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Start-up Advice

10 Things You Must Do Before Quitting Your Job To Start Your Company

You have a dream but you need a checklist to achieve it.

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So you’ve decided you’re ready to take the plunge, quit your job, and get your own company up and running. You have an amazing business idea you are ready to launch. You’re probably excited and nervous at the same time, which is perfectly understandable. If this is the case, you need to take a step back and remember that you simply can’t walk into work tomorrow with your resignation letter.

Being impulsive could be a huge mistake so you need to create a list of the advantages and disadvantages you will face when quitting your job. If you decide it’s still what you want to do, there are a few things you must put in place before you quit.

To help you get ready before your big day of freedom, I’ve highlighted 10 things you should do before quitting your job and starting your own company.

1Do research

Quitting your current job before getting your company off the ground may seem like the best option, but trust me, it’s not. The best way for you to get the wheels rolling in a safe and profitable way is to grow your business while you are still employed. This will make your transition from an employee to an entrepreneur a little smoother.

You can’t jump head first into building your new office block or warehouse if you haven’t done your research. You need to know that you have a product or service that you know the ins and outs of, that is unique, and above all, that will sell.

Related: Branson: Know When To Quit Your Day Job

Background research you need to do includes, but is not limited to:

  • Learning everything about your product or service
  • Knowing your audience and buyer personas
  • Researching your competitors
  • Finding the right teams
  • Knowing what your most profitable sales and marketing channels will be.

2Create a business plan

business-plan-creation

Once you’ve done your research, you need to put it on paper. Laying out a business plan before taking the plunge will be a key success driver.

Your business plan will be something you will show to potential investors, partners, and other company stakeholders.

It typically includes:

  • An overview
  • An executive summary
  • A company description
  • Your objectives, vision, and mission statement
  • Information about the market and industry into which you are entering
  • The strategy you are going to follow to enter the market
  • The team you will have
  • A marketing plan
  • An operational plan
  • A financial plan
  • An appendix with more detailed information.

3Outline Your Funding Options

Before looking at funding for your company, you need to have your own personal finances in check. If you quit with just a couple of hundred dollars in your pocket, with rent, insurance, and your phone bill to pay, you may find it difficult to focus your efforts on your new company.

In addition to planning your personal finances, you will need to have a plan for your startup. You’ll typically have three options:

  • One or multiple investors
  • Your personal savings
  • A grant or award for your project

Either way, you need to plan in advance because if you can’t get the capital to get started, your business will stagnate and you will be faced with very few options.

Related: 6 Resources For Start-Ups Looking For Alternative Funding

4Create the structure for your business

You need to have the structure for your startup in place before you can quit your job, specifically, your legal structure.

There are various types of businesses entities you could become:

  • A corporation
  • A limited liability company
  • A partnership
  • Sole proprietorship

You need to consider:

  • The operational complexity
  • Liability
  • Taxes
  • Control
  • Capital
  • Licenses, permits and regulations

5Leverage your resources

Leverage

Of course, you do not want to spend money if you can avoid it. You need to look at the resources that are currently available to you. For example, you may have a friend who is a web developer; they might be able to give you special rates and work for you on a need-to-know basis.

You should contact friends who have started their own business and ask them if they know a good accountant, marketing expert, and so on. Think about joining an online book club to learn more about entrepreneurship, try Read with Entrepreneurs by Cynthia Johnson.

Lastly, contracting all your experts could become expensive. Consider investing in online education for your team that will teach them skills, such as SEO, email marketing, and much more.

6Leave on a good note

Quitting your job without working your notice period, gossiping across the office, not completing your final assignments, and not training your replacement could be the worst decision of your life.

Of course, you are leaving to start your own venture, but you cannot be sure that tt will be a success or that your old company won’t come in handy one day. Leave without burning any bridges and you may be able to cash in a favor one day. Your old employer may even send clients your way knowing that you are a trustworthy businessperson.

Related: 9 Reasons To Quit Your Job As Soon As You Can

7Don’t forget the smaller planning details

As an entrepreneur, it’s easy to become the type of person that can see the big picture. Unfortunately, if you don’t focus on the small details, you won’t be able to mold the perfect company.

Planning is key, and little things such as choosing the right social media channels, keeping up to date with emails, or even remembering to file your taxes are vital to your success.

8Choose your new office space

When planning the day when you quit your job, many assume that they will work from home until their company is off the ground and they have a team backing them up. Although this could work in the short term, it’s not a feasible option in the long run.

If you choose to work from home, you need to find a balance between your personal space and work space. Working in bed, on your computer, all day, every day will lead you towards an unhealthy lifestyle that could have a domino effect on the progress your startup makes.

9Create a portfolio or resume

portfolio or resume

You may think that owning your own company means you’ll never have to create another resume in your life. Wrong!

Bulking up your resume and/or portfolio is a key driver when building your new business because you will need to prove to your investors, teams, and even clients that you are worth their money.

10Finally…

Remember that starting a new business is going to be more challenging than you imagined. You’re going to have to make the planning process your full-time job before you even see an income.

That said, with the tips outlined above, you could make it the best, most profitable adventure you’ve ever embarked on from both a professional and emotional point of view.

This article was originally posted here on Entrepreneur.com.

Dave Peck was an early champion of influencer and social media marketing who has been active in online communities for more than a decade. He is the author Think Before You Engage: 100 Questions to Ask Before Starting a Social Media Marketing Campaign. Peck has helped build online communities and develop social media strategies for Coca Cola, Wells Fargo, The Grammys and many others. As PayPal’s Global Head of Social Media & Influencer Marketing, he is focused on defining the company’s voice and creating stronger connections to customers through online communities.

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Start-up Advice

(Podcast) Playing To An Audience Of One

When you’re starting out, you’re often playing to an audience of one.

Nicholas Haralambous

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When you’re starting out, you’re often playing to an audience of one. No one knows who you are. No one understands what you can give them. You need to really, really believe enough in what you’re doing to play to an audience of one until you can build up traction. Don’t give up too soon.

Listening time: 3.25 minutes

Related: (Podcast) What You Buy May Not Be What You Need

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Start-up Advice

Your Questions Answered With Alan Knott-Craig

Which comes first, customers or revenue? To make revenue, you need customers. Here’s how you build a business that people will care about.

Alan Knott-Craig

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How can I start a small Internet service provider ISP business? — Tonderai

This is similar to the hoary chestnut, “How can I take over the world?” The answer is the same. Sit at the knee of a master for two years (at least) and learn the game. When you have a sufficient network of contacts, and understanding of the business, head off on your own. How do you find a ‘master’? Identify an ISP that appeals to you. Get your foot in the door somehow, even if it’s just making coffee. Work your way to as close to the CEO’s door as possible by continuously over-delivering. Learn like a sponge.

The possible alternative to ‘find knee of master’ is to find a technical guy with zero sales inclination. Make him your partner. You become the front office (sales — find customers). He becomes your back office (tech — product delivery). If you can’t find a master or a tech partner, you can’t start an ISP.

Related: Want To Leave Customers Grinning And Vowing To Return? Do The Following

How do I find a co-founder? How do I find a development team? — Kirsten

For a technical co-founder, Tinder is best. Jokes. In fact, Tinder is the last place on earth to find a technical co-founder. Rather try family and friends. Conferences. University. Milk your networks by letting everyone know that you’re looking for a technical co-founder. Failing that, you must hire a development team.

The days of compensating software developers with equity in lieu of cash are long gone. Absent a technical co-founder, there is only one way to develop software: Pay for it. How do you find the right dev-house?

Word of mouth is best. The rules of thumb are:

  • Maximum project duration = three months.
  • Scope it once. Don’t change the scope.
  • Keep it simple.

For your first iteration, it usually makes sense to go with a young and relatively inexperienced crew (try www.avochoc.com). Yes, the product will not be future-proof, but your first version need not be future-proof. You just need something to start signing up customers and getting market feedback.

If you get traction, then you can start worrying about scalability and consider engaging with more experienced (and expensive) dev-houses.

I have invented a hamburger roll that ensures the patty and toppings cannot escape. Would you suggest I patent it?  — Albert

Interesting idea. From the photos, it seems your solution is a variation of a pita bread. It may be worthwhile reading Zero to One by Peter Thiel.

He argues that consumers will always resist change, even change that is very obviously good for them, ie: non-leaking hamburger rolls. The only way to introduce innovation into an established market is if it represents a minimum of 10x improvement over the status quo. Only such a quantum improvement will induce people to change behaviour.

Although undoubtedly a big improvement, I’m not sure the non-leaking hamburger roll qualifies as 10x innovation. And so it probably will not succeed in the market place.

Before patenting, I suggest you try sell some rolls to establish whether you can get traction and prove revenue potential.

Related: Direct Marketing: Go Where Your Customers Are

I’d like to launch an app with an advertising revenue model. What do you think? — Mvelo

I’m sorry to be the bearer of bad news, but advertising is an insufficient revenue model in South Africa. You need to figure out another way to make money. Most times, the paths to non-advertising revenue streams only reveal themselves once you have users.

You should work on the assumption that it will take you at least two years to get sufficient traction, therefore you need to have two years’ worth of runway before plunging into your entrepreneurial adventure. In those two years, you should be growing your users as much as possible.

The size of your user base will determine your negotiating power with potential investors and/or customers, and will determine the odds of success in finding a non-advertising revenue stream.

Okay, forget advertising. I’m going to charge my users a monthly subscription of R20. — Mvelo

I realise that it’s a chicken and egg situation, but it’s very hard to find backing until you have proof of your theory working in the real world. On other hand, it’s hard to get proof without first finding backing. That’s the entrepreneurial quandary.

Generally speaking, the egg comes before the chicken. The egg is users. The chicken is revenue. Before you can test your revenue theories, you need users. Refer to previous answer.


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How The Black Umbrellas Programme Can Boost Your Local Black Business

Going it alone and succeeding isn’t unheard of in entrepreneurial circles – but getting the right backing can accelerate your success. South African SMEs have a ‘big brother’ in Black Umbrellas, explains CEO Seapei Mafoyane.

Shanduka Black Umbrellas

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Vital Stats

Going it alone and succeeding isn’t unheard of in entrepreneurial circles – but getting the right backing can accelerate your success. South African SMEs have a ‘big brother’ in Black Umbrellas, explains CEO Seapei Mafoyane.

The networks that the programme has are extensive. Along with mentorship, when these building blocks come together, they do something really majestic for the outlook of SMEs.

The Challenge

“The perception of SMEs in corporate South Africa is that they’re risky, unreliable and incompetent,” says Seapei. This results in a lack of opportunities for SMEs because large corporates still view them as potentially risky.

Related: 10 SA Entrepreneurs Who Built Their Businesses From Nothing

Joining Black Umbrellas offers the following:

1. Cameraderie

Belonging to a group of people who are going through the same challenges that they are. I think it’s extremely encouraging to find people who understand the challenges in the environment you’re going through.

2. Entrepreneurial spirit

You find businesses in different sectors and at different maturity levels in their business lifecycle. It’s very encouraging for someone starting out in their business to find a more mature business, perhaps in their second or third year, that has banked some projects.

3. Relying on a big brother

Black Umbrellas has been able to build a brand that is recognised for understanding the needs of corporate South Africa and being able to empathise with the requirements and support structures of SMEs. What entrepreneurs look for in the programme is that big brother that helps them weather the storm.

The Solution

“In a market where there’s quite a visceral relationship between corporate South Africa — where the majority of markets are — and smaller, medium enterprises trying to locate those opportunities, Black Umbrellas really is a meeting place,” says Seapei.

“We provide a marketplace for corporate buyers and SMEs to come together in an environment that is trusted. Some of the opportunities our businesses are able to access would not have been accessible to them if they were flying solo.”

SMEs abound, but it’s not always easy for larger corporations to find, vet and mentor them.

SMEs that join the Black Umbrellas programme have reported reaching levels they never saw themselves achieving outside of the programme.

“It sounds overly-simplistic, but I think the change is tremendous when SMEs join Black Umbrellas,” says Seapei. “It’s quite a thing to watch: A business trying to do this on their own and how their outcomes change when they join the programme.” Black Umbrellas opens them up to a network of help that is as wide as it is deep.

Related: Attention Black Entrepreneurs: Start-Up Funding From Government Grants & Funds

partnershipThe Power of Partnership

“We’d never be able to do anything we do without relying on collaboration,” emphasizes Seapei. “We rely very heavily on corporate partnerships to avail those opportunities to us and those markets for SMEs to be able to do what they do.”

Black Umbrellas has an extensive network of funders and donors that is expanding continuously and prides itself on being the custodian of SME development in South Africa. She says the programme aims to ensure high-impact SMEs produce incredible results to turn the outlook of the economy around.

One of Black Umbrellas’ longest-standing partnerships is with Transnet:

  • Transnet understands the mandate set out by Black Umbrellas and the need to invest in entrepreneurs.
  • We’re able to support their supply chain through the development of these dynamic businesses that go on to transform their supply chain and respective communities
  • Transnet has an incredible impact on the economy — through just two small incubators in Richard’s Bay and Port Elizabeth, with almost 500 jobs, which is a huge social return on investment.

BECOME A BLACK UMBRELLAS SME

Black Umbrellas’ mandate

Many start-ups don’t make it beyond the first two years because of inadequate planning, lack of support, financial or knowledge resources. Yet the growth of the SME sector in South Africa is vital for economic development of our country and in solving the unemployment crisis.

Black Umbrellas offers a platform through which to develop a business from its start-up phase to full independence. Because the programme addresses the multidimensional components required to develop an emerging business into a sustainable one, entrepreneurs are 100% supported on their business journey, which gives them the leverage to succeed. This support includes access to markets, networks and finance.

Programme benefits

Emerging businesses are supported with infrastructure, mentorship and collaboration, to assist their transition from incubation to viable, independent businesses.

For committed, hardworking and dedicated entrepreneurs, this multi-tiered business support programme is an important catalyst in enterprise development.

Related: 10 Dynamic Black Entrepreneurs

Black Umbrellas’ contribution to the economy

  • In seven years 1 000 SMEs have achieved a collective turnover of over R2 billion
  • The programme has contributed a combined R118 million in taxes back to the fiscus
  • Over 10 000 jobs have been created through our SMEs
  • R436 million in salaries has been contributed as a result of the programme.

Mistakes to avoid when establishing your SME within a large supply chain

Focus on a specific area where you can add real value. You’ll never be able to maximise every opportunity by trying to be all things to all people, says Seapei. “As an SME you want to find a particular niche that you can fill successfully, thereby maximising your unique value proposition.” 

Who should apply?

  • Entrepreneurs with a business enterprise at its start-up phase
  • The business should be registered with the Companies & Intellectual Property Commission (CIPC), and for small business tax
  • You must have the passion to succeed and be willing to work to achieve your business goals
  • You must be South African and black according to the BEE definition.

The 2017 National Enterprise Development Awards

Top performing small and medium enterprises have been recognised at the Black Umbrellas National Development Awards. Black Umbrellas established the National Enterprise Development Awards (NEDA) in recognition of the achievements of the entrepreneurs in their business incubation programme. These awards highlight the hard work and dedication required to establish and sustain a successful business that creates jobs and contributes to the economy.

The finalists were selected from regional enterprise development awards ceremonies held at each of the Black Umbrellas incubators across the country. The businesses in the incubators have altogether created and preserved over 10 000 jobs across key economic sectors, which include mining, construction, engineering, security services and project management.

Overall winners were:

  • Most Jobs Created: Hula Minerals and Processing
  • Best Performing Company: Aquila Projects (PTY) LTD
  • Best BU Ambassador: Recycle 1st
  • Overall National Winner: Modi Mining
  • Incubator of the Year: Johannesburg incubator
  • People’s Choice Award Winner: Recycle 1st

Seven Years  1 000 SMEs R2 billion collective turnover

  • Contributed a combined R118 million in taxes back to the fiscus
  • Created more than 10 000 jobs
  • Contributed R436 million in salaries
  • Expect more from your ESD Investment.

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