Tips for starting a new business

May 20, 2013 by SIMON EJEMBI

   

Tips for starting a new business
| credits: File copy

Establishing a business can be a daunting task, but experts say it can be achieved with careful planning, SIMON EJEMBI writes

The thought of owning a business is amusing to many people. However, as much as people will ‘love’ to own their own businesses, many admit that they have little or no idea about what it takes to establish them; they don’t know where to start from.

But because the thought of starting out on their own has been so hard to ignore, many people braved the odds and set up businesses only for them to collapse because they failed to consider many vital aspects.

According to experts, starting a business is quite tasking because it requires serious planning. They, however, say the process can be fun and easy for people who take the time out to either consult professionals or carry out some form of research.

Before saying goodbye to life as an employee, you have to be prepared to take certain steps; failure to do so, they explain, may only reduce your chances of achieving your goal. Some of these steps are explained below.

Are you qualified?

As appealing as the idea of being your own boss is, experts are of the view that many people are incapable of running a business or becoming successful entrepreneurs. Unlike paid employment, which may only require expertise in an area and a few traits such as discipline and hard work, being entrepreneur requires much more. In addition to discipline, such qualities as self-confidence and credibility are important. You have to also have excellent communications and human and time management skills, among others. Of course, some of the skills required to run a business can be improved along the way, but experts warn that starting without the requisite skills would be a costly mistake. So, be sure you are qualified.

Be sure about what you want to do

Though experts admit that starting a business can be a very challenging thing for people, especially those who have been in paid employment for a long time, they say remaining in paid employment because of this fear can lead to regret later, if things don’t work out. This is why experts advise people against starting a business because that is the only option open to them. They say once you are sure about why you want to start your business, you will be able to approach it with a great attitude and find it easier to handle challenges and go through the process without relenting.

Come up with a great concept

Before you quit your job to become an entrepreneur, you must first think of a concept, product or service that will generate a steady stream of income. This may sound easy, but for most people, this is actually the hardest part. You should conceive a plan that puts your knowledge, experience and expertise to use in the most profitable way possible. Once you settle on an idea, research the marketplace to see how similar businesses have fared.

It is recommended that you start out with a business that you are passionate and knowledgeable about.

Consider support

Whatever you want to do, you will require help and goodwill. So, when you are thinking about starting a business, it is important that you also consider what those whose help you would require think about your plan. Consult your family and friends and take their views into consideration, knowing that you are not going to do it all by yourself.

Create a business plan

No matter the amount of support, expertise and funds at your disposal, experts warn that without a great business plan, you are unlikely to succeed in setting up a good business.

Your business plan is supposed to be the blueprint or guide to everything you do regarding the business. It contains everything from your goal (mission/vision) to the nature of product or service you want to provide, among other things.

Sort out your capital

According to experts, many entrepreneurs make the mistake of thinking that a successful business is down to the amount of money available for the business. But businesses floated with millions of naira have gone on to fail, while those established with thousands of naira have grown to command billions of naira in assets and profit. Nonetheless, you will require capital to start your business; to produce your product and pay employees, etc.

In sourcing the funds, it is important that you go to the right sources. Financial experts say small businesses and startups are better off depending on friends, and relatives as well as the entrepreneur’s savings for capital. But many people turn to the banks and borrow huge sums at high interest rates, hoping that they would break even in a short while and pay off the loans. But the reality is that because of the interest rates, they find themselves using all their profits to service the loans, with little left to grow the business.

Draw up a budget for the business

When it comes to raising funds or spending money to keep a business running, many people rely on assumptions. According to experts, for a business to utilize ‘scarce’ funds effectively, they are better off operating based on a budget. As such, it is important that you draw up budgets for your business. Do not become one of those who say things like, “With N5m, I will be able to cover all expenses.” Experts say you can come up with a proper budget for your business through research or market surveys and the likes.

Get a strategic office

The nature of the business you want to do and the location of your targeted customer base are some of the things you have to take into consideration in citing your office or workspace. Many people just opt for the available space, but this may not be good enough. Whether you are working from home or renting an office, be sure that your workspace is designed to enable you work efficiently. If you are running an ecommerce business, then you must ensure that your website is designed properly or professionally.

Get as much help as possible

Do not try to do it all by yourself. There are many professionals out there and also resources on the internet that can help you handle the technical aspects of establishing a business. Such things as getting your business incorporated and drawing up legal (proper) employment letters and terms for your workers are very important. So also is paying your tax and operating in line with the best practice in the industry you are setting up a business in. These are some of the areas where you need help.

Be creative, plan for the future

It is important that your business is ahead of the competition and the times. To achieve this, it is important that you predict and react to possible trends in the future. You have to reinvent your business constantly. You have to plan for the growth of the business and the challenges that come with it.  Also, you have to ensure that your business can adapt to changing times and economic challenges.