(This is a contributed post)
Business, as usual, is no longer business as usual. Your parents and grandparents still remember the days that with very little education, little debt, and loads of elbow grease, you could make it in the world. Once you learned your profession and craft, it would be your meal ticket for the rest of your life. Jumping from one employer to the other was a rare occasion! And a handshake was enough to do business.
Well, those days are gone. Young people who finish their education come into the job market with loads of debt, and find themselves struggling to find employment as the market is saturated with an eligible workforce. Even worse, because of that, the wages have been squeezed, and your people entering the job market find themselves struggling financially. And even if you manage to get a job and make do with the wages you have, you seem to have to learn new things continuously. Having studied and learned your craft seems wholly irrelevant and what you know now might be obsolete 2 years in. And that’s not even mentioning disruptive businesses coming into the market and putting whole companies out of business.
No, the job market seems more cutthroat and more unforgiving than ever. So, how would you deal with that? How can you ensure you have the life you deserve and work hard for? The answer is simple: stop playing the employee game and start your own business. And for most, that sounds like a really ambitious pie-in-the-sky type thing to say or consider. But for some, perhaps in one of those low paid unappreciated entry jobs, that might very well be their salvation.
It’s not that hard to start your own business. First of all, you will have to find a problem people are struggling with, for which you might have the best solution in the market. That could be anything from a product to a service. Especially with services, you can get creative. Did you ever think that dog sitting would have been an industry? Or perhaps that getting people to run errands for you? What about aggregator websites that compare insurance premiums for you? All of these have now been established as thriving industries and given way to multi-million value companies. And you might think that all the best ideas are gone. Wrong, first of all, that kind of thinking will get you nowhere, secondly, you just need to be able to provide a better solution. Whenever you do something and think to yourself: “there must be a better solution” is when you need to pay attention. People will want to pay for something better, something that makes their life easier. Yes, marketing and branding come into play, but it all starts with having a better solution for an actual problem people have.
Once you have your market breaking idea, it’s time to get organised. One of the first things to do is to protect your idea. See if you can get an IP copyright arranged. There are some fees involved, but the value of your idea is only worth something if your own and protect it. You really don’t want to share your idea until you know it’s registered with a patent office as yours and yours only. Getting your IP registered can be a tedious and arduous task, requiring time and patience. You might want to do the more exciting stuff first such as coming up with a brand and logo. It would be advisable however to exercise some patience and wait till you get the go-ahead from receiving your patent.
Once your idea is protected, start building out your proof of concept. Don’t go crazy and start building stock (if you have a physical product) or taken crazy assignments to fill up your diary. The idea is that when you start you work out the kinks, uncover teething issues and in general test your product. This is where you still want to be light on your feet and avoid any sunk costs. Any personal money you sink in needs to go to the betterment of your product or service. At this point, it’s always important to know when it’s time to call it quits. If the feedback from your first few products or assignments is negative, really consider if you don’t need to go back to the drawing table. Entrepreneurship is very much about failure as much as it is about success. See failure as a teachable moment and a way to improve long-term.
As said before, try avoiding sunk costs at these early stages. There is nothing wrong with starting your business out of your bedroom, your parents’ basement or garage. Armed with a website and email address you can take on the world. And if you need a step up of providing a more professional front of house, consider getting a receptionist service.
Once you have worked out the kinks of your product or service, it might be time to expand. This usually comes with needing extra capital to either build up some stock (keep it nimble especially without purchase orders!) or ensuring you have a cash flow to pay recurring business bills. Consider taking out a loan. Keep your own takings to a minimum. You might be able to get a business loan with local government subsidies. Looking at new business grants might also be an option. If that’s not enough, consider raising capital with family and friends. Be careful though, as missing payments will cause problems in the private realm. Treat family loans as any normal business loan and make sure to pay on time.
Once your business is making some form of profit or has built up some form of value (subscribers, data, tech capability), and you need some serious growth capital, it might be time to look for an angel investor or some venture capital. The key here is to bring something of true value to the negotiation table and don’t have silly valuations of your own business.
It might be a new age, but one thing hasn’t changed to business as usual, which is: it has to make a profit.