Have you been mulling leaving your job to start your own business for a while? Let this year be the year you finally take action. Use our 12-month guide to help you make your dream a reality. The start of a new year presents endless possibilities. There is a prevailing air of hope and a can-do attitude in almost everyone you come across. There is a burning desire to do things differently, better and even to take big leaps. One of those leaps is either changing a job or career path, or leaving the illusion of a safety net offered by salaried employment to start your own gig. There is a lot to deal with even as you think of transitioning from an employee into an entrepreneur, so we have come up with a guide to help you on this journey. Saturday Magazine spoke to financial experts and compiled a guide that will help you walk step by step, quarter by quarter towards your goal of becoming your own boss by the end of this year. The guide covers the 12-months of 2015, with quarterly goals to check against your progress. Gracing our guide are Frida Owinga, a business coach and consultant, as well as founder and CEO of PassionProfit Limited, which equips helps people turn their passions into profitable ventures and equips entrepreneurs with skills and tools to manage and grow their businesses, and Maina Gachanjah, a mentor for small businesses. QUARTER 1: January to March First things first Define your ‘Big Why’: Businesses exist in the market for two reasons: to either offer a convenience or to ease a constraint, says Maina. “Which of this does your business satisfy?” Answering this question lays the foundation for the existence of your business. It’s what business coaches call the ‘Big Why’. If you can’t answer the question of the ‘Big Why’, says Frida, then you shouldn’t start the business at all. The ‘Big Why’ will be your compass throughout your journey as an entrepreneur. Speak to experts: Here’s who you need to speak to, and why – Speak to a lawyer about the process of registering your business as a company. “Registering your company tells the world and yourself that you are ready,” says Frida. A company also changes how you perceive your business, she adds. “You are going to run a world-class organisation, not a side-hustle.” Speak to an accountant about putting together simple books of accounts on the start-up capital you require. There are other matters like taxation that come with registering a company. Your accountant will advise you on what all this means and how it affects you. If you are acquiring an existing business, there are matters – like goodwill and how the company is valued – that need the technical eye of your accountant. “Most importantly,” says Maina, “speak to a marketing consultant about carrying out your marketing research.” Market research gathers information about the demographics of your niche, competitors and customers. This information will determine how your business responds to the market. If you don’t have this information, don’t proceed any further. “A marketing consultant needn’t be along the lines of companies like Ipsos Synovate and whatnot,” says Frida. Get a small non-descript company which fits your budget and does an equally good job. Your marketing team will be crucial now and going forward. When you need to package your products, yourself and your business, it is your marketing people you will run to. Keep them close, says Maina. Speak to other business people in your industry. See how things are churning out for them.Once you’ve ironed out the basics with the experts, you can now move forward. Only move when they say you move.Frida emphasises that this exercise (speaking to experts) needs be done and done right, “Start right to grow right.” She adds, “If you have funds to start the business but none for these preparations, then don’t start at all.”Frida recommends that you take time off of work – official leave– to work on the groundwork. Don’t steal time from your employer to handle your personal business, she cautions. Savings and capital: Start saving at least 10 per cent of your salary. The 10 per cent will be split between your start-up capital and your lifestyle support for the six months after you jump ship, a period when you won’t realise a steady income from your sales, says Maina. Strip your expenditure down to the bare essentials from now until when you transition to entrepreneurship. Don’t be tempted to use the security of your payslip to apply for a loan for capital, says Frida. “Get angel investors to start you up – friends, family and any fool willing to invest in your start-up. Not the bank.” Read, read, read: Start to build up your home library with the reading materials you will need throughout this journey. Our sidebar offers a list of books and websites you must read for at least 30minutes to an hour daily, starting now. Q1 checklist – Have you… Defined your ‘Big Why’? Met your team of experts: accountant, lawyer, other businessmen and marketing consultant? Registered your company? Set up your savings? Identified your angel investors, in case you need a capital boost? Started your home library? QUARTER 2: April to June Personal preparation Serve your notice: Give your employer adequate notice. “Offer to train the person who will take over your job when you leave,” says Frida. The relationship you have with your employer and his clients is strategic for you and your small business, so develop it. Introspect: Do you have the personal traits that will make you an entrepreneur, and a successful one at that? You will need them to run the long haul, says Maina and Frida. Develop your humility (your small business will have you eating humble pie day after day). Develop your teachability (your learning curve will be so steep in your first six months of business that you’ll wonder how you didn’t know all of this before). Develop your responsibility (the success of your business depends entirely on you. You have a responsibility to deliver on your brand promise, says Maina. So work at delivering because nothing else will). Develop your creativity (the ability to see the money-making potential of an idea when others can’t). Develop patience and perseverance (research says it takes 18 to 36 months for a business to break even. You need the patience to run your business well into this time, no matter what. There is no getting out of this).Introspection also begs that you reconsider the people you spend a majority of your time with, and the type of conversations you are having with them. If you are not careful, they could kill your desire to be an entrepreneur with their negative talk, says Frida. Consciously make an effort to steer clear of such people. Hang around like-minded business people like yourself. “That’s why networking and business clubs are important for the budding entrepreneur,” says Maina and Frida. If you are married, get the support of your partner. “Let him know that you will continue supporting the home as a wife and mother as you had before. Your duties don’t end because you have become an entrepreneur,” says Frida. Start a fitness regimen: Run or jog for an hour every other day. Or join a gym or aerobics class, or even Zumba, says Maina. Being physically fit means you are mentally fit. And you will be able to put in the long hours demanded of an entrepreneur. Shop around for schools: Local universities offer short courses and diplomas in entrepreneurship and business management. It is imperative that you attend these courses, says Maina and Frida. “Include the tuition fees for these courses in your start-up capital,” says Maina. Remember, just because you have the skill or talent to offer a product from your business doesn’t mean you have the skill to run the business itself. To run your business, you need to learn how to lead and manage people, understand its book-keeping, customer service, communicating to your team and clients. You also need to learn how to package and present yourself, your business and your brand. “Go to class to be taught how to do this,” Frida emphasises. Q2 checklist – Have you… Served your notice? Identified certificate courses on entrepreneurship and small-business management, to attend? Introspected and reconsidered the friends you hang out with? Joined a networking club and other entrepreneurs’ social forums? Started a fitness regimen? Continued reading? Revisited your ‘Big Why’? QUARTER 3: July to September The Transition - Leave your job well: Leave like a lady, says Maina. No grandstanding, no hyperbole. Don’t rub it in your colleagues’ faces. Ensure that you don’t burn any bridges with your employer, says Frida. Run your business: Go work on your business and make yourself some money. “Understand the difference – you are working on your business not for your business. Otherwise you have become self- employed, not an entrepreneur,” explains Frida.Put in place controls that will ensure that the business is run professionally – open a separate account for the business and bank all your earnings. Draw up a contract of service between yourself and your company. Include a salary for yourself and your employees. Money earned from the business belongs to the business, not to you, says Frida. Running your business professionally positions it for growth. You are in business now, so don’t offer your services/products for free, says Fridah. “Business people will argue that they need to work pro bono to build their experience or to get their name out there, but it is self-sabotage to do things for free. If you want to build your experience, pay money and go to school instead. Invest in yourself, too.” Read, read, read: Read to grasp the dynamics of running a business. Know stuff. Reading widely is also useful for small talk during your networking gigs, says Maina. Reading places you in the right state of mind to face the challenges that lay ahead in your journey as an entrepreneur. Q3 checklist – Have you… Exited like a lady? Identified more seminars and workshops covering business skills, to attend? Continued reading the recommended books? Revisited your ‘Big Why’? QUARTER 4: October to December Managing challenges Refine your brand marketing: Remember your marketing consultants from quarter one? Pull them back in to refine the marketing material for your brand, says Maina, “Develop a consistent marketing management model for your business. Your website, your brochures, your business cards, your tag line should all communicate the same message.” Be smart: Be proactive, not reactive. Your money to run the business could run out. Observe how your cash flows in and out of the business so you can foresee a time when there will be a sales drought, then plan for this. Will you need a capital injection? Forego your salary, maybe? Be smart. Maintain a gratitude diary: Every morning, express at least five things you are grateful for, says Frida. On the days you don’t have that energy to write it down, go back and read old entries. Gratitude instantly puts in focus what you have achieved so far. Focusing on achievements – instead of what you haven’t – energises you and maintains a positive outlook to overcome the fear that will find you often. Frida says, “Achieving your ‘Big Why’ takes years. Gratitude is the zest of energy you need to keep going, and to realise that the tiny progress you are making will get you to where you want to be.” Q4 checklist – Have you… Maintained your gratitude diary? Continued to network widely? Marketed your brand? Revisited your ‘Big Why’?
Posted on: Sun, 04 Jan 2015 05:41:20 +0000
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