Pathway to successful business
Updated on October 15,2022
Losing a job is one of the most stressful life experiences, so it's normal to feel angry, hurt, depressed, scared, grief at all that you've lost, or anxious about what the future holds. Does it mean it's the end of your destiny? Venturing into entrepreneurship may sound as a good moment to shape up your messed life once again.
No one ever said it was easy being an entrepreneur. Whether you are in the early stages of your startup, just secured funding for your startup or you are already established, there are always rules and principles you must always live by. Entrepreneurship needs your dedication based on time, money and other essential inputs. It is also exciting, an opportunity to be your own boss. But there also is an illusion of grandeur about it. True, dreaming you will be BILL GATES overnight and to get to change the world is a great motivation to succeed, but you need to be very keen about the procedures to grow to that point. Phil Libin, CEO of Evernote hints out that "There are lots of bad reasons to start a company. But there's only one good, legitimate reason, and I think you know what it is: it's to change the world." The world is dynamic, creating jobs should be the order of the day especially for the many fresh graduates globally. In the end, you will be remembered not for the great things you did but for the small things you did. A famous quote by Mother Teresa says "If you can't feed a hundred people, then just feed one." By being an entrepreneur you will have created jobs to people who would otherwise be jobless and by nature, the economy will grow.
There are numerous factors that are overlooked by young entrepreneurs starting out. Here are a couple of pointers to consider as you stay on the ladder of success:
THE SUBSISTENCE VS VISIONARY ENTREPRENEURS
It is realistic to note that most young, energetic and ambitious entrepreneurs today are subsistence entrepreneurs, not visionary entrepreneurs. The subsistence entrepreneurs use all money they earn to survive, they do not reinvest any capital into the business. Secondly, they never seem to have a bigger vision for their business. These businesses are never long lasting. According to the 2016 National Micro, Small and Medium Establishment (MSME) Survey, conducted by Kenya National Bureau of Statistics, 46 percent of businesses close after just one year of operation. Subsistence entrepreneurs fall in this category.
In comparison, a visionary entrepreneur centers their businesses on offering solutions to a need or gap that exists in the market. Necessity is the mother of invention. This requires research and continuous reinvention to meet the dynamic needs of the market. A good example KCB through mobile banking. KCB was a conventional banking company offering loans and banking services, but with M-banking, a simple money transfer option soon evolved to become an entire virtual banking system especially for SMEs.
Assess where your business lies. You can still transmogrify from a subsistence to a visionary entrepreneur. Pay close attention to the market mechanisms, although it might take time, be patient because patience and time do more than strength or passion.
MANAGE THE EXPENSES
Overhead expenses are all costs on the income statement except for direct labour, direct materials and direct expenses. Overhead expenses include accounting fees, advertising, insurance, interest, legal fees, labour burden, rent, repairs, supplies, taxes, telephone bills, travel expenditures, and utilities.
Managing overhead costs proactively and with a long-term perspective can effectively break the reactive cycle and permanently improve your business cost effectiveness. Benchmarking can be an effective tool for managing overhead costs proactively. By comparing either internally or externally can be a potential source for sustainable overhead management and cost reduction.
Maybe you are lucky and have a family member or a close friend who can render pro bono tax accounting and legal services, but when it comes to business fees, there's no escape. Business fees may be payments for permits, certificates of compliance or licenses to operate.
ASSESS MARKET STRUCTURE
At the inception of your business be it a boutique, casino, pub, salon, restaurant, gift shop or any business, your guiding factor should be your target customers. Establishing a vibrant clientele base is the first step to your path to success. How would you build a firm clientele base? Thanks to telecommunications technology. Build a website for your business and publish your catalogue online. You may also run a page on Facebook, Twitter, and other social networks. Your most unhappy customers are your greatest source of learning. It is for this reason that you should organize seminars, workshops, and conferences to market your products while paying keen attention to customer opinions. When everything seems to be going against you, remember that the airplane takes off against the wind, not with it. You can as well try networking events as they are a great way to market your enterprise. Gaining customers trust is also important because if people like you, they'll listen to you, but if they trust you, they'll do business with you.
WORK AND LIFESTYLE
Being one's own boss is an awesome experience everyone would want to enjoy especially for those fellows who were dismissed from the workplace and had to undergo frustrations. It can be hectic to balance work and life because an entrepreneur is a duo manager; for work and his life. Pay keen attention to the pillars of your life before committing your life to business. You're probably wondering what the heck I mean by "The Pillars of Your Life", right? Well, this is simple. It's the things that make your life what it is. The things or people that make you, you. There's work, family, your hobby, your art and your traditions. Except some of us have wonky pillars. The business is often demanding but no matter how busy you are, how busy you think you are, the work will always be there tomorrow, but your friends might not be, therefore it's absurd to sacrifice your friends and family at the expense of your business. The first two years are extremely intense as you figure out how to grow the business and also ensure you pay your bills. It is dedication.
It's almost always harder to raise capital than you thought it would be, and it always takes longer. You must, therefore, plan for ways of raising capital for your business enterprise. You must determine what type of financing would be suitable for your business. Banks offer several types of loans to businesses globally. Do you need a short-term working capital loan to increase your stock? Do you want a transaction loan, where you receive all the money once, or a line of credit, where you draw on funds as you need them? Do you need an intermediate loan to purchase an asset for your business? Once the funds are available for use, work out your financial plan. A financial plan entails a clear budget of all expenses and also work on the projections of income to handle new prospective costs that arise spontaneously.
This is the ability to resist the temptation for an immediate reward and wait for a later reward. Generally, delayed gratification is associated with resisting a smaller but more immediate reward in order to receive a larger or enduring reward later in your business.
A six-figure salary may come with time, it's bootstrapping in the beginning which can last up to three years depending on your business, operations and its potential growth. There are very many schools of thought who argue about entrepreneurs paying themselves first or last. The first thing you should do with your money is to pay yourself FIRST. Many business owners who bootstrap their businesses feel like paying themselves is a luxury; however, it is a necessity for the success of your business.
Paying yourself does not mean huge cash outflows to cater for salary and lucrative lifestyle, a little monthly salary is better. This will help you have access to basic necessities including food, healthcare, shelter, and clothing to keep you energized. Entrepreneurship is all about humility. Why live in an expensive rental when you can live with your parents or with a sibling and carry out your business from your bedroom? Make your bedroom your office.
As an entrepreneur make small sacrifices now by cutting costs and maximizing profits. In the end, your sacrifice will earn you the prestige of life; a handsome salary, luxury cars, fancy phones and dream homes you've always wanted.
"My religion is very simple. My religion is hard work."-Abel Shikuku, Talwork writer