South Africa’s labour landscape has changed dramatically in the last two decades. Due to various factors influencing this change and the rising unemployment, it has become of paramount importance to empower individuals with sound knowledge and tools to start a small business.
- An elderly person in your sixties, healthy and full of life, finding yourself without an income due to circumstances and you are afraid to use your hard earned pension money to start a business to further your pension income?
- In your middle age years and you can see the writing on the wall regarding the future due to dramatic changes in the labour market that leaves you without any possibilities to further your career?
- A victim of labour legislation that has forced you on the side line due to lay off or early retirement, but not in demand of the labour market due to your age and worst of all, minimal capital at your disposal?
- A young man/women finding yourself in a dead end regarding your career but too scared to even contemplate a change never mind starting your own business?
The one common denominator regarding all of the above is the nagging uncertainty of what to do about the situation.
Where do I get information regarding all my nagging questions?
What do I do with this feeling of helplessness and despair?
The fact of the matter is that there is no easy answer or way out regarding the above. As there are literally thousands in the same situation in South Africa the need to try and address this situation in a practical step by step way, has become paramount.
It is important to make the move into entrepreneurship with your eyes wide open, as starting and running a business is not for everyone. There are risks involved!
If You Just Got Fired, This Entrepreneur Has a Message For You
What you should know. Most successful entrepreneurs follow comparable patterns and share similar basic characteristics. Hundreds of online articles and published books claim to know the secret of success in business, but for the most part, they boil down to the same major points. Starting and running your own business takes planning, effort, determination, and stamina. It also requires a willingness to make sacrifices, especially during the early years.
The next step is to examine your motivation. Provide an honest answer to the following question:
What is my real motivation? When asked why they want to go into business, most people will be quick to say: “to make lots of money!” Fair enough, but this in itself may not be a good enough reason. Building up a business requires long-term commitment and experience has shown that only those who take this step for the right reasons stay the course.
Some “right” reasons for going into business.
- You have a passion for a specific product or service.
- You have a particular talent, skill or interest in this field.
- You have identified a gap in the market that you know you will be able to fill better than existing suppliers can.
Some “wrong” reasons for going into business.
- Greed in the form of unrealistic expectations of becoming wealthy within a short period and/or without the need to work hard.
- Finding it difficult to work with others. To be successful as an entrepreneur, you need to be a people person.
- Not wanting to be accountable to anyone. If your main motivation for branching out on your own is the hope that once you are in charge, you can literally do as you please, watch out.
What kind of business should I start? The answer to this question should flow from an examination of your unique skills, interests and experience on the one hand, and market realities on the other. Do not attempt to start a business in a field in which you have neither interest nor proven ability!
So here are the main items to take into consideration if you’re trying to develop a business platform. These elements constitute will support a smart strategy for any new enterprise:
- Love what you do. Passion is key to keeping a business strategy moving. Half-heartedness in an entrepreneurial endeavour will chip away at your drive to succeed. Perseverance is the one thing that’s guaranteed to move anything over time, whether it’s a person, a job or an entire company. Abraham Lincoln failed at most of his efforts until late in his life, yet he never gave up.
- Take baby steps. Jumping all in is rarely ever successful. There are success stories about people who invested everything once and came out winners after six months or a couple of years, but those are rare. Risk management is an essential factor in any start-up, and balance is vital. You can absorb losses more easily if you take smaller risks in the beginning. Those will provide essential and productive lessons.
- Learn from others. Successful entrepreneurs often worked in their field of choice before striking out on their own. Spending a few years in the industry under an excellent mentor will provide a good launching pad. Learn from your predecessor’s mistakes and brainstorm about how to improve upon their model. Find someone willing to teach and think about starting your business elsewhere when you leave.
Some golden rules to always keep close at hand and apply them.
- Do not operate on untested assumptions. Most of the fears that people have, and particularly entrepreneurs, are based on assumptions that they haven’t tested. And most untested assumptions are simply not true. They live as ghosts and monsters in your head, but they’re not real.
We live in a very interesting time, where it’s actually risky to be safe. Safe doesn’t exist, and it never has, because you are never in charge of all the events that take place around you. Change is the only constant. For centuries we’ve operated on the notion of survival of the fittest. He who is strongest will win. This is also a faulty assumption. Success today isn’t about strength — it’s about the ability to adapt to new circumstances. Over the last ten years more circumstances than ever before have changed, and the rate is just accelerating.
You have to have an open mind; you have to learn to be flexible.
- If you’re in the business of doing business, you’ll soon be out of business. How do you measure business success? Be careful that your strategy isn’t focused on possessions — fancy offices, a big building, or cars as status symbols. If you’re too focused on things, you’ll be too afraid of losing your stuff. Entrepreneurs who are focused on a higher purpose concentrate on improving themselves, their people and doing the best for their clients. They’re far less afraid of sudden changes and turmoil, because possessions aren’t as important, which makes them agile and adaptable — exactly who you want to be in a changing world.
The rise of a new breed of people who are focused on doing what they love, and who aspire to a higher cause, instead of just focusing on the business side of things. It’s tough to compete with people who don’t do business models, but focus on purpose instead.
- Give yourself and the team working under you the freedom to adapt. There are two types of people — those who are flexible, have an open mind, and are willing to adapt to new conditions and environments, and those who are terrified of making mistakes and therefore seldom venture out of the established norm. The same therefore applies to teams working under you. The type of team that forms the foundation of your business is up to you. Are you hiring people with flexible, open minds and giving them the freedom to make mistakes, or do you stifle innovation in your organisation?
Remember that mistakes are often the only way to learn something. If people are really dissatisfied with their own errors and performance, they will internalise the experience far more deeply. There will always be some mistakes. My advice is to create an environment where everyone learns from mistakes — their own and those that others make — and try to make mistakes that you will benefit the most from by encouraging your team to take chances. This doesn’t mean it is okay to make mistakes on purpose, but create a safe environment and deal with mistakes in a way that shares the lessons, and instils the learnings in your business.
- Make a “not to do list”. We’re so busy making ‘to-do’ lists that we forget to make ‘not-to-do’ lists. Remember that you’re in charge of your life, and you can go in any direction you want. Yes, there will be circumstances that influence your life, but ultimately you can change everything. There’s less financial risk than ever before in doing business. You don’t need big offices, buildings, or cars. Everything you need to make an impact is at your disposal. The only things holding us back are our assumptions.
While you are creating your to-do lists and strategies, take some time to write down what you shouldn’t be doing — what you don’t want to do, what you should avoid — the business or person you don’t want to be. Focus on what you love, and build a great life around those principles. Don’t allow yourself to live in fear.
- Leverage the holy trinity of dynamics. I believe there are only three things you need for success: People, information and ideas. With these three things, you can set anything in motion.
An idea in itself is worthless. It’s really nothing else but combined information; creatively connecting unconnected dots. The ability to make ideas materialise in this world however holds value, and for that you need people and information. Information is the bridge between ideas and the people who make them happen. What’s incredible is that we are living in an information society.
There are more people connected than ever before. We’re living in a network age and an information age, which means you can focus on all three, connect the dots, and unleash an unprecedented amount of ideas.
- You do not need a budget to innovate. So many organisations miss this crucial point. Money is naturally scarce, and the dynamics of money are weird. People are afraid to spend it because it’s scarce, and they’re uncertain if what they’re spending it on is a risk or not. As soon as there’s a financial risk, and you don’t know the outcome, you’re hesitant to jump in. And this ends up stalling innovation, because there’s an over-riding belief that you need money to innovate.
But what about applying other resources other than money alone? Always consider what you can do with the resources you already have. This will take financial risk out the equation, which will lead to less fear. Once fear is gone, people step in, open up and contribute. If you get rid of the risk, you enable your team. In many cases, finance is not an enabler, it’s a disabler.
Imagine if you could stop asking for money and setting your price, and instead asked your clients to pay what they believe your services are worth. You’d quickly either make more money, or realise you’re helping the wrong businesses, or not demonstrating your value clearly enough.
Entrepreneurs know this — they’re used to bootstrapping and being creative. The problem is that as we grow, we forget, and start becoming reliant on money to grow. And this stifles us.
So how do you begin to use the resources you have? Start by targeting the one percent of your clients that are able to do 100 or 1 000 fold what they are paying you in terms of money. What can you barter or trade with them? What resources can you offer each other that are actually more valuable than money? What could your clients potentially do for you that would actually save you money? Or what would they love to pay for, that you potentially aren’t offering right now?
Every single organisation has resources that they can deploy without financial loss. Start with 1% and build on it.
- Build your social capital. Social capital builds monetary capital. It’s not the other way around, and yet so often we focus on monetary capital first. Instead, focus on achieving something that will lead to monetary capital. I give away my social capital freely. I share my books and ideas for free. It clears my mind, and I know that I can create ideas faster than you can steal them anyway. That’s how you should view ideas. Giving away social capital gives you access, and then you don’t need money — that’s the secret to success.
People are too careful with their social capital — particularly their ideas. I promise you this — the chances of becoming a millionaire with just one idea are miniscule. If that’s your strategy, it’s not only dangerous, but you’re wasting your time. If you become someone who can share ideas freely, and focus on bringing people, knowledge and ideas together instead, your chances of success have grown exponentially.
Remember, people love to share, and you want to mine into that. Look for zero plus not the sum of zero.
- Understand the dichotomies of knowledge workers. Knowledge work is something new. Traditional business systems are based on hands. You exchange time for money. But today we are working with our heads, and the reality is that you cannot work with your head for eight hours a day, particularly in artificially-constructed work hours. One third of the population work best in the evening, and yet they’re expected to arrive at the office at 8am sharp. Not only are they causing traffic jams, but they’re not working in their optimal conditions either. We need to rethink the model. We need to stop treating computers like modern typewriters. We seem to think that answering hundreds of emails is working. It’s not. We’re all just distracting each other.
Digital skills are nowhere on the strategic agenda of boards. The time and skills of your employees are the most valuable asset you have, and yet we aren’t doing anything to help our employees become life-hackers. Digital skills won’t only help your teams to work smarter and save time, but become real assets, and not just glorified typists. If you focus on digital skills, your ability to find information and ideas faster than anyone else will grow, allowing you to spread those ideas, learn faster than your competitors and entrench strategic skills in your organisation. Take these skills and invest in them heavily. It’s a true differentiator.
- Become a life-hacker. The term ‘life-hacker’ was coined in 2005 by tech journalist Danny O’Brien. He was covering a group of programmers who were very productive, and yet they weren’t stressed. They were satisfied. How did they manage to be productive and stress-free? The secret wasn’t only in what they were doing — but in how they were sharing those secrets and tools.
“I personally use a few hundred tools that allow me to do a lot more in less time, and I’m happy to share the tactics that help me to work smarter. This is why I launched the lifehacking.nl website, but all the contributors on the site share the same philosophy — we freely share our insights to help others. This is a critical element to life-hacking. There is so much information out there, so many ways to access insights and information. Are you using them? Are you learning and using the tools available? There are tools that can save you hundreds of hours a year. Tap into them. We can learn so much from each other; get the best people possible in your posse and in your community.” (Adam Pash and Gina Trapani).
The above in no way claims to be the “alpha and omega” of starting a business as an entrepreneur. What it is, is a serious attempt to give the would-be entrepreneur some insight into the thought process needed to prepare yourself before any final decision is made.