IN South Africa, where the unemployment rate remains one of the most persistent challenges faced by the youth, entrepreneurial enterprises are vital.
But being an entrepreneur can be tough, and budding business owners need all the constructive advice they can get.
Insurance company Santam provided a collection of 10 pearls of wisdom to help would-be entrepreneurs become successful. The insights were garnered from speaking to business owners who have made it through their first three years of business.
1. Have a solid business plan
Planning plays a crucial role in any business’s success. A business plan is a good place to start; define your skills and weaknesses, what you offer, how it’s unique, and how you plan on growing your offering. What’s more, try to prepare yourself mentally and practically for anything that could go wrong and how you would deal with it. For example, what happens if you get injured? What if clients pay you a month late? What if a weather disaster affects you? Or a trusted supplier goes bankrupt?
2. Prepare for financial challenges
Most of the 600+ small businesses interviewed in the start-up survey said cash flow was by far their biggest challenge. Deal with cash flow blows by saving for a month’s worth of expenses or by getting creative with how you lower your overheads.
You could offer clients a discount if they pay a deposit or the full amount upfront, or even an incentive – e.g. pay 10% less if you deliver your product or service a week earlier. Whatever you do, be extremely careful of debt – this is one of the biggest killers of small business success.
3. Be frugal – remember you’re a start-up
Resist the temptation to splash out on fancy offices, expensive equipment, and over-the-top marketing. Your company’s livelihood depends on what’s in your wallet, so every rand and cent must be triple-checked. Maintain a low overhead and manage your cash flow effectively.
4. Don’t be afraid to ask for help
There are loads of resources out there for networking, knowledge sharing, and advice. Networking is not just for new business opportunities; it can be a wonderful source of support and fresh ideas. Don’t hesitate to ask for advice from those around you – such as your intermediary, bank manager, landlord, or neighbouring businesses, or from online forums and Facebook community groups.
5. Put your faith in a trusted mentor
It can be a family member, former boss or colleague, or even a trusted online source or blog. A mentor is an invaluable sounding board – someone who’s been where you are; someone with whom you can have regular, non-judgmental check-ins. Successful business owners who have had mentors say they found them to have had a significantly positive impact on their businesses.
“My mentor pushed me beyond my biggest fears”, said Cooked Inc’s Mariam Jakoet Harris, who took part in the survey.
“It’s not somebody who will take over. It’s someone who’s going to nurture and help you.”
6. Marketing on a shoestring budget
Marketing your new business is extremely important, but it doesn’t have to cost the earth. Social media is your friend – creating your business page on Facebook is free and will help your online search ranking. So is submitting your website URL to search engines like Google and Bing – it’s completely free.
Also, keep an eye out for community Facebook groups – some will require a small advertising fee while others allow you to advertise your business on certain days of the week. The bottom line with marketing is to try anything and everything. You won’t know what will work for you until you try it.
7. Look after number one
Entrepreneurship is a lifestyle – the days of 9-to-5 are over. That’s not to say that you must work yourself into the ground. Exercise regularly, eat healthily, and find the time to relax or you’ll end up being less productive. Working on your time management skills will help you clear enough time in your day to spend with loved ones.
8. Build a team that shares your vision
It’s simple: great people make a great company. As your business grows, you might need to hire staff. Firstly, take the time to interview people thoroughly to ensure that they fit your culture and share your values. Secondly, it can be hard to let go but it’s important to learn how to delegate tasks. Finally, don’t expect people to be your clones. Be open to new opinions and suggestions. It’s always good to get fresh perspectives on old ways of working.
9. Never stop learning
Starting your own business is a constant process of growth and learning. It’s important to enrich yourself with both practical and emotional skills. Take a look at free or low-cost e-learning resources such as the Hubspot Academy, Udemy, and Inc.edu.
Sharpen your project or time management skills, learn a new software programme or teach yourself how to run your own social media campaigns. You can also work on your management, presentation, and motivational skills. If you travel a lot, podcasts and things like TED talks are great ways to inspire and educate yourself.
10. Safeguard your venture
The best entrepreneurs don’t seek risk, they seek to mitigate risk. Small business insurance is one of the best ways to look after your livelihood, and it’s more affordable than you think, Santam advises. Make sure that your precious stock and premises are covered in an emergency such as a fire or theft.