-Temitope Adeyemo
You have finally decided to start a business. You have done your research and concluded on the business idea. You have done your projections and the numbers are looking quite good. You are motivated to kick-start things. You can’t wait to start making a difference in the world. You are getting butterflies in your stomach. The idea of running your own thing gives you some unexplainable ginger. Calm down first. Before you start taking inventories and making sales, there are four critical things you need to consider.
There are many pitfalls and hurdles you will face running that business. These four are like a foundation upon which you can begin to build the walls of your business brick one after the other.
(1) Get a team of advisor: One of the crucial mistakes you will make as an entrepreneur is to run a one-man business. Being the alpha and omega of your business makes you more susceptible to making terrible mistakes. You can avoid some mistakes by getting an advisor team. Having a group of people with different skill sets and level of success for mentorship and strategic business relationships will provide a veritable platform for successful and vivacious operational prowess at the idea, selling and growth stage. I understand that this may increase your operational cost but the benefits inherent in taking this step are immeasurable.
Look for experienced people in your area of specialisation and who understand what it means to run a business. Let them serve as your board members (two or three people for a start). This arrangement may not be formal at the outset (if you cannot pay them yet), but ensure they are people willing to point you in the right direction and tell you as it is. It will give your business some credibility and shield it from it being tagged a one-man business. A one-person enterprise is more prone to failure because you’ll be the one making all the decisions. A team of advisor (or board) will make you more responsible and accountable. And when you know you have people you answer to, you will definitely do things differently.
(2) Fulfil legal requirements: Separate your person from your business. Let your business have a life of its own. Name your business and incorporate it. Doing this will lay a good foundation for branding your business. A lot of businesses in Nigeria are not incorporated and are run as a small business. Another mistake you can make is to see your business as small enterprise. Yes, it is a small business, but you must see it as a corporation; a business that is ready for growth and expansion. By incorporating your business, you have already kick-started a process of moving up the ladder. Your team of advisors will by this have a legal status and stake in your business. Every person will understand their position and act accordingly. Your company will be able to acquire its own asset and have its liabilities separate from that of its owners. Again, speak to both an accountant and a lawyer to know the tax and legal requirements in your business interest. Depending on the business you run, there are various statutory requirements for different businesses. For instance, if you want to start a food packaging business, you would need a NAFDAC registration. So, before you engage in any business enterprise, find out about all the necessary registrations and other needed requirements.
Learn about the tax requirement, local levies, etc. You don’t want to run afoul of the law. Furthermore, open a bank account. This may sound like a cliché but you definitely need a bank account for your business. Moreover, do your research well on banks before you choose which one to bank with. At one point or the other, you would need services other than saving money in the bank. Find out about loans and credit lines, online services, funds transfer¬¬¬¬–local and international and so on. The tiniest edge a bank has over other may be what you need for your business to grow. Carry out a thorough research for the best bank suitable for your business activities.
(3) Determine your financing source: Financing is perhaps the most important aspect of running a business. It is the life of any business venture. You need to identify source(s) of financing for your business. Be enthusiastic isn’t enough to run a business. You need money. The best way to start is with your savings. With your savings, you can navigate the experimental stage of running a business. Understand that nothing ever prepares you for running a business than actually running it. The chances of failing are more than succeeding. So, start with your money. You can also ask family and friends to support you. Never start a business with an interest-paying loan. Start lean. Forget the niceties of a CEO. Reduce your operational cost to the most critical items. Also, understand how much you need to run the business and get it. Ensure you cover your operational cost for at least six months. This includes staff salaries, logistics, etc. Assume that you will not make sales during the period. You will save yourself from getting into some embarrassing situations. Imagine your workers demanding their salaries on social media. This will put your credibility on the line. You credibility as a business person is your greatest asset. If you lose it, you may never get it back. Identify your financing sources and ensure their reliability.
(4) Go digital: This goes without saying; you need an online presence, irrespective of the kind of business you are doing, even if you sell roasted plantain (There is a business in Lekki, Lagos which sells roasted plantain with all the niceties you can think of, with a good online presence). Going digital should not be a side strategy. It should be the main strategy. Tell me any big business in the world today that does not have an online presence. People don’t just buy a product nowadays. They do research online. Your business is accessible to anyone anywhere in the world if you are online. You become part of a global community when you have an online presence, (“we global now” in Charles Okocha’s voice). If you cannot afford a website (it is really cheap, if you can do it yourself), start with a social media presence on Facebook, twitter or Instagram (these are the commonest). You never know who can bump into you page and decide to buy your product.
The above steps are few among other steps you must take before you launch your business. Not to worry, you will learn a lot by doing rather waiting till you learn everything. If you diligently follow the steps above, you are on the right track to building a sustainable and profitable enterprise.