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Be Your Own Boss By Starting A Small Business

Starting a small business is exhilarating, rewarding, challenging, and the starting point to changing your life and future. Here’s what you need to know – the good and the bad – in preparation for your big business start.

Entrepreneur

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If it’s your dream to start your own business, there are some cardinal rules that, if followed, will help you dodge becoming a start-up failure statistic. Your road to starting your own business begins here.

Starting a small business: Being your own boss

One of the biggest choices a would-be entrepreneur needs to make is whether to walk away from a relatively secure, salaried job in order to pursue their own-business dreams. But the transition from being an employee to being an entrepreneur is a big one and there are things you should be prepared for:

Related: 7 Steps To Launching Your Own Business

How comfortable are you with risk?

Not only will you need to decide on leaving your job for starting a business, you may also need to fund it with personal savings, taking a loan, or cashing in a retirement policy.

Entrepreneurship by its nature involves a degree of uncertainty, and as your own boss, you’ll need to make some tough and/or unpopular decisions.

The key is to take calculated risk – make sure you’ve done as much research as possible on the industry, your business model, your target market, and financials.

Do you have the right characteristics?

Great entrepreneurs are independent, stubborn, charismatic, resilient, persuasive, able to negotiate, creative, and natural-born leaders. If you don’t possess these traits, it doesn’t knock you out of the game.

Be sure that the kind of business you’re entering suits your personality type. For example, a PR agency will require a business person who is tenacious, out-going, sociable, and loves interacting with people. An accountant, on the other hand, may not require such high social skills.

Are you in it for the love of it?

There will be times when money is tight, when hard decisions need to be made, and when family and personal time gets sacrificed for the business. If the dream you’re chasing is just to get rich, it won’t sustain you very long. You need to eat, live and breathe your passion and dream.

Do you have the right skills?

If you’re leaving corporate, ensure that you have all the necessary skills to run a business, or be prepared to reach out for help. Many corporate individuals have expertise in a particular field but don’t have all the other skills needed to run a business.

Be prepared to learn how to fill the gaps, ask for help, or outsource or hire for the necessary skills.

starting-a-business-planning

Have you planned properly for starting a small business?

A start-up may start out of the blue, but no successful business has survived and thrived by winging it all the time. A successful small business starts with a careful plan.

Related: Do You Speak Start-up?

First define why you are starting a business

Is it to be your own boss, to make more money, to gain more independence, to have more time, to sell for millions one day, is it for a steady income, because there’s a gap in the market, or you want to turn your hobby/personal interest/passion into a meaningful business?

Second, come up with a sound business plan

No idea can be realised or made to last without some planning. A business plan is your first port of call to mapping out your business.

Next, who will be part of the business?

Are you a sole proprietor who will run all aspects of the business? Will you have partners in the business and what will they bring to the table? A word of caution: Choose your partnerships wisely – if it’s a family business, be sure there are boundaries in place and that roles are well defined.

Make sure your business partners complement your skills and knowledge with their own. While things may start off well, make sure you have an attorney draw up papers of who’s who and contributed what in the event things go south.

Where will the money come from?

While some businesses can be started with very little, many will need a cash injection to bring them to life. Will you use personal savings, take out a loan, seek investors, court venture capitalists, self-fund and bootstrap the business?

Each option comes with its own pros and cons, so investigate them carefully. Also be mindful and realistic about return on investment – it’s very rare that a business will make back 100% of its start-up capital in the timeframe you initially expect. Be conservative in your estimations.

Pay close attention to running costs

Sometimes it can take up to three years before a business reaches break-even and starts to make a profit. So, while you’re working toward this point, keep your books immaculate, document all outgoing and incoming money. It will help you pin point areas where expenditure can be trimmed and income improved on.

Related: 10 Steps To Starting Your Business For Free (Almost)

small-business-networking

The importance of networking when starting a small business

Networking is one of the most important activities you’ll be involved in when starting your business. Entrepreneurship is a hard game and can be a very lonely and isolating experience for some. By networking with other entrepreneurs, you will learn that your fears and challenges aren’t always unique to you, but just par for the course. Sharing with other entrepreneurs can give you confidence and motivation to keep going.

Networking can also help you land clients by giving you the opportunity to rub shoulders with people who may need your product or service – think conferences, trade shows, industry events – or may put you in contact with people who can provide you with skills, resources and advice.

If you’re not in need of help, networking is a great opportunity to market your company and position yourself as an industry expert. If people get to know you as the industry go-to-guy, you’ll develop a positive reputation, gain trust, and business can follow.

Landing clients: A small business imperative

Without clients, a business is a non-start. So once you’ve got your business plan in order, focus your attention on landing your first client as soon as possible. For some entrepreneurs this may involve taking on clients from their previous job, from networking, or through word of mouth.

For others it may involve finding clients from scratch. If you’re providing a new product or service, make your clients fully aware that it’s a work in progress and that things will improve with customer feedback. You may even want to get your first client by offering a free trial period or at discounted rates.

The object of getting your first client is to get feedback as quickly as possible and develop your offering based on their needs and demands, rather than producing a 100% ready for market offering that doesn’t meet the needs of your target market.

Related: Advice for Starting a Business

Starting a small business: The most common mistakes

Key performance indicators

To help you stay focused during the start-up phase and at the same time avoid tunnel vision, it helps to keep track of Key Performance Indicators (KPIs) you’ve set in place.

KPIs are used to measure performance and success in your business, and help you towards your business goals. These can be as simple as 100% customer satisfaction, zero injuries on site, or minimal defects, for example.

Each KPI should be constructed with a particular purpose in mind – the KPIs for finance will be different to KPIs for sales, for example. Some kinds of KPI include: Marketing, production, IT, supply chain management, finance, business government, sales, etc.

Focusing on high-impact tasks

With limited amounts of time and energy given to each day, week, month and year, it’s important to assess your business goals, set realistic milestones and plan accordingly. It is of use for every entrepreneur to do some research into the 80/20 principle: Where 80% of the results come from 20% of the causes.

Focus on your best customers, on selling and improving your best selling product or service. Enable your best staff to do better – fundamentally focus your attention on high impact tasks rather than being bogged down in emails for example.

Types-of-small-businesses-in-south-africa

Types of small businesses

Are you ready to start your business? Here are three kinds to mull on:

  • Consultancy – If you have expertise in a particular field, you can start a consultancy providing professional expertise to those who need it.
  • Part-time – Believe it or not, you can start a business while being employed at the same time. This kind of venture will be quite demanding, but also worthwhile as you will be able to determine whether your business idea is ready to support your financial needs before cutting off the monthly salary. It is advisable that your employer be aware that you’re running a side-line business, as most employers will support you in your entrepreneurial endeavours provided that it’s not infringing on your work time and the company’s resources.
  • Hobby – if you’ve got a personal interest or hobby that can be used to create a profit, then you have a potential business in your hands. Make sure you do your market analysis though and carefully evaluate the amount of time and capital required and versus the income you can gain.

Related: Start A Part Time Business

From here, evaluate whether you can run your business from a home-office, whether you’ll need to rent office or manufacturing space – and can this space be shared with another business, and whether you’ll need staff. Will your staff need to be full-time, part-time, temp, or even a virtual assistant, and will they need training and/or specialised skills to assist you and your business?

When hiring staff, ensure that an employment contract is drawn up with all terms, conditions and expectations in writing, that it is signed by both you and the employee, and that it conforms with the Basic Conditions of Employment Act.

Entrepreneur Magazine is South Africa's top read business publication with the highest readership per month according to AMPS. The title has won seven major publishing excellence awards since it's launch in 2006. Entrepreneur Magazine is the "how-to" handbook for growing companies. Find us on Google+ here.

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1 Comment

1 Comment

  1. Javed Iqbal

    Nov 30, 2013 at 10:05

    i want to start a new small business and i don’t know how to prepair its plan . kindly guaide me .

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Small Business

Even SMEs Can Use Big Data: Here’s How

If entrepreneurs are brave (and forward-thinking) enough to take the plunge into big data, there are many business advantages to be gained… especially before everyone else catches on.

Michael Colin

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Big data has for years held a reputation as a business tool that only large corporates have the time, money, and human resources to use effectively. But, as is so often the case with technological disruptions – what once seemed unattainable is becoming sleeker, faster, more affordable, and more user-friendly than ever before. In fact, it’s not a stretch to say that with strategic usage, even small businesses can gain as much advantage from big data as any Fortune 500 company.

To start with, what is big data? Organisations deal with data every day, from customer profiles to supply chain processes and sales figures. Big data takes this operational information-gathering to the next level. Multiple data sets are drawn together to create a large resource of facts and figures, which (and here’s the most important part!)  are subjected to complex analysis to pluck out useful insights that enhance business operations.

Traditionally, SMEs haven’t delved much into big data. When you’re busy trying to build a successful business from the ground up, submerging yourself in statistics probably sounds more like a hindrance than help. But times have changed, and over the years, capitalising on big data has become a lot easier and more budget-accessible for SMEs. No need for dedicated data managers and unaffordable analytics platforms.

Related: 3 Ways You Should Use Data Science to Skyrocket Sales

In fact, over 70% of respondents to a global survey of small businesses found that the adoption of this type of technology exceeded their expectations. Closer to home, 27% of SME decision-makers expect to be using big data within the next five years.  If entrepreneurs are brave (and forward-thinking) enough to take the plunge into big data, there are many business advantages to be gained… especially before everyone else catches on.

A detailed understanding of your customers

You may think you have a good picture of your customers, but inevitably you’ll encounter blind spots at some point. Big data can fill in the blanks and give that same customer picture HD-clarity. Buying habits, consumer profiles, satisfaction levels, social media usage – combine this information, apply the right machine learning algorithm, and the result is a far better understanding of customer wants and needs, which you can then work to better fulfil. This applies to both the product or service you’re selling and the way you’re marketing it.

Perhaps even more importantly, big data can help you get ahead of trends. There are a few things more valuable to a business than having the first-mover advantage as latent demand surfaces. And the best thing about big data is that it’s based on solid facts and figures. When it comes to predictive decision-making, it removes assumptions and guesswork, allowing you to get off the starting block first, and with sure footing.

Improved internal processes for your company

Big data is not just about heightening customer relationships. It’s a powerful resource with massive benefits for organisations internally as well. And not just in terms of time- and cost-savings around business analysis.

Crunch your operational statistics, and you may find surprising ways to optimise processes – such as identifying places where automation can be introduced or retooling your staffing to meet shifting demands over the workweek. In addition to reinforcing business decisions, big data is excellent at helping to identify problems in real-time and correct course. Today, solutions are available immediately, when in the past it could take weeks or months to mine such valuable insights.

Related: Can Your Marketing Team Speak Data?

Tools to take advantage of big data

What do you need to make the most out of big data as a small-business owner? In the digital age, the foundation is a reliable high-speed Internet connection. This is because of big data’s own evolution.  Data analysis was once a lengthy process which required a large amount of hardware storage (and, before that, filing cabinets), it has now evolved into a digital product provided by many business solutions providers over the cloud. The handling of information is streamlined in this way, and setting up databases, sending information for analysis, or receiving meaningful results, happens almost instantly.

SMEs may not have the resources of their more established, big sibling rivals. However, up-and-coming businesses do typically have the advantage of agility thanks to their size. It’s easier for a start-up to move quickly, redirect as needed, and act on just-gained insights and trends. This makes big data no longer “nice but unnecessary,” but an essential tool to give your company that all-important advantage in the digital economy.

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Small Business

A – Z Easy Small Business Ideas

Whether it’s a ‘eureka’ moment at three in the morning, or a persistent feeling that you’ve got a great small business idea, here’s some of the things you need to know to determine if you’re on to a good thing.

Entrepreneur

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A small business is by no means a lesser one to the big corporates out there – even they were once small.

The term ‘small’ simply refers to the size of the company in terms of its turn-over (less than R1 million per annum) and its number of staff (usually 50 or less), certainly not its clout.

Related: How To Go From A Clever Idea To A Viable Moneymaker

In fact, it’s often small businesses that give large corporates a run for their money as being small allows for greater agility and flexibility, quicker turn-around time, and greater room for customisation. Ready to get your small business started?

A small business can start in a home kitchen, a spare room; it can start in a garage. It can start in a small rented office space with just a laptop computer and yourself manning it, or it can start between friends, spouses, business partners.

Mostly though, a small business has minimal staff, is started with a small amount of capital, and it carries low overheads.

Need small business ideas?

Take a look at the list below to help you start brainstorming. The key is to examine an industry that you have strengths in, and determine whether the skills and character you have (or can develop) can meet a need within that industry.

Here are some examples of businesses you can start from home:

A

  • Air-conditioner and appliance repair
  • App developer
  • Ad agency
  • Antique restoration and resale
  • Aquarium supplies and maintenance
  • Animal trainer.

If you have a skill and it can be sold to someone who needs your skills, it is a business.

B

  • Bookkeeping
  • Professional blogger
  • Business consultant
  • BEE consultant
  • Baker
  • Body guard service.

If you are looking at service oriented businesses, make sure you are properly qualified to perform the service and registered with the appropriate associations for credibility.

C

  • Catering business
  • Chef
  • Carpenter
  • Car mechanic
  • Cellphone repair
  • Child care
  • Computer maintenance and repair
  • Computer training or programming
  • Construction and clean-up
  • Customer service professional
  • Call-centre.

People will buy a product or service if it makes their lives that little more convenient.

Something that saves people time, money or hassle is essential for a sustainable business.

D

  • Dry-cleaning service
  • Driving service or school
  • Data capture or data analysis service
  • Desktop publishing
  • Dog training, walking or grooming
  • Disaster prevention and planning service
  • Direct mail marketing service
  • Database management

We know you were thinking Doctor – however, there are options beyond being a ‘doctor’.

E

  • Engineering consultant
  • Exporting business
  • E-tail store
  • eBay reseller
  • E-tail secret shopper to see if someone’s e-tail experience is easy.

If it’s happening online, you can add an e- to it.

F

  • Florist
  • Freelancer
  • Furniture removal company
  • Fire safety
  • Fire-hydrant maintenance and sales.

Whatever you do, it doesn’t always matter if it’s a traditional or ‘old’ business, so long as you’re doing things differently and that they’re meeting the needs and interests of the modern consumer.

G

Although established internationally, an up-and-coming industry in South Africa is all things green, from construction to materials, to greening businesses through lowered carbon footprints.

  • Green cleaning service
  • Green consultancy

If green doesn’t float your boat, there are household aggravations like:

  • Gutter cleaning
  • Garage makeovers
  • Gluten free products and foods creation and baking.

H

  • Hairdressing
  • Handyman service
  • Holiday planning service
  • Home inspection service
  • House-sitting service and anything home-based.

I

  • Importer
  • Image consultant
  • Image or Internet researcher
  • Interior designer.

Be careful to research your industry properly before entering in to it, take ink cartridge refilling for example. As technology changes, will you be able to sustain your business?

J

  • Jewellery designer
  • Jam-maker
  • Journalist
  • Javascript developer
  • Got space? How about a junk yard?

K

  • Knitting,
  • Kitchen fitting
  • First aid kits like cyclist and other sports, or kit-cars for motor enthusiasts.

L

  • Life coaching
  • Labour broker
  • Liquor manufacturer
  • Lab consultant or running your own lab
  • Laundry service
  • Language instructor
  • Lock-smith service
  • Lifesaving.

Provided whatever you do adds value to the customer that they can’t get elsewhere, you’re on to a good idea.

M

  • Start your own marketing company
  • Massage therapist
  • Make-over consultant
  • Motivational speaker
  • Moving company
  • mobile masseuse
  • mobile salon
  • mobile food truck
  • mobi-app developer
  • Medical consultant.

The latest trend as technology advances is for things to be mobile.


8 Ways to Come Up With a Business Idea

So, you want to be an entrepreneur? Then you’ll need a business idea. Here are eight ways to come up with a original business idea.


N

  • Nail salon
  • Nutritionist
  • Nurse – Think a post-operative care service, or even elderly care.

O

  • Organic producer
  • Online trader
  • Occupational therapist.

P

  • Personal shopper
  • Plumber
  • Party planning
  • Personal trainer
  • Pest control
  • Photographer
  • Photo-retoucher and restorer
  • Project manager
  • Personal tutor
  • Pool cleaning
  • Proofreading.

Q

  • Quality controller
  • Queuing service
  • Quantity surveying
  • Quiz master.

R

  • Restaurateur
  • Resume consultant
  • Recruiter
  • Research consultant
  • Restaurant or business reviewer.

S

  • Secret shopper or secret reviewer.
  • Sales
  • Salon or spa
  • SEO
  • Social media strategy
  • Scrapbooking
  • Speech writer
  • Sound engineer.

T

  • Translation services
  • Transcription services
  • Tax accounting and consulting
  • Sun-free tanning solutions
  • Training
  • Tutoring.

U

  • Underwriter
  • Upholsterer
  • Undertaking services.

V

  • Video producer
  • Videographer
  • Virtual assistant service
  • Voice-over production
  • Voice training
  • Viral marketing.

W

  • Webmaster services
  • Web design
  • Wedding planner
  • Wallpaper design and hanging
  • Car washing service.

X

Ok you’ve got us there… try something x-treme.

Y

  • Yoga instructor
  • Youth mentoring, counselor, camps, youth co-ordinator
  • YouTube video producer
  • YouTube channel manager.

Z

We’re drawing at straws for this one, especially when the only thing you can come up with is ‘zoo’. But even they might need some services outsourced.

Tips about selecting a small business idea

So now your brain is thoroughly overflowing with new business ideas. But before you go quitting your job and investing everything you own into it, it’s time to assess whether it can be turned into a sustainable small business.

Here’s what you need to evaluate:

  • Who is the target market? There’s no business if no one will buy your product or service. Is your target market able to afford (and prepared to pay) for it? Do you have reams of market analysis about your target market’s likes and dislikes, area densities, income, responsibilities, age, gender, education etc? The clearer the picture you can paint of your target market, the more able you are to provide to them.
  • What makes you stand out? Does your idea already exist? If so, what are you doing differently to your competition? Is there something unique or value adding that you offer? If your business idea is new, is your target market ready to take you on? SEO, for example, was around a long time before businesses saw its value and started paying money for it. Make sure your business has a unique selling proposition (USP).
  • Money, money, money. While some ideas are great, whether it will translate into an awesome business is determined by a financial feasibility study. What will it cost you to get the business off the ground, how long will you need to wait before you break even and see a return on investment? What are the on-going expenses like overheads? How will you bridge the gap between starting the business to it becoming profitable? Once you’ve completed a feasibility study, you may be disappointed to discover that the idea just won’t make a profitable and sustainable business. Don’t be sad though, at least you discovered this before you poured in your life-savings into a dead-end idea. Keep thinking.

Choosing a small business idea based on strengths and passions

Everyone has skills. The trick is to see what skills you have in your current job or through your work experience that are transferrable into your new business.

Take a hard look at your business idea and see whether you’ve got both the personality traits and the necessary skills to make it happen.

If the answer is yes, keep going. If you find that you’re quitting your corporate job because you despise it, starting a business to capitalise on that same work experience might not be your calling.

Related: 10 Businesses You Can Start Part-Time

Assess what your personal interests are, what you’re passionate about, and how you can use the skills you have to turn it into a business. Entrepreneurs need to be passionate about their business idea – as it will be passion that motivates you during tough times.

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Small Business

Why Small Businesses Need A Security Control Room

Below are just some of the reasons why you need a security control room for your small business.

Amy Galbraith

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As a small business owner, you know how important it is to provide your staff and your clients with a safe and positive environment. However, a CCTV control room is often not the first thought that comes to mind for a small business. A CCTV control room is one of the most effective ways to ensure that your staff and office space are safe, day and night. Below are just some of the reasons why you need a security control room for your small business.

It will prevent criminal activity

Businesses that install a CCTV security system are less likely to be targeted by criminals. Often, the mere sight of a camera on the side of a building is enough to deter and prevent criminal activity. Criminals do not want to be caught in the act.

If the unfortunate event occurs that you are broken into, you will be able to prevent further crime by installing CCTV control room equipment in your office space. Criminals tend to target buildings and businesses that appear to be unprotected, which means that having a CCTV control room will reduce your chances of being targeted, and can help to reduce crime in the area overall.

Related: 6 Of The Most Profitable Small Businesses In South Africa

You will protect your business assets

A small business, such as an artisan coffee shop or vegan restaurant, will have assets that help it to function. It is vital to protect these assets, and you will need to have both insurance (in case one of them is stolen) and a CCTV control room to watch over every asset your business owns.

Installing a good security system also relates to cybercrime, as you will be able to watch both consumers and employees, noting who is using your computers at any time during work hours. If you notice missing data or incorrect time logging of employees, you will be able to go over the camera footage to see who logged what at what time. Data and information may not always be covered by your insurance company, which is why having a CCTV control setup is vital to protecting your assets.

Protect your employees

Your small business might only have five to ten employees operating at once, but this small number does not make protecting them any less important. Your employees are your most valuable asset, and so their safety should come first.

A CCTV control room will allow you to keep an eye on your employees, ensuring that they are safe. If any suspicious activity does occur on or around your premises, you will be able to see it happening and take immediate action, such as someone harassing your employees or trying to gain entry to your building. Protecting your employees also protects your business, making it a win-win situation for everyone involved.

Assist law enforcement

If your business is broken into and something is stolen, assisting the police with CCTV footage can help their investigation immensely. The police may need to release footage to the public in order to catch criminals who have stolen significant amounts from your business, or retrace the steps of the crooks in order to catch them.

Law enforcement officers might have the best skills in the business, but without video evidence, they are unable to find criminals with ease. A picture or a video can make a huge difference when looking for criminals, and will also prove to them that you made the right call in contacting them about the situation.

Keep your employees honest

While it is vital to protect your business from outside threats, there are internal threats that could damage it too, such as dishonest employees or employees who steal from you. You do have to make your employees aware that you are filming them with CCTV, but this footage may not hold up in a CCMA court, as every person is entitled to privacy according to the constitution of South Africa.

Related: Government Funding and Grants for Small Businesses

The knowledge that they are being filmed will, however, encourage employees to be honest and open while working, making for a more productive workplace. In a small business, it is easy to become friends with your employees, as you work closely with one another. While this is positive, it can lead to them taking advantage of you in some situations. Being able to monitor their behaviour will keep them honest and will deter crime in the office space.

Conclusion

Having a CCTV control room is vital for the safety of your small business, but it is important that you make both customers and employees aware that you are using CCTV in your office or retail space. Cameras can help to protect your staff and your assets, as well as aid in diminishing the crime in the area overall. Small businesses need to think about their safety just as much as bigger corporations, so investing in CCTV control room equipment and setting one up is the best action to take.

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