How to Not Fail at Starting your Own Business and Live out your Dream
It seems to me that everyone and their dog wants to be an entrepreneur these days. Perhaps it’s that I live in Cape Town and that the Government of the Western Cape and other corporates here are really doing their best to encourage entrepreneurial thinking, which is a good thing. There are tons of organisations focused on helping entrepreneurs succeed… so why is it that so many still fail?
I hosted a business breakfast last week and met with over thirty established small and medium sized entrepreneurs, each a success in their own right, each carving out their space in their highly competitive and over traded industries… and so I asked myself, why is it that some businesses succeed and others fail?
So I’ve listed 10 points I think are critical for you to get started on your first million.
1 – Stick to What you Know
If you’ve spent years in the hospitality industry, don’t launch a product in the education industry. You can, but you will have a massive learning curve and might misjudge the opportunity. The best place to start is with a need.
When did you last think this thought: ‘I know I can do this better than the way it’s currently being done’, because that is the beginning of your business idea right there.
2 – Share your Idea with a Start up Guru
South Africans are notorious for not wanting to share their big idea in case someone steals it. To me this just shows our ignorance. It takes real effort to make any idea succeed, and even if someone does copy it, the business that implements the idea best will win in the long run, and hopefully that’s you!
Spending some time and money with a professional mentor can help you move in the right direction instead of running down your resources by following the wrong path.
Consider hiring a mentor like Neil Hinrichsen (koistrategy.com), who has two highly successful startups under his belt and lots of experience working with entrepreneurs across South Africa. You could save yourself a lot of wasted hours, money and tears.
3 – Do your Research
Find out who your competitors are and what they’re doing well, what they’re doing badly, what customer’s think of them, what they charge, etc. The more information you have on the industry, your customers and the market, the better your chances of positioning yourself accurately and succeeding in your business.
One serial entrepreneur in America first studies new markets and researches new ideas for up to one year before even putting his toe in the water. And he’s sold a few companies for over a million dollars each time. So believe me when I say that this is one step you can’t afford to skip.
Need research done and don’t want to or have time to do it yourself? Email me and our team of researchers will get the low-down on your industry for you ([email protected]).
4 – Launch as Quickly as Possible
Don’t spend months or years developing the all singing, all dancing product. Rather go to market quickly with a beta version that is rough and ready, and test the product update. Having ten paying customers is priceless compared to a pie-in-the-sky idea that might take so long to develop that you run out of funding and interest.
Use WordPress for your website as it’s free and you can set it up yourself with minimal learning curve, or get a WordPress and SEO ecommerce expert to help you with this like Vasso from VaSEO ([email protected]).
5 – Keep your Costs to a Minimum
Please don’t rent fancy offices and buy a Nesspresso machine until you’ve got at least 100 paying customers (or whatever the amount). Resist the urge to buy the red leather couch and designer carpet before you’ve got sales in the bank. Hire staff who will work part time or try your hand with interns (not for the faint of heart) until you are able to hire full time. Unless you’re lucky enough to get funding, in which case, go wild!
Working from home is the cheapest but can be depressing and demotivating.
6 – Get a Business Mentor
It’s impossible to know everything, and when you’re deep in the trenches you can catch a bad case of navel gazing. Make sure you’ve got someone in your life who has ‘made it’ out there and who is wise, insightful and can serve as a sounding board for your ideas.
Selecting a mentor or coach is a very personal thing and you might need to try a few out before you find the right match.
Peter Moss is an excellent mentor for established businesses ([email protected]) and will help you navigate any challenge be it personal, financial or strategic with diplomacy and wisdom.
7 – Don’t Ignore the Paperwork
Accounting and admin are not my forte! Marketing, sales and advertising I can do with my eyes closed, but don’t ask me to capture slips into a spreadsheet.
If you’re anything like me you will need someone to come in and set up your paper systems for you, so let an expert show you how it’s done and then you can decide whether you want to take it over yourself, or carry on letting them do it for you.
Try Sheri Cumings from Back Office ([email protected]) or get someone in your family or a friend to help set up your systems for you.
8 – Your People are your Brand
As important as your product is your people. Do not neglect them or you will find yourself flying solo just as the storm is about to break.
Have weekly one-on-ones with your team, make sure they have targets, job descriptions and performance evaluations.
Reward them for a job well done with time off, compliments or financial rewards, depending on their personality and what motivates them.
Have a Monday morning status meeting where you go through everything that’s being done and what’s been done, and make sure you attend the morning Scrum sessions so you’re on top of the issues as they’re raised. If you have energized and dynamic staff, it will rub off on your brand.
Anyone who has shopped at Hirsch’s in Milnerton (hirschs.co.za) will tell you the same thing, that’s one company who understands this principle and is reaping the reward with customers who are so loyal they refuse to shop elsewhere.
9 – Don’t Partner With Anyone
When you start becoming successful potential partners start climbing out of the woodwork second to none. Resist the urge to partner or give away equity unless that person is bringing in a lot of capital or a lot of business. Also, the only people you can partner with are ones you would be happy to marry.
Partnerships are like marriages, so don’t sign anything until you know everything about them, and that includes everything.
Many businesses that fail cite poor partnerships as the reason; their partner either ripped them off or didn’t deliver on their end of the bargain. Before inviting anyone in make sure you’ve spoke to a few experts and a few lawyers to get their input.
Try Bertram Richards from Kulea Consulting ([email protected]) for advice on mergers or partnerships.
10 – Get help with Marketing
‘If you build it, they will come’ is a line from a movie that a lot of people think is true, however it is rarely the case in my experience. Getting customers to your website takes a lot of time and effort and expertise, so why don’t you rope in an expert to help drive traffic (customers) to your website or store.
You can’t be expected to be all things to all people, so while you focus on stocking the shelves, they can start filling the sales pipeline with leads, or get customers in through the front door.
Don’t neglect your marketing whatever you do. Just having a store or eCommerce website ain’t enough to guarantee sales.
Get active on social media like blogging, Twitter, Google+, Facebook and Pinterest at a minimum. Plus try your hand at article writing or write a white paper.
You can also chat to me ([email protected]) and we’ll go through who you are targeting and whether you price, product and positioning are aligned for maximum uptake plus we can fulfill on your PR, Email, Social Media, Blogging and general go-to-market strategy for you at rates targeted at entrepreneurs.
Being an entrepreneur takes a lot of hard work, but it is the most exciting thing you can do with your life. I encourage every South African to have an idea that they develop on the side, and that way learn about what it takes to take your idea from paper to kah-pow!