4 things you need to know when starting a business

Thinking about starting a business?

Have you caught the entrepreneurial spirit and you now want to launch a small business?

This is something at least everyone can do.

You can be your own boss, keep your own schedule and you answer to nobody but yourself.

Starting your business is exciting but scary at the same time. However, while working for yourself can seem ideal most people aren’t prepared for the amount of time, money, patience and research that starting a business entails. The more you know about starting a business, the more you can form an organisation that develops into a lasting source of income and satisfaction.

When starting your business, you’ll spend countless hours with lawyers, accountants and investors trying to figure out your next step. Starting a business is a huge undertaking. It’s not a simple path and often includes details you may never have considered. Bear in mind that some businesses thrive and many fail.

Make sure you’ve covered all your bases before opening your doors. Here are four things you need to know when starting your own small business.

Finance your business

Starting a business requires money upfront. Many people want to start their own business because they don’t have money. This can lead to entrepreneurs burying themselves in debt. Finding finance in any economic climate can be challenging whether you’re looking for start-up funds or capital to expand. Most small businesses start out undercapitalised. It’s always best if you know how much money you’ll be able to invest so that you can plan your budget accordingly.

Find government backed loans, venture capital and research grants to help you get started. Asset finance companies in South Africa is another resource that can help you with the financing of your business. Research all the possible resources that can assist you. Asking family and friends for help is the most common way to finance your startup.

You should have patience

Having the drive and ambition to start a business is great but it’s not enough. As the saying goes, the early bird catches the worm but other times slow and steady wins the race. You should have patience, a successful business doesn’t just happen overnight. You shouldn’t expect to turn a profit immediately. Many people have lost confidence when seeing they have made less money than what they started with.

If takes time and a certain volume of sales to see forward progress. Some days will be better than others. Expect to make mistakes and realise that you can’t make everyone happy. Not everyone will love the product or service being offered. You should learn from your mistakes and use that knowledge to prevent similar events from occurring. Mistakes can be valuable experiences.

Failure is good for success

Similar to making mistakes, is failing. Not everything will go according to plan and many businesses are likely to fail. Ravi Govender, Head of Small Enterprises at Standard Bank, says: “Although statistics vary, on average about fifty percent of all start-up businesses in South Africa fail within two years due to the inability and inexperience of their owners.” He continues, “In order to turn failure into success is by managing your personal finances in tandem with your business finances and you’ll ensure that both you and your business stay financially healthy.” The sweetest victory is the one that’s most difficult to attain. Failure is, therefore, any business’s greatest teacher. And in today’s post-recession economy, some employers are no longer shying away from failure, they embrace it.

Network

You have to understand the commitment required when starting a business. You’ll need to communicate with many entrepreneurs. Chat to both those business owners who’ve succeeded and the ones who have failed. Their experience needs to be recent in order for the networking to be useful. Networking is a valuable way to expand your knowledge, learn from others, attain new clients and spread the word of your business. The most valuable advice to catch is how they have handled the impact that owning their own business has had on their lifestyles, personal relationships, self-esteem and finances. As the saying goes, “it’s not what you know but who you know.” If you want your business to succeed then you need to have a great source of relevant connections that you can rely on when in need. It’ll also give you the opportunity to get advice from like-minded business owners. Regular networking and pushing yourself to talk to people you don’t know will increase your confidence.

Make sure you stay on the right side of the law, set things up properly and kick-off your business with success in mind. Starting and running a business can provide a lot of satisfaction. It needs a vast amount of effort and can at times be expensive and time-consuming.