“Starting a business is like jumping out of an airplane without a parachute. In mid air, the entrepreneur begins building a parachute and hopes it opens before hitting the ground.” – Rich Dad
On the morning of 31st December 2011, i woke up with a dream and vision in mind- I was going to start a new business venture and a blog to go with it. I was going to do a weekly post on the blog as to the progress of my business venture. It was easy, i mean, how hard could it be post weekly on a blog with regards to my business progress? I am a professional writer, and i had the perfect business idea and zeal to start a business, so that was more than enough, right?
How wrong i was. As you can probably see, i have been unable to do weekly postings on my business’ progress, not because i have a writer’s block, but because three months down the line, i still have no headway as to my entrepreneurial ventures! Most first time entrepreneurs, those who look to find their footing in the business world and hope to become business moguls like Steve jobs, Donald Trump or Richard Branson, face numerous challenges when starting a business from scratch. There are other serious challenges we face as small time wannabe entrepreneurs.
1. Developing the vision of the Business Idea.
It is one thing to have a business idea, to have a dream, to see it in your mind how the business will grow into an empire, it is on the other hand, another thing to actually develop this idea. A while back i wrote about having a vision board to outline the steps one has to take in accomplishing their set goals. Well, a vision board is just but a guidance tool, what is or important is the will and means to develop the idea, to transform the vision into action then to visible products/services and finally to profits. How do you hone the process of creating ‘value’ out of ‘nothing”, out of ‘a mere notion in the mind’? Well, as i discovered, this can only be done through the creation of a business plan, that gives you an insight of the future of your business. This helps you envision your business, and develop your visions.
2. Raising the Capital
So you have developed your business plan, and put your vision in paper and realistic scenarios in terms of marketing, risks, management plan, Financial plans etc. What next? As an entrepreneur who knows the needs of your business, you need to figure out how you will get resources to jump start your business into life. One of the ways to raise capital for your business is ‘borrowing’ money.
But there is more to raising resources for capital than just walking to a bank and applying for a loan or approaching a business man and asking them to fund your capital. It is not as easy as it seems. For the seasoned investors, investing in something that doesn’t exist is much more harder than investing in something that is established, because established businesses present minimal risks, and maximum returns, as compared to green and virgin enterprises. And the reason why most business ideas never progress past the capital stage is mainly because the entrepreneur lacks means of raising the needed capital. So how do you counter this problem?
Develop your selling skill. Know how to sell your business idea and vision to potential investors. Identify these investors, then wow them with your business story, your excellent business plan and your persuasion abilities.
3. Finding the Right Management Team
Why has my business idea stalled? Because i lacked the judgement to choose the right team that could help me brainstorm on ways to grow this perfect business idea i had. See, i had handpicked 3 friends of mine whom i thought were perfect for the management roles. Rule number 1: please keep friendship out of business, because friends will either steal your idea, or derail your plans in one way or another.
Find a team that will help you raise capital, a group of people that are bound to share your passion and business ideas, one that envisions the future of the business with you, one that believes in teamwork, and a one that is comprised of various specialties- the financial, legal, and marketing specialties. A business can never grow with an individual, you need a team to help you grow, and a good and professional team for that matter. Don’t worry how you will pay the team, you will figure this out once you have established your business.
Competition, though pegged as a disease in start-up enterprises, are actually an engine that motivates the business to grow, if handled well. Competition breeds innovation. In-fact, the basis of my business idea was as a result of the realization that a certain industry in Kenya was monopolized and that it needed just a little competition. Competition should be handled with care, because it is the curtain to which makes or breaks your targeted customers.
5. Changes and Trends
“How fast a company can respond in an emergency is a measure of its corporate reflexes.” – Bill Gates
Change is inevitable, and as a business person who is just starting up, you should keep that in mind. Your business should be tailored to adjust to current trends.
“In the world of business and investing, your exit is more important than your entry. A good thumb of rule is this; exit before you enter.” – Robert Kiyosaki
As a business entrepreneur, you have to think about your exit strategy, to make sure that the business will be sustainable, and continuity will be assured, even after the death of its founder. Many huge businesses crumble because of the lack of an exit strategy. One has to identify specific targets, that will be used to exit the business.
Exit strategies can be ensured either by placing a policy of handing the business over to professional managers once you exit, or selling it to or merging it with a private investor, or publicizing the business. Key is to remember that the exit of the business is more crucial than its start up.
I am sure there are other challenges one faces when starting up a business, like finding market for products, or finding good employees, or ensuring growth, but as a personal gesture, these are the ones that i am struggling with at the moment. I guess the trick is to stand strong in the face of these challenges and push on, arming yourself with the know how on how to make your business prosper past the capital stage.
As the Chinese proverb goes, “He that is prepared has half won the battle.”
So prepare yourself businesswise.