Your own business – 7 tips before starting

Your own business – 7 tips before starting

Owning your own business often seems the best. However, the grass is not always greener on the other side. It is important not to be blinded by the potential rewards. Do you have what it takes? You need the right skills, determination, financial backing, etc. There are also several serious and potentially fatal risks. The following tips serve as a guideline before starting your own business:

1. Make sure entrepreneurship is for you. Entrepreneurship is not for everyone. If you feel more secure in your comfort zone and willing to take risks, chances are you’re better off where you are – there’s nothing wrong with that. Entrepreneurship needs passion, a certain amount of risk-taking and motivation and dedication to succeed when all seems against you.
2. Andonwithstand the risks. Financial risk, including potential bankruptcy, is a real threat if things go wrong. Less obvious risks include social, career and psychological risks.
3. Build a support structure. Owning your own business can be quite difficult at times. The more support you have, the better your chances of surviving these times. It’s worth the effort to get your family and friends positive about the business.
4. Find the right partners. It is often not advisable to go into business on your own (or even impossible). Good synergy between partners can dramatically increase the potential of a business. Unfortunately, many business partnerships do not work and are often disastrous. Choose your partners very carefully and make sure legal contracts are in place for any potential ‘divorce’ in the future.
5. Prepare diligently. Owning your own business usually means a lot of hard work. This should start with a proper feasibility study and business planning. Is there a big enough gap in the market that your business can fill? How will you do it? How will it be financed?
6. Be realistic. A new business is never all moonlight and roses. It usually takes much longer than expected to reach profitability and needs many more resources (especially financial) than usually planned. Reflect this in your cash flow planning.
7. Get expert advice. When you lack specific skills, it is much cheaper to pay for them in the beginning than later when the business is not working. Where applicable, advice should be sought from auditors, lawyers, bankers, consultants and other experts.

Copyright © 2008 – Wim Venter

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