Five Things To Consider When Starting A Business

Sunday Live, a talk show on SABC 1 recently me to talk about some of the pains and joys of starting and running a business. The viewers started calling in later during the show, some with valid concerns and the rest seemed to think money was their ultimate challenge. There is no getting away from the need for capital when you start, but in most cases, plans tend to not reflect the realities of growing a fledgling business.

Most things that contribute to growth can be learned, let’s get into some of the things that you can consider if you want to build a new business:

1. Capital is the least of your problems

Take capital out of the business idea equation, have you got everything else that you need to build on your idea?

 “Huxley Don’t make excuses and Don’t talk about it. Do it.” ~ Melvyn Douglas

In his book Art Of The Start, former Apple chief evangelist, co-founder of Garage.com – a seed-stage and early-stage venture capital fund – and now the chief evangelist for Canva, Guy Kawasaki encourages startups to bootstrap. His advice, which I also lean towards, is that entrepreneurs should consider starting as a service business while they build their offering and test it in the real world.

Art Of The Start - Guy Kawasaki

The notion that capital makes a business is one of the killers of many great ideas that never get to see the light of day. Don’t fall into that trap.

2. Entrepreneurship is a lifestyle

In the movie Horrible Bosses 2, the side-splitting team starts a business and, following a TV interview, they get their first client. The client also happens to be a billionaire who gets them started with a huge order. Up to this point, this is the story that most of us buy into when thinking of starting a business. Aside from the great idea that we bet on, it’s also the notion that slot machines will pay out sooner than the usual salary run.

There’s another side. A side that does not get mentioned a lot. This alternative is seeing entrepreneurship as a journey, one filled with successes and some false starts. Part of the fulfilment is in building the idea and the value that it creates in the marketplace, not just the money that is likely to come in boat-loads. That is not to be confused with going against making a decent living, which takes us to the next point.

Are you ready for the change lifestyle which includes working late nights and early mornings in the early stages?

3. Put the mask on yourself first

How often do you ignore flight attendants as they take passengers through the all too familiar ‘pre-flight safety demonstration’? They tell you about the mask that drops if the worst happens and they mention that you should put the mask on yourself first, then help others – not vice versa. While this happens, most people send their last few text messages or check the time.

I struggled with this when I first started, I wanted to take others along with me and help them without realising that there was a fun and equally challenging journey ahead. A journey that needs the business owner to make a mask from nothing and put it on themselves first.

 

4. Build on an idea that you believe in

This seems easy enough when thinking about it. Of course you believe in your idea, you wouldn’t be thinking of taking this course of action if that weren’t true, right?

Wrong.

The sense of belief should be closer to a form of madness. This is what converts others to your world-view and how you do things.

When the iPhone 1 was released, there were mostly Nokia phones and other companies that did not have touch-screens. They were well known. They owned the market. Most of us had one of their devices.

Over time, for most of the world’s population who now use iPhones and Android, these were adopted. We all wonder how we coped before and forget that we thought the iPhone was a fad. Now people wait for the next launch and delay their upgrade.

“Stay hungry, stay foolish.” – Steve Jobs

As daunting as this may seem before you start, it’s something you cultivate as you build your idea. Before you begin collecting assets, no matter how small, check competitive business insurance quotes online as this will ensure that you have a sense of what you need to set aside to secure your assets in the foreseeable future.

5. Be prepared to ask for help

Building a new business without some of the resources that we are told we need is enough and it does not have to be. Find someone who has walked the path, someone who has built something meaningful in business, or an aspect thereof. Most people are willing to offer their insight and give guidance.Whenever it’s possible, find ways to collaborate which helps to strengthen your business offering and give you access to more clients and customers than you alone can find.

Helping Hand

There is a lot more this list and, at times, too much research can lead to never starting and building what the world needs. These are some of the things that I find to be true as I speak to many other people who have started and expanded their businesses over time.

What has been helpful for you? What took you from an idea to what you are working on today?

Venture Capital Funding : What’s the real story?

It seems to me that, though small business develops exponentially in South Africa. And small has become quite huge lately. We still get into business with twisted intentions, and by twisted I’m referring to the intent for funding without a solid business model.

Vinny Lingham spoke at the last 27 Dinner about his accomplishments as an entrepreneur, which also included building ventures that later got Venture Capital funding. It is always inspiring to hear an entrepreneur who broke through the barriers to build something meaningful. Even more worthwhile was listening to him retell his own story.

As for the impression many people still have of funding being the foundation for a successful business. That is another story altogether. And the reason for this post.

“But it’s different for software companies and Venture Capitalists view business differently.” Oh, is it?

Any investor considers the viability of a business, not whether it is a software company or not. So that left me with the question, do we think investors/funders change strategies with varying products? Or, are there fewer entrepreneurs than innovative techies? In this case, developers turned entrepreneurs. Geeks who aren’t really entrepreneurs.

Before you throw tomatoes, cans and possibly yank your monitor from the rest of your machine. Hear me out a bit.

The basics of business remain the same, regardless of the product you are developing. Lately, however, there seems to be a lot doing the rounds about products being developed. Of course, there is a need for more innovative products.

And as Web 2.0 has taught us, the market trails far behind innovation. As the masses, we also only know what we needed long after someone has designed it. But a solid business model behind it is what translates to a Return On Investment. Not just the product, and that is what the latest software innovation is.

In an article written earlier this year about VC funding and the need to build sustainable businesses this was said. . . .

Those seeking funds are seeing higher scrutiny of their business models. “There’s less willingness to let it ride now than there used to be,” said Vytas Kislieulius, CEO of Collections Marketing Center, a software-as-a-service startup that runs a collections exchange. VCs are looking more closely at the customer sets of the companies they are considering investing in, Kislieulius added. “It takes so much more proof that there’s a real market and that there’s real customers.”

It is possible that I have old-school business thinking, but is there still space out there for sustainable startups?

Has funding clouded all business thinking into developing companies and waiting to sell-out to the highest bidder?

Image by Rainbow Sherbert on Flickr