I recently attended a seminar where the presenter described South Africa as one of the richest countries when the currency of its riches can be defined as its entrepreneurial spirit. This intrigued me to no end as the reasoning behind this was both interesting and thought-provoking. He went on to say that we have more entrepreneurs per capita than any other country in the world, whether this was based on research or simply a statement for effect I cannot say, but nevertheless it got me thinking.
Everyday in practice I consult with entrepreneurs from all age groups, racial backgrounds and economic status, one thing they all seem to have in common is a very strong urge to start a new business and succeed. Now this in itself will never be an indicator of success but given the statements made, by the seminar presenter mentioned in my opening paragraph, this seems to beg the question whether our entrepreneurial spirit has become so strong in Southern Africa that we tend to undermine the correct procedures and thought processes when starting off eventually ending in disaster.
With this in mind let’s look into what defines a good “take-off strategy” when starting your new business. First of all I firmly believe that calculated risk, especially in the early parts of this process, has its place in your initial thought process. Do your homework, do your research, take in as much as possible with specific reference to the industry you intend to enter. Having a good idea just doesn’t cut it anymore, in fact it only gets you 50% of the way. The remaining 50% comes down to hard work, dedication to your craft and your implementation strategy, in other words how will you take your idea to a declining economical market and make it successful. This opens a can of worms for extensive future debates that I am sure we will still engage on, but for now lets get back to the focus of this post.
Once you have calculated your risk, where do you go, how do you start, who do you trust, who do you partner with. These questions seem to haunt many a startup. The answer, not so easily defined, can be very broad or very specific depending on your needs. In general you need to keep in mind that your business idea is unique to you, nobody else knows the ins and outs of this better than you do, trust in your competence but don’t be blind to your flaws. I believe that failure to plan ahead in essence evolves to a state where you are planning to fail. Determine where your shortcomings are whether they are in the field of marketing, finances or both.
Let’s have a look at the four cornerstones of business:
- human resources
- your specific product and/or service
For the sake of this argument we can assume that you have the latter part covered as the first part of being a successful entrepreneur is determining your craft, in this case either a product or service or both. With that box ticked, lets have a look at the remainder of the cornerstones. It is imperative that at this stage you need be honest with yourself, think of your experience in business, don’t be afraid to admit that you fall short in certain areas and do not be ashamed to ask for help in the areas you fall short in. For example, if you have no idea or experience in the field of marketing do not attempt to do this yourself, as chances are that you will most probably mess it up, get in touch with a reputable firm that can advise and guide you in the right direction or a mentor with extensive experience in the field you fall short in. The same principle applies to finances and human resources the last two being probably the highest risk for any business in our current economical environment. I will be tackling Finances and Human Resources as separate subjects in the weeks to come as they are too extensive to divulge in detail here, keep the principle in mind though as it will save you many sleepless nights.
It is critical to remember that in our current economical climate we have a bunch of role players in every industry competing for a slice of the same pie, with this in mind you need to remember that you get one bite of that slice to make your impact, if you miss out its done, if your first impression isn’t a strong and determined one your prospective clients will move on. Your reputation is everything and how your clients perceive your company and its representatives plays a huge part in this. Finding the balance between your corporate identity and how your business operates seems to be quite the challenge nowadays and this will most probably poke its ugly head out once you get going.
The theme of this post will inevitably lead to one simple concept, service delivery. Loyalty in the market place no longer exists and there seems to be a mood of acquiring “as much bang for my buck” as possible. Clients no longer stay loyal to a business based on past experiences or long extended bonds dating back generations, sure these are factors, but the only driving factor in the decision making process of your clients will be the here and now, how they experience you and your company at the present moment. It is human nature to forget the past if the present leaves you bitterly disappointed, and there will always be someone to take your place, whether or not they can do what you can do better than you can do it. Irrespective of whether you believe this or not you need to always be on top of things, find a management style that fits you, bearing in mind that leading by example tends to motivate clients and staff at the same time.
To bring this all together we can start assembling a basic business model, forgive me for the visual comparison to construction but I feel its very applicable to what I am trying to get across:
- Lay your foundation correctly: Do your homework, do your research, determine your craft and calculate your risk. Strengths, weaknesses, opportunities and threats will always be a good start to any risk calculation method.
- Cement your four cornerstones: Admit your shortcomings, ask for help and advice and most of all do not attempt to wear all the hats of your business. Focus on your idea, your craft and hone your skills. Choose your mentors and pick an advisory team that share your vision.
- Place your first bricks: When you have completed the first two steps you should have a clear idea of how to approach the marketplace and your prospective clients, do this wisely and take your time, make informed decisions, trust your mentors and advisory teams. Remember one bite, that’s it, deliver your service, do it well and the rest will fall in place.
This will undoubtedly never be the only determining factors in the success of your startup, but in due course you will start developing a pretty good idea of the direction you are taking. I have applied this model to many of my own startups and I can, with great certainty, guarantee that it has yet to fail me. When applying these basics you tend to achieve a great platform to eventually take-off and soar. There are many a difficult path you are yet to face at this point, but at least you know that a good foundation can withstand great disaster.
Lastly I leave you with this piece of wisdom by one of my mentors: “We all have to start at the bottom, the decisions you make will determine where you eventually end up. Making wrong decisions or mistakes and learning from them is just as critical to this process as making the correct decisions from the start.”
Good luck and Cheers!