“Just do it!” (Nike)
You and your fantastic business idea can’t wait to chuck up the 9 to 5 job and launch your own new venture. 2020 here we come! But is this the right time to do it?
Of course no one knows for sure whether 2020 will see our economy glide happily into recovery mode or continue bumping along in the mud at the bottom. But one of the great things about starting a new small business is that it doesn’t really matter. Provided, that is, that you plan carefully and remain agile and adaptive to whatever may come our way.
Here are some thoughts on how to get that planning underway…
1. Line up the right professional help
Quite apart from all the many legal, accounting and tax-planning issues you will face, bouncing your ideas off your professional advisers is a no-brainer here. Just do it before you put too much time, effort and money into your new venture.
More on that below…
2. Ask yourself “Am I an entrepreneur?”
Not everyone is suited to the cut and thrust of running a small business. On one side of the coin you can look forward to a good dose of exhilaration and excitement, but on the other you are in for more than your fair share of work-life balance challenges, risk, fear and stress. The personal and financial rewards can be enormous, but the spectres of disruption, decline and failure will haunt you at every turn (if they ever stop haunting you, something’s wrong – nothing is certain, and nothing lasts forever!).
Bring your family in on this from the very start – they will be walking this road with you every step of the way!
3. Quiz yourself online
Spend 10 minutes answering the questions in an online quiz like the Business Development Bank of Canada’s “Entrepreneurial potential self-assessment” on its website – then book appointments with your professional advisers to see if they agree (back to 1 above).
4. Decide on a business structure upfront
This is critical; the tax, financial, legal and practical issues of getting it wrong can be substantial. And whilst you can change from say sole proprietorship to a company/trust structure down the line, the consequences are best avoided. Rather get it right from the outset with professional advice (1 above again).
5. Figure out the financing
Whether you will need a lot of money upfront or not, your business idea is a non-starter without finance. First, figure out how much you will need – crowdfunding site Kickstarter has a useful planning checklist on its “Funding” webpage.
Next think about where that money is coming from. Can you finance the startup yourself; and if you can, should you? Will you ask friends and family or a bank for a loan? Perhaps you can find a rich partner or an angel investor? Crowdfunding may be worth a look – apart from Kickstarter and many others like it, consider local platforms – Google “Crowdfunding in South Africa” for a list, and read Jumpstarter’s “Crowdfunding in South Africa!” here. The State also comes to the party here – read “Where do I get assistance to establish a small business?” on the South African Government Information website for a list.
Last but not least, specific professional advice is once again a no-brainer.
6. Build a strong, dynamic team
Your staff will be the backbone of your business so whether your team will be big or small, in-house or out-sourced, management-heavy or mostly there in a support function, put your heart and soul into choosing wisely. Recruit wherever you can from diverse backgrounds and a range of specialties for a dynamic team that is agile and adaptable, and has the creativity that flows from constant cross-pollination of ideas.
7. Market, market, market!
No matter how brilliant your product or service, it is worth absolutely nothing to you until your target market pays you for it. Which it will only do if it knows what you do and how you benefit them. As obvious as that sounds a lot of startups fail for lack of planning around how to achieve the necessary exposure.
With all the marketing noise bombarding us all these days you have to find a way to be heard – prioritise marketing or fail.
8. For a company get cracking with Biz Portal’s ‘One-Day, One-Stop’ online platform
The CIPC (Commission for Intellectual Property Commission) has just launched its “Biz Portal” online business registration platform. In collaboration with SARS, UIF, the Compensation Fund, B-BBEE Commission, the .za Domain Name Authority, and banks, the platform says it will help you register your new company in just 1 day (it normally takes 40!), plus assist with tax registrations, domain names, bank account, BEE certificate and so on.
Time will tell how effectively this (very welcome!) new initiative will actually work, but remember that by its very nature it cannot give you that essential individualised input we keep mentioning. Take professional advice as above before using this platform!
9. The bottom line: Just do it!
To quote Richard Branson: “Screw it – just do it!”
[This article was originally published in the LawDotNews January 2020 newsletter. To view the full January 2020 newsletter please go to this link.]