There are lots of detailed articles, videos, podcasts and even books on how to start businesses. This article seeks to address the peculiar situations a first-time founder/entrepreneur faces. It highlights proven, yet overlooked facts that would guarantee your success as you embark on the journey of starting, running and growing your first business.
This information has been distilled from over two decades in business, financing and advisory activities.
Let us dive right in.
1. Know Thyself
This is the first step on your journey to starting your first business. Its importance cannot be overemphasized. It entails developing a deep sense of self-awareness through personal development and self-improvement.
Jim Rohn describes personal development so well. According to him, it is “the never-ending chance to improve not only yourself but also to attract opportunities and affect others.”
This will avail you the clarity of mind to know what is important and differentiate priorities from distractions. Self-awareness would engender true confidence resulting in you knowing what you stand for. It would solidify your values and enable you to absorb experience from others. Watch out for my coming post on personal development. You can sign up for the article to be sent to you here.
All these would prepare you for the task ahead.
2. Constantly Sharpen your Mind Through Learning and Observation.
This naturally flows from self-awareness. The mind is best shaped and tuned through learning and observation. Thanks to technology, information and knowledge on any topic are readily available and at our fingertips. Read, listen to and watch quality materials. Beware of quacks and their misinformation. Expose your mind to new ideas and trends around and beyond your immediate vicinity. We now live in a borderless world and must adapt to it. An idea thousands of kilometres away can impact your business.
Never miss the opportunity to learn through observation. Learn, Learn and Learn.
This will enable you to easily spot needs, pain points, areas for improvements and problems around you. Most importantly, it would arm you with the arsenal to ideate and execute a solution to the problem. Your ideas would always manifest the substance you have acquired through learning and observation. They would be big but realistic – within your competence and capacity, which you have and are continuously developing.
3. Forget the Hype and Glamour. It Starts in the Trenches.
The media and society at large have created a perception that portrays starting a business as a fast track to riches and fame. Entrepreneurs have assumed celebrity status and budding entrepreneurs and new founders are tempted to approach business with that mindset. It is a mindset that neglects the development of self-awareness, competence, and capacity building through learning and the solid foundation they bring to the table.
If you are in the group with that mindset, I must burst your bubble as it would be a great disservice to you, not to do so.
Starting a business and entrepreneurship as a whole is so demanding that only the resilient and tenacious would succeed. It involves long days, sleepless nights, little to no vacations and sadly would deprive you of time with loved ones if you let it. The journey may be long and can be lonely. To say the least, it is war. A war that requires that you jump into the muddy trenches and lead the charge from the front.
Are you still interested? If you are, Great!
The great news is that like all others, this war mints victors and vanquished. Victors are rewarded with fame and fortune. The vanquished, who are more in number, are left with outcomes dependent on their disposition and mindset. The right mindset would enable the vanquished to learn from the experience and rise to new opportunities thereby living to fight another day.
The whole idea of Nsibidee, through this article and others, is to prepare you to emerge successfully.
- Have a Big Vision. Start Small.
4. Have a Big Vision. Start Small.
Most first time entrepreneurs are cash-constrained at the time they decide to start a business. Exceptions, of course, are those with affluent backgrounds or those who have worked for a while and therefore have accumulated experience, network and funds. It is also worthy of note that these exceptions often have their vantage positions cancelled out by a larger appetite for bigger businesses.
In other words, virtually all founders start from a cash-constrained position relative to their financial standing and choice of business.
Despite the aforementioned, thinking of the vision of your business (whether first or otherwise) strictly within the confines of your current financial standing and competence level is counterproductive. It is a major reason for stagnation, stunted growth and eventual failure of businesses.
In order to better understand our line of thought, we shall need to look at what the word, vision, means to a business. A vision is a very clear mental snapshot of what you desire your business to be in the future, generally over a time frame of five to ten years or even longer. It is always based on your goals and aspirations and is captured in writing by the Vision Statement. This is where we benefit from the multiplier effect of self-awareness and continuous learning and self-improvement. Do you see how it all ties up?
We can now appreciate why we must envision our business or enterprise beyond our current standing. This grand vision provides the much-needed focus and resilience that every business needs.
However, in executing our idea to achieve the vision, we must start with the ‘now’. We must plan the business and choose a structure and model that is in tune with available resources and competence. Lots of examples exist to illustrate this execution approach. Dundu Nation, a fast-food franchise started as a food kiosk. Coscharis and Innoson manufacturing both started as retailers of auto parts before upgrading to being a wholesaler then importers and eventually manufacturers. Dangote group also followed the same route. Google built their first server with used computers stacked together and encased in a lego box. Facebook, now Metaverse, started in a university campus, targeting students, and had growth by spreading to other universities. The rest is history. Same with Amazon.
Dream big but start small. Be obsessed with your vision and it will provide the compass needed to guide you to success.
5. From start to finish, the buck stops with you.
After preparing yourself for the task ahead following the steps earlier mentioned, we dive right into the actual set-up of the company. Like I said earlier in the introduction of this article, there are lots of guides on starting a business. Read as much as you can. I shall be following up with another post that offers a practical guide to setting up your business. Watch out for it or you can sign up here to receive it.
Our interest in this article is to highlight the non-trending, yet critical, issues concerning starting a business, especially for the first time. As you go through the steps of actually setting up your business, you must understand that you are ultimately accountable and responsible for all outcomes. This cannot be delegated or outsourced.
Success rates are higher when the founder adopts a hands-on approach during the setup and operation of the business. An absentee founder (literally and otherwise) is a recipe for failure. Prepare all documents yourself. Where the document requires expertise beyond you like accounting and legal documents, prepare your layman’s draft and have it available as you brief the lawyer, accountant or consultant. Review their work and let the company reflect your vision. This is important because most lawyers, accountants and consultants rely on templates. The buck stops with you, not them.
This is not to say that you ignore their inputs. That would defeat the intent of the consultation. Listen to them, seek clarification where necessary, leverage technology to become more knowledgeable (google the topic) and always guide the outcome to be in sync with your vision and brief.
Where your vision and brief cannot be aligned with laws, regulations and business realities, you best rely on professional advice especially after confirming the incongruity. This is why you should always consult with the best you can find. Technology has made quality consultation more accessible.
6. The Truth About Financing your New Business or Startup in Nigeria, Africa and Emerging Economies at Large
In starting your first business, you must bring something really significant to the table. You can bring any combination or all of these.
- Funds,
- Product and or Services
- Expertise (Brain),
- Network or connections,
- Labour (Brawn).
Amongst all of these, Fund is the most significant and can acquire and provide the rest on its own alone and in good quantity. Product, expertise and network often attain a real significance when they are novel and exclusive. Labour provided alone is of little significance and therefore best bundled with any or all of the others.
Expertise in sales and marketing can prove very valuable in a startup as it will enable the business to quickly generate revenue and become cash-flow positive. Never stop learning to sell and market products and services.
It is common knowledge that new businesses are funded through:
- Personal income and savings.
- Funds as investments from family and friends.
- Soft and probably patient loans from family and friends.
- Angel investors.
- Grants and Loans from development agencies.
- Venture capitalists, investment houses and family offices.
- Commercial loans from banks.
Summarily, you can be guided by this – finance the start of your business more with equity and introduce debt (loans) to finance growth and expansion. Be on the lookout for our article on the best financing strategy for your business.
Always strive to bring money to the table when starting a business, whether alone or with partners.
7. How do I start a business without money?
So, I am desirous of starting a business and I do not have money. Possibly you are bringing other items to the table – items of a significant nature. Well, I must say that you are about to take a knife to a gunfight.
My first advice would be to go earn some money. Get some job and with it will come, some money, with which to start and more experience. Adjust your starting point to be in sync with what you have but keep your eyes on your vision.
Where for some reason you want to move forward, despite a paucity of funds relative to your start off point, do one or more of the following:
- Leverage your inner cycle to get funds from family and friends. Be sure to pay back such money.
- Leverage your network to get partners to join you. Choose your partners carefully as this can make the difference between success and failure.
- Consider licencing part or all of your product or service if it is unique.
- Leverage your character and network to obtain “spontaneous financing”.
Spontaneous financing is achieved by collecting goods or inputs on credit and selling the same goods or the resulting products on a cash and carry basis or shorter account receivable days. Account receivable days is the number of days that an invoice (for sales) will remain outstanding before it’s collected.
In conclusion, we have gone through these seven facts that will make a real difference to your startup and give your new business a fighting chance at success.
Which of these facts resonates with you the most? Feel free to share your thoughts in the comments below.
