FIVE TIPS FOR YOUNG ENTREPRENEURS
Steven Cohen gives five tips for running a business that not only would help you earn a living, but also enrich your life.
If you’re of school-leaving age, you’re old enough to run your own business.
Sure, you might need a family member to help you with a loan or encouragement and advice, but that doesn’t mean you can’t set up your own business if that’s where your heart lies.
That said, it’s a good idea to get some working experience under your belt when you finish school or university. Your late twenties to early thirties is a great time to pursue a business opportunity of your own, because you’ll have a good mixture of youthful energy and practical experience to offer the market.
Running a small business takes courage and hard work, and it is not for everyone. However, the life of an entrepreneur might be for you if you truthfully answer ‘yes’ to the following questions:
- Am I willing to work long hours to achieve my goals?
- Do I like the idea of being my own boss? Am I able to manage myself and work independently?
- Can I tolerate risk and bounce back from failure?
- Can I think creatively about solving problems people have or enriching their lives, and turn my solutions into profitable products and services?
- What skills and interests of mine could I apply to this end?
Once you decide to become an entrepreneur, you’ll need to think about how you will ensure the success of your business. There are many ways to define success, but unless your business is profitable from its early months, it probably won’t survive.
Here are your five tips.
FIND A MENTOR
When running a small company, you need to come to grips with labour law, tax regulations, supplier negotiations, and many other challenges. From collecting money from people who won’t pay up to dealing with difficult employees, running a business involves many tough decisions and thorny situations that will test your maturity.
If you’re starting out with your first business and have limited experience in running a company, it helps to have someone who has been there and done that to ask for advice. It could be the accountant who has become a friend to your family, a family member or an older colleague who has run a business in the past, or even a customer or supplier with whom you strike up a good rapport.
SURROUND YOURSELF WITH GOOD PEOPLE
It makes sense to fly solo for as a long as you can because hiring people introduces cost and complexity into your business. But as you grow, you might find that you need helping hands if you are to maximise your opportunities.
Be fussy about who you employ. Look for people who not only have skills, experience and contacts that will help you grow your business, but who also have values, personalities and approaches that align with yours.
Trust your instinct – if you feel unable to trust someone or think you won’t get along with them, don’t hire them. And remember that there are certain areas of the business you might need help with, such as taxes or employment contracts, even if you can’t hire someone full-time. Rather than trying to do it all yourself, hire trustworthy consultants to assist.
HAVE A PURPOSE AND SET GOALS
To succeed in a business, you need to have a purpose. Start out by thinking about your skills, interests, and assets, and how you could put them to work to serve the marketplace.
It needs to be a vision of what you can and will do for your customers that no one else is doing very well or at all – a unique solution to a problem your proposed customers have or something that answers an unmet need or desire in the market.
Whether your goal is to create the next Facebook or simply to offer the best garden service in Sandton, you need to have a purpose for your business that goes beyond making money.
Once you have the vision, turn it into a practical set of goals and milestones; from there, create tangible business plans to achieve your goals. It’s all very well to say you’re going to build a new Naspers, but write down the steps that will get you there over the next five or ten years. Without structure and deadlines, you will probably not get where you want to go.
Think about how many customers you’d like to have in six months, a year, five years down the road; about what your expenses and income will be; and what products and services you might offer. Real life might intrude and make a mockery of your plans, in which case you should improvise and adapt.
REMOVE DISTRACTIONS
Time management is a vital skill for any entrepreneur to master if he or she is making the most of life at home and at work. Focus on the things that matter – look at ways of reducing the impact that time-wasters such as unimportant emails or social media have on your time.
Then, set short-term goals for yourself, perhaps drawing up lists of daily or weekly priorities. Once you commit to focusing on high-priority jobs and set out a schedule for doing them, you’ll soon find yourself getting in front of your work.
Another important element of time management is using the right tools and people for the job – it might be worth paying someone to do your typing for you or to buy an accounting package because of the time savings you might achieve.
TAKE CALCULATED RISKS
One of the biggest risks an entrepreneur can take is to take no risks at all. In fact, your youthfulness and ability to conceive game plans bigger companies might consider to be too risky could be one of your biggest competitive advantages. You don’t need to be reckless, but it’s important to recognise that opportunity and risk are often two sides of the same coin.
For example, most small businesses will get to a point where they need to consider borrowing money to increase production or hire staff to service a big new customer. Don’t let fear of failure be the reason that you allow an important business opportunity to slip away. Do your research and try to protect yourself with legal agreements where relevant, but always be mindful of the opportunity costs of deciding to pursue or steer away from a risky venture.
Author: Steven Cohen CA(SA) is Managing Director for Sage One AAMEA