I am currently employed at a contracting company but have a very lucrative side-business which I am thinking of pursuing full-time. Can you give me some advice on what I need to do as a budding entrepreneur to help my business’ success?
Dear Budding Entrepreneur,
Globally we are seeing a trend where individuals are opting to engage in “side hustles” or choosing to leave their full time jobs to explore the path of entrepreneurship. Locally, this is very much the same and while we are all very excited about what the future holds, there are some very daunting issues like registering a business, deciding what legal structure one should one opt for, preparing business plans in order to open a bank account or which taxes to pay. And this is just the tip of the iceberg.
However, based on pure observation and interactions with small business owners, most times the inclination is to dive head-first into the idea with such vigour and determination that these issues are thought about after trading has begun and/or when the bank makes a request for pertinent documentation.
This often results in a frantic search for an accountant to do a business plan and cashflow projection just to satisfy the bank’s request. These documents often form no real part of the business operations going forward and as such some years later, we find ourselves having to make really hard decisions about our business.
No one wants to fail but as Benjamin Franklin is quoted as saying: “By failing to prepare, you are preparing to fail.”
One of the first steps to proper business planning is to engage a chartered accountant or business professional with whom you can discuss your business idea. Having a professional’s view helps not only with much needed objectivity but it also with triggering the thought processes.
The next step should be properly executed market research, which should ideally include investigating the market you want to enter into, acquiring consumer opinions on your proposed product or service, etc. Using the information gathered from this survey, you are now ready to do your business plan. Having a professional lead this exercise is highly recommended as everything is integrated and it helps if your accountant, especially, is very intimate with your business from the onset. The aim is to have a long-standing relationship with your accountant so that they can help you grow and add value to your business in the long term.
In developing your business plan, using the information from the survey you will be defining where you want to go (vision), what you want to achieve (goals), what approach you will take to achieve these goals (strategy), what measurable steps you plan to take to achieve these goals (objectives), what tactics you plan to use to achieve these goals and which initiatives you should consider (action plan).
Furthermore, within your plan, you need to consider your marketing and communication strategies, your brand and the vision you have for your brand. It is important to ask questions such as: how do you aim to set your business apart from the other players already in the market? And did your target market reveal anything in the survey that can be exploited to create a niche market?
Now it is time to deal with the financial aspect of the plan. This is your projected cash-flow and budget. Ideally, you want to plan for a maximum of three years. Set your projections and budgets to suit the economic environment in a realistic manner.
Finally, you can begin registering the business. Your accountant will be able to assist you with regard to the legal structure: sole trader vs limited liability, the pros and cons and which is best suited for you based on your plans. After registering your business at the Ministry of Legal Affairs, you want to get your business duly registered with the Board of Inland Revenue and once that is completed, you will need to register at the National Insurance Board. Lastly, you want to visit the bank to set up a bank account and at this time, you would have everything you need especially if your accountant accompanies you.
While this is the ideal approach to setting up and starting your business, we all know that things change and plans need to be flexible. Therefore, you may not have started up with the assistance of an accountant or with a business plan but it is never too late to start doing what is best for your business and for yourself.
Far too many of us are running businesses on the “hustle”, with no balance for family and self. We are working “48 hours” in the day and with little or no rest. We are choosing to DIY professional services as a means of cutting costs or operating “lean”. These choices rarely result in optimal benefits as your returns will be based on the investment you have made in your business.
I like to use the analogy of investing money in Unit Trust or a money market fund to that of investing in a business. When deciding which fund to invest in or which bank to put your money in, you do a lot of research, then you decide. You choose the one with the most promising returns and best performing track record. Being risk averse or a risk taker will only be reflective in the type of risk associated with your choice of fund, so why take a different approach with the fund you choose to manage yourself? When you put money into your business, you are the one who determines the return.
To be able to focus on the seamless execution of your plan, you may need to outsource what you are not able to do but that which is critical to your success. Don’t think of it as a cost to the business but as an investment in the business. Sustainable businesses are not built overnight but over time. Do not fail to plan.
“Our goals can only be reached through a vehicle of a plan, in which we must fervently believe, and upon which we must vigorously act. There is no other route to success.” ― Pablo Picasso.
All the best,
AFETT is a not-for-profit organisation formed in 2002 with the goal of bringing together professional women and engaging in networking opportunities, professional training and business ideas. ASK AFETT is a column meant to address issues and concerns of professionals seeking advice to assist in progressing in their careers. Today's response was written by Sheree Welch, managing partner – Voiage Consulting Ltd, licensed chartered accountant (ICATT), and business consultant. Learn more about AFETT at www.afett.com, search for AFETT events on Facebook, follow us @AFETTEXECS on Twitter or contact us at 343-2160. Email us your career-related questions at email@example.com.
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