Starting out on your own

BY SIMON EJEMBI

Over the years, many experienced employees have resigned their paid employment to set up their own business only for it to collapse before long. In this article, Simon Ejembi writes about what it takes to succeed in that regard

For many workers, the ultimate goal is to set up their own business. It is a ‘simple’ plan; after years of working in an organisation, after gaining what is perceived as the necessary experience, you set up your own company. As plausible as the plan may be, many people who have tried to execute it failed miserably.

Experts say while the huge number of failed startups has led many to conclude that starting out on your own is an uphill task, the reality is that many of the businesses failed due to avoidable missteps.

According to them, one of such mistakes is the belief that all you need is a great idea.

Co-founder of online retail company, www.jumia.com.ng, Mr. Raphael Afaedor, however, says it takes more than having an idea.

Afaedor, who is also a Managing Director in the company, says in order to succeed, one also needs capital and the ability to overcome the infrastructural challenges in the country.

To succeed, he says you need “the mind-set of overcoming challenges, the capital, and to run (the business) as fast you can.”

Experts explain that the ability to execute the plan, to bring the idea to life, is very important. They stress that skills in networking, negotiating, among others are also important.

To increase your chances of not just achieving your goal of establishing your own business, but to sustain it, make sure you:

Prepare properly

Unlike those who decide to become entrepreneurs after they have lost their jobs or failed to get one, experts say those who are planning to leave a job to set their own company should not rush things.

Rather they advise that they should take all the time needed to carry out their survey and prepare properly. This, they say, is because without a great plan is the foundation of the business; and it is impossible to have one without proper research.

Through your research (i.e feasibility study or market analysis) you will be able to determine whether you need additional preparations. For instance, are there skills you require to run the business that you don’t have? Are you really ready to start the business? Will you be able to put in the required hours? Or do you need to wait for a year to resolve some issues in the family, for instance? So, take your time; do not be like those, who started a business believing that they will improve on their plan in time, only to end up failing as a result.

Develop your networking skills

Patronage is key to the success, but many people pay little attention to their potential customers or ‘partners’, when drawing up a business plan or setting up their business.

Experts say your ability to network will play a huge role in determining whether your business succeeds or fails. The explain that networking is part of the reason why some individuals have been able to successfully run businesses from their homes – via the phone or Internet – without setting up offices; whereas some other people have elaborate offices but very limited clientele.

Consequently, experts say as you go through the process of setting up your own business, keep your target market in mind; talk to people and consider their views. You will be amazed at what that can do for your business in terms of goodwill and publicity.

Determine your capital

Are you willing to put all your savings and retirement benefits into a business? How much can you really spare? If you are taking a loan, can you repay it back even if the business fails? How much are you ‘willing’ to lose? These are all questions experts advise that you consider when starting out on your own. According to them, while optimism is good, it is important that you put the risk you are taking in perspective. This, they explain is because, when you invest everything that you have in the business, there is tendency that you will be desperate for quick returns. This can make you take decisions that are detrimental to your business.

To avoid this, they advise that you start with a realistic capital; stick to a budget and cut costs as much as possible. If it is a business you can run from your phone or via a website, why rent an office?

Know your market

When it comes to the steps you need to take in setting up your business, one of the first things experts mention is importance of research. This is because it not only helps you plan or develop your idea, it also determines many other things such as where to get your needed items from and where to set up your business. According to experts, one of the most important things research can help you achieve is to know your market. Is there a need for your product or service? Who are your competitors? Experts say you must bear in mind that not everybody will patronise you because it is not everyone that needs your product.

Seek professional help

You may want to avoid this because it may cost you, but the cost of doing everything by yourself is even more costly. In starting your own business, you need to talk to lawyers, financial or investment experts, accountants, etc. According to experts this professionals will not only guide or advice you on what needs to be done, they will help you get it done. For instance, in registering your business, and drawing up employee contracts you need lawyers. Similarly, an investment expert or your financial adviser will tell you if your business plan is too risky or overly speculative. You could also get a successful entrepreneur to be your mentor.

Uphold the law

In every sector of the economy, there are regulatory bodies. Consequently, ensure that your business is properly registered and that it operates within the confines of the law.