Consider this before starting a business
Last month I received super feedback from the first column. It appears that there is a strong contingent of people who are either already entrepreneurs or those who want to become entrepreneurs. I salute you and offer this quote by Rob Siltanen as encouragement:-
“Here’s to the crazy ones. The misfits. The rebels. The troublemakers. The round pegs in the square holes. The ones who see things differently. They’re not fond of rules. And they have no respect for the status quo. You can quote them, disagree with them, glorify or vilify them. About the only thing you can’t do is ignore them. Because they change things. They push the human race forward. And while some may see them as the crazy ones, we see genius. Because the people who are crazy enough to think they can change the world, are the ones who do.”
I have had quite a few enquiries/suggestions for this article and so I thought I would respond to one from Dominic from Table View- “If you could do a piece on the transition from leaving employment job – to that of self- employment, I think this could help a lot of people.”
Last month I addressed the why of entrepreneurship. Today I would like to look at 6 questions to answer to yourself before launching out. As with everything, you need to apply it to your situation and adjust for your own circumstances.
What is the unmet need?
Will your product add value to people’s life? A recent study called Scientists Monkey Around with the Economy showed that monkeys live by the same basic economic principles people do. Scientists taught one member of a tribe of monkeys how to open a jar of apples. The monkey opened the jar so everyone could share. She got groomed a lot. For monkeys, grooming is like money in the bank. A second monkey was taught how to open the jars, and the grooming was split between the two talented monkeys.
What are the lessons from all this monkey business? To succeed, add value–that is–give people something real that they really want. Doing something unique is better, but it doesn’t have to be completely unique.
How big is this opportunity?
Is the market you are targeting a small or large one? Is it a growing one or declining? There are 9 massive challenges facing South Africa’s economy. Can your product or service help to address one of these?
Who else is trying to meet this need?
One of the reasons that businesses struggle is that the new entrepreneur starts a business in an already over traded industry. In such a case you will have many competitors (smaller part of the pie). If you still want to enter this industry, how can you stand out and be really different?
How will I make money?
While contributing to the common or higher good is beneficial, you should also be clear about where the money will be coming from. Drill down with this one to understand what your breakeven point is and what projected cash flow will be in future. If uncertain/dubious, perhaps you should rethink the business model
Investors always want to understand the entrepreneur and his or her ability to take the business to the next level. Why? Because the model may be great, but does the entrepreneur show the necessary competencies to navigate the inevitable storms they will face in building the business? Weaving your own story and strengths into the profile is smart and builds authenticity and credibility.
Timing is vital. You may have a great product, show developed entrepreneurial strengths and be able to offer serious value to a relatively large market. Yet poor timing may scupper your well laid out plan. As Anna Wintour says “It’s always about timing. If it’s too soon, no one understands. If it’s too late, everyone’s forgotten.”
Zig Ziglar says, “You don’t have to be great to start…bot you have to start to be great”
Here’s to many start-ups!