Business News of Wednesday, 30 May 2012
Source: Fekpe, Charels Kofi
By Charles Kofi Fekpe (ACCA, CFE)
I got an email a few days ago from someone I didn’t know, a young man from a west African country. To me, I considered him half successful when he said in his email “I am a young graduate and I want to start my own bakery instead of chasing non-existent jobs”. His email was asking me for business advice on what to consider in starting his own business. I was touched, not only because he recognized existing frustration in joining the nine to five rat race, but because of the realization that if he got good advice, he “could” be on his way to building a good business for himself. Good, unbiased and practical advice is what I gave him.
There is no doubt, many more graduates like him. Some may never visit my website www.cfekpeconsulting.com to send me an email nor read my book “Diamonds in Eden”, but chances are that they still need the kind of advice I gave my new friend. The purpose of this article is to give some very simple guide, on venturing into your own business. It’s called Entrepreneurship. It may not be as fully comprehensive as a text book but at least I trust it is practical enough to yield results.
For many school graduates in mother Africa, entrepreneurship (or starting a new business) may not be something we are familiar with. That’s fine. It’s mainly to do with the cultures we were raised in – although it isn’t helping us in this era. We were mainly made to understand that studying hard, getting good academic grades and eventually getting a good job was the way to succeed. And that’s the limitation. So in the event that we didn’t have good education or we had one but couldn’t land a good job, then it becomes clear, we’ve missed our success in life. The sad sad truth is this – neither our educational nor cultural systems give us the preparation or the boldness to venture into unknown territories in the event we don’t find “the perfect job”. It’s alright. Now is the time to face realities and move forward with your life. It’s your life.
Let me spill a few truths to help you put into perspective the absolute NEED for you to start considering starting your own business. Firstly, inflation and unemployment is always going to be around and 99.99% of employees never decide what rewards they are paid for the use of their intellects and energy. As a business owner however, you keep everything earned from your efforts both mental and physical. Secondly, if you are thinking about flying abroad to Europe and the Americas, after graduating, then think again – the economies of these western countries are getting tighter and they really are NOT too excited having to accept more immigrants because their national resources are shrinking. Thirdly, if you think you want to do another course or study for another degree, that’s a good thing but hear this too – employers need to make money, so they are not looking for intellectual kingpins with many degrees; they are looking for people who have the drive and innovative attitude to effect positive change to their profit margins – and there are people like that with not so many degrees or qualifications. Lastly and this is an excellent reason – you can start your own business whilst being employed or whilst still in school. Don’t be lied to. You see, in the past, it used to be those who had a lot of money make more money. I don’t dispute the fact that money is very important in starting any business but in today’s world – real money is the knowledge, the idea, or the solution you have, that can affect the lives of people positively.
Let’s start from here. I understand that starting a business can be a very daunting thing to think about let alone venture into. The weight of it can be so stressful for some people that they wouldn’t even dare dream about it. Others will think about it for a few days, weeks, months and then forget all about it. They may revisit it some time again in the future or just sit back until someone else produces the same product or service; then you hear them complain “Ah I thought about that idea first”. I went through the same phase, so be rest assured, its normal. However, if you are serious about being successful, then you should go ahead and start a business. In fact you can. Take a look around you; you don’t have to look far to see some very successful entrepreneurs. Some you know, some you don’t. If you think about it further, you just might realize that your condition now, is a hundred times better than theirs when they started in business and yet they made it in the end – that should be an inspiration to you too. You can make it; you can have a successful business – if only you are willing to start. If you say you can, then you will and you are right. If you say to yourself you cannot; then you are right too – you won’t succeed.
So how do you start? Well, we are all different people and so we may not all start in the same way, but let me share a few ways a real business can be born: 1. You could start by expanding an idea for a service or product that you have identified is of need but that is currently not available. You could invent a product or a service 2. You could consider providing a service based on your qualification and/or experience. This is just like cutting out an employer and providing the same services directly to clients which you would have provided if you were employed anyway 3. You could develop an idea from a problem you are trying to find a personal solution to. It’s called “scratching your own itch”. Most good business started this way. Thomas Edison was tired of the dark and in trying to solve it, he invented the electric bulb. Think about a product or service you are always unhappy about. Chances are that you are not the only one unhappy with it, but the question is, can you find a solution? If you could, you may have just found yourself a business 4. Another way to consider starting a business would be to look around you; there may be everyday products or services that you can re-invent by changing the way it is produced, the way it is delivered or presented or packaged. For example in the past, drinks used to be delivered in bottles until someone came up with the idea of paper packs. The food market for example in Africa has huge potential for how food is delivered or packaged, and so are many other things. Beads for example that used to be only worn by the elderly in African society are becoming fashionable as part of earrings, bracelets etc. – simply by re-presenting them differently 5. Another consideration will be to buy into a Franchise – these are already established and well known businesses that you feel will be welcome in an area but are not yet established there. You could buy the right to operate such a business in a chosen area. Advertently it involves a big upfront cost and you can’t run such businesses with your own systems. Things have to be done as specified by the franchisor, but at least you don’t have to market yourself too much considering it is an already established brand. 6. Finally, in the kind of technological world we are in now, you could set up an internet business. The easiest form of this is to sell on the internet – and it could be anything. From intellectual assets or experiences which could be turned into online books or videos and placed on the net for people to buy without any physical engagement or merely selling products from your country that you believe the rest of the world needs.
The list above is certainly far from exhaustive (and neither is this article) but the idea is to set you on a path to trying your hands at something. It will be worth it, believe you me. Once you start, and realize the excitement of actually doing something for the first time. You’ll gain inspiration no one else can give you.
Once you have established exactly what it is you want to do, here is a list of few things you should consider before going live as a business. Before I list them, let me say this – You don’t need to start off immediately as a registered company located in a storey building with employees etc. If you can manage it, start from home – that’s where many businesses have started. It really doesn’t matter. Someday, the business itself will decide and have money enough to pay for where it wants to be located. You can start considering the following things:
• What’s the name you want to be called and what do you really want your business to stand for. Write it down in one sentence of not more than 10 words. Not more. • The product or services will you be offering and how will they be delivered or packaged to customers. • List in detail all the things you'll need to make the business work; • I suggest you try and specialize in two or three things. A lot of people try to do too many things at once and in the end, their business is never well known for any particular thing. Years down the line you want your business to be well known for something. What will it be? • Identify logistical and other business-related problems you are likely to encounter and start thinking about possible solutions; let your imagination run wild here • Start developing innovative (new) marketing strategies or ideas that you'll employ to sell your products or services. Ask yourself, how do people in your proposed business currently sell their products or services – ask now, is there a way you can sell it better? You don’t have to follow the crowd. • Start thinking about how you will fund the entire project. Who will support you? Is all the money ready immediately? Will it be ready in stages? Family is always a good place to start, because at least you wouldn’t have to pay interest. Some may be willing to give you the start-up money for a share in the business. It may be worth it so, negotiate it. • Consider who are the likely competitors in the industry you will operate in. What are they doing now? Can you match and go past their competition? How do you intend to do it? • Now, think about worst case scenarios - as many as you can think of and start asking yourself how you'll deal with them. Will they (if it happened) end the business? Or there are ways around them. • Lie back, relax, and imagine to yourself what the average day in the life of your business looks like; now consider what a week will look like, then a month. Did you notice any gaps that need thinking about? • How will you get your products or services to your potential customers? Yes HOW? • How much do you think you will be making from your business per day, per week, per month, per year? How much will you be spending? Be conservative and don’t forget there is inflation – do you think you could be making a profit in the long run?
It’s not all going to be rosy and anyone who tells you it will is setting you up to be miserable along the way:
1. You’ll make some mistakes and encounter some failures – see this as a learning opportunity. Ask yourself what you've learnt from such an experience that you will not repeat in the future. There’s always a lesson to learn. Only when you do not learn from such mistakes does it become a failure.
2. Your own business involves work. You can’t afford to be lazy. Some people think (very wrongly) that once you own your own business, you wouldn’t need to wake up at 7am in the morning anymore. It’s untrue. If you own your business, you will be waking at 6am instead. Until your business is established and smoothly running, you can’t afford to play lazy. If you are willing to be disciplined enough to go to work for someone, you should be disciplined enough to work for yourself.
3. In addition to the above, don’t throw away your intellect. You have been to school, you have acquired knowledge – don’t throw it all away simply because you are not someone else’s employee. Understand that you did not go to school for someone; you went to school for you. So when you start your own business, apply the knowledge you have acquired to your business; it is not waste. The truth is, if you don’t have your own business, you will use the same intellect to make money for someone else, so what’s stopping you for using it to make your own money?
4. Finally, be disciplined with your money. It’s your money, but do remember, if it isn’t managed well, you will surely fail. Save as much as you make. A good rule is to give 10% of your earnings out to charity or as tithe if you are Christian. The business is not just physical, it’s spiritual too. Invest with the future in mind. If it is feasible buy Assets that tend to appreciate in value; get some good advice, invest in land, buy stocks, re-invest in the business... do all that but DON’T just spend it.
Most people, when they think about success, think money. That’s just part of it. I am not saying money is NOT a good reason to have a business but think about it – How would you feel, seeing your business idea come to life, people are using your products, what used to be a small idea in your mind has become a household name. Think about the people your business could employ and the fact that you could actually be inspiring someone to also make a difference to their own life. Think about the respect, the financial freedom and security in not having to think about redundancies and being sacked from work. Think about the legacy you’ll leave your children. You will not only leave them a business but most likely a name to be proud of. Think about all of that and more that could happen by just starting and persevering in running a successful business.
As I said from the start, this article may not have been as exhaustive as a whole book would, but I trust that I have been able to put you on a good path to starting your own business. I am certain with some enthusiasm, good practical advice along the way and a desire to succeed you should also in your own way, turn what may simply be an idea into a successful business.