Many ambitious men and women aspire to have his/her own business.
Unfortunately, good working people stop dreaming about starting that startup in the middle of their hectic work lives, not so much for the lack of funds; but more for the lack of courage.
Truth to be told, there are many startups failure in the market. The situation becomes even worse after 2008 when the sub-prime crisis hit the US economy. Many experts said that the value of the recent global recession is the sum of all the financial crises 1980, 1997 and 2008 put together.
In spite of these discouraging statistic, do you still aspire to be a businessman? Here are the tips for success.
1. God’s Grace
Need I say more. My life and the business that came to me in the form of an ingredients trading business is an icon of His Provision. Be brave, ask God and take the leap of Faith. If it is in His Will that you succeed, He will win the battle for you.
2. Start Something That You Understand
I ain’t talking about the technical aspect alone. Many technical personnel (e.g engineers, cook, bakers) went into business thinking that their technical know-how alone is sufficient to carry them through in their new business venture. Ever read the book called E-Myth?
A cook, let’s call him Billy spent two decades to sharpen his skills in the art of culinary. He excelled in the field of molecular gastronomy and had won various international awards. He even had experience working in Michelin accredited restaurants in different parts of the world. One day, under the coaxing of his friends, he decided to start his own restaurant. With years of accumulative savings, he figured that he got everything covered. With his name in the culinary world, what could possibly go wrong?
Bursting with enthusiasm, he engaged one of his friend who was also a seasoned chef to partner him in the F&B business. They thought they got everything prepared right from the start. A great location by the tourist belt, a good interior designer to help in the restaurant design, a well-equipped kitchen, ample dining spaces…However, after 6 months of unexpected “roller coaster” ride, these were the results: parted ways with his partner, lost all his savings, drowned in insurmountable debt, and total burnout.
Oiy wait a minute! I thought Bill, being a renowned chef totally understood the business! No?
Not necessary to all your entrepreneur wannabes. The chef, like most of us, understood the food he served, not the restaurant business. It ain’t enough just to cook up a feast. Billy the chef needed a whole team of functional departments to back him up. He had supports when he worked for the many 5 stars hotel. If he was a famous chef, where Billy the sous chef was already a brand, he needed at least a procurement personnel, human resource team, the captain to cover all the nitty-gritty issues that plagued him instead of spending most of his funds on design and appearance. The sad fact was, if Billy had fully understood the business, he would have prepared the support chain for the short term and the middle term.
3. Ditch The Fake Business
There are many salespeople who suffer from a major identity crisis. They ignorantly called themselves entrepreneurs. There are major industries in this world that successfully hoodwink honest men and women into the believing that by slogging to hit the sales quota set by their respective agencies, actually give them the right to be called business owners. The best example…insurance. Let me be frank here. I have no grudge against the insurance industry. I am merely citing an industry as a case study for the benefit of my readers who deserve some information before jumping head first into the field.
Don’t get me wrong. You will still earn a living as an insurance sales agent if you work hard enough. But the fact remains, that the low barrier of entry will make your life very difficult to stand out from the rest. To the big boys sitting comfortably in their penthouse office in Hong Kong or Shanghai, the agents are merely tools to meet their year-end KPIs. Each year, the marketing department will devise ways to recruit new agents into the industry with different kinds of incentive. Those who fall for the rewards are usually school leavers, who don’t know their real worth. Lured to target their own family members for their first sales, then left to give up their commission after failing to reach their minimum sales target on the following year.
These kids think that the insurance companies are sincere in giving them a purpose, a new life, a business that they can call their own. Unbeknownst to them, these big conglomerates are making deals behind their backs with banks and other financial institutions to sell the same sets of policies. “Why?” you may asked. The reason is simple. Banks have wider reach plus lower profit sharing.
By the way, you can’t sell your business to anyone or pass the “business” to your children. An insurance agent does not own the clients that he fights hard to win. The company owns the clients. You can pass your accounts to your son, hoping that your clients will recommend their next of kin to buy the next policy from him. At the end of the day, you are at the mercy of the company.
4. A Good System Should Generate Sales Even Without YOU!
We take a look again at the restaurant owned by Billy the chef. Billy made a fatal mistake from the word Go. When you start a business, you must adopt a helicopter view of the whole business process. The first question you must ask yourself, how are you going to earn money daily when you are not around?
If you run a service-oriented business like the F&B, you must prepare a team to run the show daily. Imagine your restaurant serving 4 meals: breakfast, lunch, dinner, and supper. That means you are successful in serving the full spectrum of your customers needs. However, if all your chefs fall sick on one same day, you have missed a day sales opportunity. And not forgetting the risk of your disappointed customers not returning into your premise again.
The online business differs very much to the brick and mortar in this aspect. Your e-commerce site will not shut down after 8 hours like your restaurant. The internet does not need any holiday unlike you or your workers.
There is no easy way to put this point into the actual perspective. Especially if you are not an expert in the overall business domain of your field. You don’t want your startup’s potential to be limited by the lack of workers, or other resources. You implement sustainability into the system from the day you incorporate the company. Easier said than done though.
5. Look For Good Money
What do you look for when you look for investors? You want investors that can contribute to the value chain of your new business. If you start a logistics company, you might try to find a partner who happens to be in the grocery business or any field that could make use of your fleet.
If you watched Shark Tank, you will see this point being played out many times when the new entrepreneurs deliberated which one of the tycoons to fund them. Some see their innovations sold on tv, and others might envision their products promoted in retail shops.
In other words, if you have a good idea, don’t worry too much about the money. Place more weight on choosing the right synergistic partner to come on board.
6. Never Give Up The Controlling Stake of Your Enterprise
There are a number of funding concepts for a new entrepreneur. Having said this, it is just too easy for the ever trusting newbie to fall into the trap of an unscrupulous venture capitalist.
At the stage of looking for funding, have a small committee of shareholders to share on opinions on potential investors. Get a good lawyer who understands the full mechanics of funding and investment before committing on any offers. Decide early on how much stake you want to remain for yourself and how much to give away for strategic purposes.
7. Do Not Over Delegate Away Your Authority
Yes, you have built a sustainable business and you have put in place a system that could roll out the dough for you even when you are away for holiday. The fact remains that you just can’t be overly complacent. Do not be too trusting in your right-hand man or woman.
A CEO once told me that a company has a team of gatekeepers to keep the assets secure. Once loopholes are found among the gatekeepers, a temptation to abuse the system will arise. Sadly, this once wise CEO, after having worked hard to bring his company to its first IPO, fell into his very own hubris and complacency trap. He left his whole company into the hand of his trusted Executive Director whom he groomed a few decades ago and letting the latter brought the whole empire down in a series of mismanagement and financial fraught.
8. Treat Everybody Fairly, Especially Your Employees
Although you could never expect your employees to be as committed as you in building your own startup, the least you can do is to treat them like how you want to be treated if you are in their shoes.
I have seen in my own eyes on how employers treated their employees as money-making tools, finally succumbing to their own misdeeds. Imagine having your team working hard to build you an empire but in at end of the day, sold off the entity purely for monetary gain. In just 3 years, all the monies that the greedy boss gained from the sale have to be injected back into a group of loss-making businesses which surprisingly was once profitable before the sale.
The message here is, don’t take your business or its eventual success for granted. There is a team of people (including you and your spouse) who has work tirelessly to bring you the fruits that you have longed for. Be Grateful.
God Bless you.