I’ve repeatedly came across questions such as “I want to start a business, how do I start?” , “I want to start a business, which business can I start?”
At first what came to my mind instantly was “What?!” especially to the second question because an immediate thought would be “you can’t have someone choosing a business to start for you”. However, I took time to observe and do some research on entrepreneurship culture in South Africa and other parts of the world, specifically looking at what drives this high interest in entrepreneurship.
So I’m going to give my advice or rather answers to the abovementioned questions.
Firstly, particularly in South Africa, people get into entrepreneurship in 3 ways and each entry point distinguish them:
1. Unemployment – These are people who got into entrepreneurship (starting their own business) because they’re unemployed. Some are skilled with experience in specific areas and some have never worked before and sometimes they are unskilled. They are usually primarily survivalist business owners(in their early stages), meaning they just want that R100 to buy some food.
So it is understandable for them to ask questions such as ‘what kind of business can I start’ or ‘how do I start’ because usually their entry into entrepreneurship was unplanned.
2. Self – employment– These are people who are skilled and have some experience in a specific area, probably have been in corporate for some years, and decided to venture their own practice , usually in the same area as they were.
So it common for them to ask “how do I start” because entrepreneurship or business ownership and management is not the same as being a practitioner working for a certain company. You can know how to do the work but not know how to brand and market your offering.
3. Problem Solvers – These are people who identify a market gap or problem and see an opportunity to make money. They can be employed somewhere, have multiple businesses or be unemployed.
It is understandable for them to ask “how do I start” because they can identify a market gap or problem but not know how to package it into a business case and distinctive value proposition.
For example; as someone who is a business development strategist and has special expertise in new and emerging markets, you can brainstorm with me on how you can exploit an incoming opportunity, like one of our client that had info about a soon to be opened mine plant and wanted to know how he can plug in. We explored multiple ways he can create business from that opportunity.
Also I think it is imperative that I add the fact that investors are not entrepreneurs, but entrepreneurs can be investors.
When you ask; “I have R5000, what kind of business can I start?” To me that’s an investor question, not really entrepreneurial. Perhaps look for a promising business to invest in…
Regardless of the reason that pushes you into entrepreneurship, I think if you do not know which business to start or how to start, instead of going for what others doing (eg. If more people are starting catering business, it doesn’t mean that’s the most lucrative business to start), do internet research or consult with business advisors (my work involves sitting down with you to brainstorm, explore opportunities and solve business challenges), don’t just jump in blindly, no matter how much you can’t wait to own a business and be your own boss or have income. Yes, entrepreneurship is about taking risks, however take calculated risks.
To answer the question;
how do I start?
I am aware that it is not necessary about ‘just going for it’. You’re not looking for motivation but direction. So, it is important to:
1. Understand and define the problem you’re solving or need/want you’re meeting.
2. How you’re meeting or solving it. (Value you’ll provide)
3. Who your customer is. Who needs that value/solution you’re going to provide?
Then, think about (this is about testing its profitability):
4. Cost of providing that solution, your selling price, demand, profit margins. (My recommendation is to forecast the first year’s sales forecast, month -to- month. The punchline: if you were to open doors today, how long will it take for you to make the first sale and what will be the total value of your sales?
What kind of business can I start?
It is not all about the kind of business, but about the gap in the market, demand and/or problem faced. That’s what informs the type of business.
You don’t just start fitness training business in area X because you have a six pack and you assume people want it too. You don’t impose solutions on people. Study what is in need, what do people lack and would be willing to pay for?
However, if you have multiple ideas, it is critical to seek help from someone who can help you refine and narrow them for you and test their profitability before you execute them.
Listen as I share more in this episode of Kgadi on Strategy podcast titled, you have have a business idea, now what?
Grab this ebook, Decoding Entrepreneurship, that will guide you on how to move from a state of having a business idea to a state of making money from that idea. WhatsApp 081 414 0017 or email firstname.lastname@example.org The ebook is R100.
or Consult here
I hope this helps you get started with your business idea.