THE beginning of a new year is a good time for potential entrepreneurs to kick-start that long desired business project. Every year thousands of people decide to start their own businesses.
Some succeed but the majority fail. Statistics show that nearly 95% of new ventures that sprout annually fail to survive past the crucial first two years. This, however, should not put off serious entrepreneurs.
Â Getting into business is still the best way of attaining the goal of financial independence and wealth creation. Aspiring millionaires should forget the lottery and abandon their ideas of becoming a celebrity and focus instead on setting up their own business.
Quoting statistics from an international bookmaker, William Hill â€” a leading UK based provider of financial services to entrepreneurs â€” advised recently that entrepreneurs have a one in 200 chance of making over a million United States dollars by starting their own firm.
This compares to a one to 14 million chance of winning a lottery jackpot paying the same amount, and a one in a million chance of winning a television talent contest such as X-Factor or Big Brother.
The chances of the ordinary man or woman in the street making it rich through showbiz or sports are similarly slim.
Even for those with genuine talent, succeeding in show business is potentially much tougher than more traditional business. For example, the odds of scoring a multi-million-dollar-a-year contract in the English Premier League like Benjani are at 400 000:1.
This research confirms that although running your own business might not seem quite so glamorous as show business or sport, hard work and determination in traditional business is much more likely to be rewarded by tangible success.
Improving the odds of business success
While hitting the jackpot in the so-called glamour industries has a lot to do with luck, business success comes from your own determination, preparation, hard work and doing the right things.
Â Planning is where it all starts. A business plan is like a roadmap that will guide you as you embark on the road to business success. It defines you destination and states how you will reach it.
By clearly defining your business and personal goals, you remain focused on the target even when hardships occur, and you can change strategies and tactics in response to changing external conditions.
Many start-up crises can be averted by careful planning before leases are signed and business cards are printed. If you are a first-time entrepreneur who has never coped with problems like low customer response, poor cash flow and flawed financial planning, it is advisable to seek help from outside experts.
Expert advice at start-up and as your business matures can mean the difference between smooth sailing and a sinking ship.
Helpful expert advice can be obtained through self-help materials such as books, seminars and CDs or DVDs.
Never underestimate the power of a good business book, DVD or seminar to inspire, teach and save you from the kinds of missteps that come from inexperience.
Business coaches and consultants offer assistance with a personal touch in helping you polish your initial business plan and offer strategic problem-solving skills moving forward. It is also useful to talk to others who are already in business so as to learn from both their mistakes and their successes.
A mixture of these three types of assistance can not only prevent mistakes at start-up, but also provide valuable ideas and tools for shaping and growing the business.
Essential tips for starting entrepreneurs
lDo what you love. Do not choose a business because you read that it is the next hot niche, or because your friend is in it. Doing something you really love will show through to your customers and will help you stay with it when things get tough. You will know you love something when it just flows when you do it, and you cannot wait to get up in the morning to do it.
lWrite down you business plan. You need a plan even if you are not looking for a loan. You would not invest money in the shares of a company without a prospectus, so why should spend your money and time on a business without a written plan? A plan should be flexible and you should be ready to change it as circumstances change.
lDo not underestimate your start-up costs. In fact, multiply those two or three times. The major reason for early start-up failure is running out of capital. Have sufficient start-up cash before you start.
lTarget as small a market niche as possible. The paradox is that the more you try to appeal to EVERYONE, the less you will appeal to ANYONE.
lDonâ€™t do everything yourself. Itâ€™s so tempting to fall into the self-deception that â€œitâ€™s cheaper for me to do it myselfâ€.Â
Itâ€™s not! If you arenâ€™t good at something, for instance bookkeeping, it will probably take you two to three times longer â€” time you could be spending doing things that are essential for you to be doing personally, like deciding your marketing strategy or improving your production processes.
Your business will get off to a quicker start because you arenâ€™t distracted by time-consuming tasks that drain your energy.
lAssemble your support team. Start with the people who will help you do the things you arenâ€™t good at.
Some examples: bookkeeper, marketing writer, web designer. Then add the people who give you professional business advice: a lawyer, an accountant, a business coach. Finally, include the people who support you personally: your family, friends and colleagues.
Â True, the business environment is difficult right now. But entrepreneurs know that all crises create opportunities. Besides, nothing lasts forever and a friendlier economic environment is probably on its way.
Now is the time for entrepreneurs to seriously starting working on those new projects that add value to our abundant agricultural, human and natural resources and get up and running in 2009.
We are organising a seminar for February designed to assist entrepreneurs in exploring their business ideas so that they can start up on a sound footing. Presenters from various fields of business are expected to come and give useful presentations specifically targeted at new entrepreneurs.Â Further details will be advertised in this newspaper soon.
Phillip Chichoni is a business planning consultant who works with small and medium-sized entrepreneurs. Your views and comments are welcome, please email firstname.lastname@example.org
BY PHILIP CHICHONI