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An Inside Look At the Life of a Business

Before you follow that dream, understand the four phases of a business lifecycle.

Nicolene Schoeman-Louw

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Every business goes through a life cycle, namely the idea, start-up, building the team and return on investment.

Business Life Cycle

1. The idea

The business idea or concept in this context involves the product or service you intend to market and sell.  This should be combined with the values of the business owner, as this is the only way in which to instil an organisational structure ultimately associated with the brand of the business when it has expanded or grown.  This will always constitute the reason for wanting and aspiring to having a return on investment (phase 4).

2. Start–up

In order to start the business, access to funds are required. This can be done either by way of accessing your own excess funds, lending from family, friends or from a financial institution or alternatively finding an investor. In either instance the business owner must believe in his/her idea or concept and instil this confidence in the lender or investor and eventually in the consumer.

The business must therefore also honour its agreements. It is therefore important that a business plan and the relevant legal documents and agreements are put in place when concluding the financial arrangements. In addition cash flow and marketing strategies must be implemented to facilitate business growth.

3. Building the team

This entails not only hiring employees but also engaging with suppliers and stakeholders (including shareholders in the company structure). Not only should these needs and positions be filled strategically and with proper purpose, but the necessary legal provisions also be put in place.

For example, implementing employment contracts, grievance (employee complaints) and disciplinary procedures in addition to policies regulating facility use (telephone, internet and other supplies). This is essential in setting trends of acceptable and unacceptable employee behaviour and also instilling the values and culture of ownership (phase 1).

As for suppliers, the appropriate service level and confidentiality agreements (to protect valuable information suppliers such as IT specialists are exposed to). Finally, stakeholders such as BB-BEE transactions and shareholders agreements.

It is important that shareholder agreements regulate the relationship between the shareholders and the memorandum of incorporation between the owners, shareholders, the company and third parties. This in addition to governance policies for continuity in the broad sense. Executing the correct format of agreement and ensuring that it is professionally drafted is of the utmost importance.

4. Return on investment

Having instilled value in the brand by ensuring that the values of the business owner have been instilled throughout the organisation and forging a successful venture is key in achieving return on investment. At this point, continuity measures must be appropriately implemented and business, as well as ownership, protected.

Continuity, in order to increase the value of the venture and avoid it being under – valued or terminated on the death or retirement of the owner or other key role players. Thus structuring the business owner’s personal affairs with as much care as structuring the business affairs is vital.

This to safeguard the business from claims from personal creditors. Thus, implementing professionally drafted antenuptial contracts, indemnity and risk aversion strategies, as well as insurance and estate planning strategies are of the utmost importance in addition to seeing to the needs of the business.

Further measures to protect the brand, its integrity, tax and wealth sustainability in the broad sense are of the utmost importance. This involve the engagement of key role players such as informed attorneys, accountants and tax consultants.

Starting a Business? This How NOT To Do It.

Nicolene Schoeman – Louw is an admitted attorney of the High Court of South Africa, as well as being a Conveyancer, Notary Public and Mediator. She is the Managing Director of Schoemanlaw Inc Attorneys, Conveyancers and Notaries Public (Schoemanlaw Inc Attorneys) in Cape Town. Visit www.schoemanlaw.co.za for more information or email enquiries@schoemanlaw.co.za

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How The Sanlam Enterprise And Supplier Development Programme Is Helping Start-up Businesses

The balance between funding, business development and mentorship can make or break an enterprise development programme

Francois Adriaan

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Sanlam Enterprise and Supplier Development

165 new employment opportunities, 172 SMEs developed and 1046 jobs sustained. These are some of the numbers recorded by Sanlam as the company prepares to wrap up the fourth year of its Sanlam Enterprise and Supplier Development (ESD) programme.

The flagship incubation scheme has turned around loss-making enterprises, helped some participants get critical accreditation and funding, but most importantly, R12.6 million was spent procuring goods and services from the participating businesses by the end of 2016.

Related: Enterprise Development Programmes For Black Entrepreneurs

Receiving funding isn’t the secret to start-up success

Francois Adriaan, head of Sanlam Foundation says the secret to a successful enterprise development programme is not the amount of funding big corporates can give SMEs: “It’s having the right mix of mentorship; business intervention and procurement spend flowing from your corporate to small businesses.

You have to show the entrepreneur you are mentoring that you trust them enough to do business and walk the journey with them instead of giving them a once-off grant and leaving them to their own devices,” says Adriaan.

Financial support that’s timed to business need

Like in many other ESD programmes, participants in the Sanlam ESD programme also have access to funding. But what sets the programme apart from others, says Adriaan is that the amount of funds disbursed to each participating businesses is directly linked to its need, its commitment and progress record.

“Financial support is timed according to the specific needs of each SME. Those who qualify for funding are then provided with a further seven years of SME growth support through the ASISA Enterprise Development Fund.”

The Sanlam ESD programme

The Sanlam ESD programme was launched in July 2013 in collaboration with the Association for Savings and Investment South Africa (ASISA) to empower SMEs, create jobs and contribute to economic growth in South Africa. An independent evaluation shows that participating enterprises have grown their annual revenue by 19% on average.

D&P Auto participants

One of the programme participants is D&P Auto, a panel beating business based in Retreat. For two decades, the owners of the business (husband and wife) poured their life savings, bank loans and even pension policy pay-outs into the business to keep it afloat because it was not making profit. Three years of focused business incubation and mentoring under the Sanlam ESD programme resolved D&P Auto’s 20-year loss-making battle.

“Our business has grown from a non-profitable business to the extent that we now have to pay provisional taxes to SARS for the first time in 24 years,” said Pam Douglas on their business maiden profit.

Successes of the incubation programme

The incubation from the programme has helped other participants brush up their bookkeeping skills, file successfully for tenders and get accreditation that took their businesses to the next level.

G&T Auto, the only fully accredited Major Structural Repairer in the programme, bagged Mazda accreditation last year, a rare accolade that will see the enterprise repair Mazdas that are still under warranty. The owner, Thembi Sithole says the programme has given her confidence to approach bigger clients as she now understands the requirements to get big contracts. She has also become more knowledgeable about financial statements and their impact on obtaining funding.

Related: Why Employee Engagement Programmes Backfire And What You Can Do About It

Adriaan says enterprise development initiatives of this nature give big corporates an opportunity not only achieve their business objectives, but also impact broader South African society.

“This commitment is around impacting issues of inter-generational poverty, unemployment and inequality. It is also about aligning around public-private-civil society partnerships in sustainable ways,” concludes Adriaans.

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Are You Ready For A Side Hustle? Here’s How To Know

We talk to side hustle pro Susie Moore about who should jump into entrepreneurship and when is a good time to take the leap.

Andrea Huspeni

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It seems like everyone has a side hustle. Indeed, 1 in 4 millennials have a side hustle, part of the  54 million Americans making money outside of their pay cheque.

But are you ready to get your hustle on?

According to Susie Moore, a life coach and the founder of Side Hustle Made Simple, you are always ready to begin a side hustle. You just need to know where to begin.

Related: 3 Ways To Set Your Side Hustle Up For Success

Moore has helped thousands of people take the leap from concept to creation in making their entrepreneurial dreams a living, breathing reality by launching a risk-free side hustle. She left her $500,000 job after her own side hustle took off within just 18 months.

She’s also the author of What if it DOES Work Out? How a Side Hustle Can Change Your Life released this fall, speaker and adviser to startups. Her work has been featured on the Today Show, Marie Claire and more.

To help aspiring entrepreneurs understand what it takes to be a side hustler, Moore is joining us for this week’s episode of Tough Love Tuesday, our Facebook Live series that connects experts with side hustlers for real-time advice and support.

Related: 50 Jobs, Gigs And Side Hustles You Can Do From Home

Specifically, she’ll share:

  1. The qualities all side hustlers need
  2. Advice that turns great ideas into action
  3. Strategies for making money right away
  4. Ideas for perfect side hustles
  5. Productivity hacks that prevent burnout.

This article was originally posted here on Entrepreneur.com.

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(Video) Why Your ‘Great Idea’ Actually Sucks

Don’t get caught up in coming up with the next big idea.

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Everyone wants to come up with the next Uber, Facebook or Tesla. But, if Entrepreneur Network partner Patrick Bet-David has to choose between someone with a great idea and someone with great sales skills, he’s taking the salesperson every time. Why?

Related: The 3-Step Approach For Testing Out Your Business Idea

Well, look at the history of great businesses. Ray Kroc didn’t start McDonald’s, but he learned how to sell the fast food restaurant and made far more in his life than the actual McDonalds brothers. Steve Jobs couldn’t code like Steve Wozniack, but he knew how to sell Apple, and his estate is worth far more now than Wozniack’s.

Facebook, Tesla and more. Each time, it seems like the great salesperson ends up earning more than the person who created the great idea to start with.

Watch the video to learn more about the relationship between great ideas and great sales techniques.

This article was originally posted here on Entrepreneur.com.

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