professional to be taken seriously as a business. Your age and experience doesn’t matter, but the professionalism of your product, service and digital footprint does.

“So many startups due to limited budget have a poor website and their brand looks average at best. Beyond creating a fantastic product that meets the needs of your potential customers, I’d be suggesting putting a decent amount of money and effort into looking good online,” he says.

“Many of your eventual sales will start from people Googling your keywords. Make sure you are well set up on day one also for being found on Google.”

Use technology

If you are the only person working on the business you will only have 24 hours a day seven days a week, so you need to be careful how you are spending your time, de Silva says.

Getting technology set up well can save you an hour or two per week, which frees time up to focus on important things to make the venture a success.

“Be really careful not to waste too much time on aspects that are low-value or can be outsourced to technology or other people.

“Technology can make you more efficient, which is very important given you only have so many hours in a day. The other thing is you can really add to your customers’ experience by using technology really well.”

De Silva said technology can also make you stand out from your competitors. “It can make a difference for your time and can definitely make you stand out with customers.”

Take risks

Risks can be good – if they are calculated and well-thought out.

“You are a risk taker going into business because nobody can be sure that the business is going to pay off.

“Make sure that the risks you take at the early stage of business are not going to effectively take all your cash. Taking risk is important, but you’ve got to make sure you are protecting your bank balance with what you’re taking risk on,” says de Silva.

“You get great return from great risk but you can also get great pain.

“Have someone to chat through risks, whether it is a mentor or someone you really respect and is good at business; run the risk through them and get their feedback.”

As you go along in business and you build up your bank balance, that’s when you can take on more risks, says de Silva.

Ask for help

Don’t be afraid to ask for help when you need it and to engage with experts or people who have been where you have in the past.

Having a mentor or business advisor is critical to success, he says. “No single person going into business knows everything.

“You might know 90 per cent of what you need to do to be successful in your industry, however, that last 10 per cent you might get from two or three other people that you have chats with – that could be the whole icing on the cake,” de Silva says.

“Mentors help you work out how to be truly different and where to put your money.”

The more chats and advice you can receive from people you respect, the higher the chance of success, he says.

Expect delays, budget blow-outs

Delays are inevitable. De Silva says he has never seen a start-up launch on the initial date they set many months in advance during the ideas phase.

That is why you need to conserve your cash for as long as possible as every day or week delayed is longer with no cash coming in from sales, he says. “No matter how well you plan, it is quite possible other people you rely on to bring your business to life who will let you down, so bank on it and build several weeks of buffer up your sleeve.

“Budget blow-outs will happen. Guesstimates when you are identifying how much it will cost to set up are just that – estimates. There will be costs to set up to get trading that you will forget. There is no set extra amount you should build in and it does depend on how good your due diligence is and your common sense is when you set your initial expected cost budget to set up business.”

As a general rule of thumb, de Silva recommends that business owners should expect that they will need 50 per cent more than they think you need. “That will give you a bit of wiggle room when anticipated costs come in higher due to you under estimating and help alleviate potential cashflow pressure.

“Just like doing a building project, it often comes in a decent amount more than you expect – it is likely setting up your business will be similar. Having an unspent cash buffer in your overall budget will save you a lot of sleepless nights.”

Know your motivation

Being passionate about what you are doing and why you are doing it will get you through the tough times you will inevitably face as you venture on your journey in business.

Pablo Lemos, founder of health food business Riversea Trading Co, says if you have passion for the business idea you want to start then go for it, but always “make sure you have reasoning behind the business” – it will help you from straying off course.

Source: Read Full Article